The London Stock Exchange (LSE) will now list coal, oil and gas companies under a non-renewable energy category. Index provider FTSE Russell has placed companies such as BP and Shell in the category, having previously categorised them as oil and gas producers, grouping them with coal producers that were placed under basic materials/mining.

Wind, solar and biomass energy producers have also been reclassified under renewable energy.

The reclassification is a response to increasing demand for divestment from fossil fuels, particularly in the case of the Norwegian sovereign wealth fund that will use the FTSE ratings, but has met some criticism from the oil and gas industry that point to the widening and diverse operations such companies have and the growing renewable components of their businesses. However, FTSE Russell will move any company from the category if the bulk of its revenue is not from fossil fuel related products.

The LSE has already adopted the system, but the Russell US Index and the FTSE Indexes will use the older classifications until 2020.

Full details here.

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