BOSTON, MA. – The Ceres Conference, which brings together players from the corporate and environmental communities, has become an annual temperature-taking ritual for those concerned about how companies are responding to issues of climate change and sustainability.

With the Paris global climate pact (COP21) a reality – and with the oil and coal industries facing substantial economic challenges – the May conference this year was infused with an energy and momentum the likes of which few attendees could remember. But how quickly the transition to a clean energy future will really happen remains for many a looming question.

“More than any time in my 35-plus years in the environment movement,” said Ceres President Mindy Lubber, “I am optimistic, downright bullish, that we have turned the corner, and are pointed in the right direction, in tackling the biggest environmental and economic threat mankind has ever faced – global climate change.”

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She pointed to positive steps being taken by more and more corporations as evidence of a new spirit. For more than two decades, Ceres, a Boston-based nonprofit, has focused on facilitating more disclosure and transparency by companies on sustainability and climate change issues.

More recently, the nonprofit has also organized a coalition of investors who are pressuring large fossil fuel companies to acknowledge a growing concern: To avoid catastrophic climate change, much of the carbon-based sources of energy now in the ground – oil, coal and gas – will have to remain there, in the ground and unused.

It’s what’s known as “carbon asset risk,” or the idea that, as Ceres puts it, the “world’s fossil fuel companies hold at least three times more oil, gas, and coal reserves than can realistically be burned.” Preventing climate change on a devastating scale may require that these trillion-dollar pools of carbon are left, in effect, “stranded” in the ground forever.

‘Change might be slow’

While many financiers and managers of large funds spoke at the conference of making real changes to their investment strategies to account for potential carbon asset risks, some companies more directly implicated in this quandary sent ambiguous signals.

Malcolm Fawcett, director of climate change at Houston-based ConocoPhillips, said the company is building carbon asset risk into its business planning, testing its portfolio, and taking account of a possible carbon-constrained future.

But in terms of energy demand for oil and gas, Fawcett pointed to conventional government estimates that project consistent demand for oil and gas through 2040.

“It looks as if that change might be slow,” he said in a panel discussion.

Asked if  ConocoPhillips might diversify its energy portfolio into renewable sources, Fawcett noted that some major energy companies had been “burned” by such attempts: “There is a time to make a change. There is a time for diversification. But I don’t know when that time is.”

Insiders regularly in contact with major fossil fuel companies said many corporations are reluctant to publicly acknowledge the “stranded asset” realities – even if they are planning for such scenarios behind closed boardroom doors. They fear such talk may depress prices of their oil, coal, and gas reserves.

Seismic shifts to fossil fuel markets

Amy Myers Jaffe, an energy expert at the University of California, Davis, said the world’s major oil companies are accepting that the more predictable, and comfortable, market of the past three decades is coming to an end. The drastic decline in the price of oil – it tumbled from more than $100 a barrel in 2014 to just $26 a barrel earlier in 2016 – is caused by structural changes in the global energy markets, she said. A combination of the Paris agreement and the boom in U.S shale production, which has resulted in a somewhat unexpected burst of new supply, has created a new reality.

“Now we have the possibility that as demand peaks,” Myers Jaffe said, “there are going to be some players . . . who are not going to be able to exhaust their reserves.”

She noted an important announcement earlier this year by Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman that his country is preparing for a post-oil future.

Meanwhile, coal companies such as Peabody Energy have faced bankruptcy in an increasingly unfriendly market and a slowdown in demand.

For years, energy industry observers have speculated about so-called “peak oil” – when the world might run out of new sources. But the new crisis narrative concerns “peak oil demand,” as renewables begin to eat away at the huge share of the energy menu still occupied by fossil fuel companies. Myers Jaffe said in an interview that she believes peak oil demand is still likely more than a decade away, post-2030.

New opportunities for renewables

The global rise of renewable energy was also a source of enthusiasm at the conference, despite a recognition that major work remains to be done, and that depressed  fossil fuel prices are making transitions more difficult.

About half of all new power plants globally in 2015 harnessed renewable energy sources, and the cost of solar energy in particular has fallen dramatically, making it competitive with coal in some markets.

Still, the world will need to produce about 40 percent of its energy through zero-carbon-emission sources (renewables and nuclear power) in the coming decades in the quest to stabilize global warming at no more than 3.6 degrees F.

It is difficult for many to imagine how the coming 12 months could be as consequential as the past year: After all, global climate agreements and historic crashes of energy prices come infrequently.

But by the time the next Ceres annual conference comes around, the true meaning of these major events may come into sharper focus.