A slow transition to a low-carbon future and failure to take urgent action on climate risks stranding more than a trillion dollars in oil and gas projects, according to a new study out from financial think tank Carbon Tracker Initiative.

The group’s fifth annual analysis of the risk of investing in oil and gas reveals the world’s largest energy firms continue to invest in major projects for fossil fuel exploration inconsistent with the goals of the Paris Agreement and declining demand. Rapid declines in production long-term could deliver serious shocks to company valuations and elevate insolvency risk, according to the author of the report.

“[Oil majors] are continuing to sanction projects that just do not fit in a low carbon world. We find that ultimately the delta between those two sets of projects amounted to over a trillion dollars of [capital expenditure] over the next decade,” said Mike Coffin, head of oil, gas, and mining at Carbon Tracker. “We see this as a staggering amount of continued investment that ultimately goes well beyond climate limits, and potentially risk a lot of value for investors as these assets become stranded.”

The report compares the number of new projects in a low-carbon scenario envisioned by the International Energy Agency (IEA) with the current pace of fossil fuel investments. Coffin said oil majors risk warming global temperatures to 2.7 degrees Celsius by maintaining "business as usual," well above the 1.5 degrees Celsius limit laid out in the Paris Climate Accords. Under the latter scenario, half of the world’s 40 largest listed oil and gas companies would see production decline by at least 50% within the next decade.

Coffin said the damage is expected to be worse for major shale oil companies.

ConocoPhillips (COP), the oil major most exposed to shale, faces a 69% production decline, according to calculations by Carbon Tracker, well above projected losses for Chevron (CVX) at 52% and ExxonMobil (XOM) at 33%. While all three companies have touted climate risk frameworks in line with the global target of reaching “net-zero” emissions by mid-century, Coffin said the transition plans remain inconsistent.

“If you look at a company like ConocoPhillips, it has a net-zero scenario but it only covers operational emissions,” he said. “Fifteen percent of the emissions result from extraction and use of a barrel of oil. The 85% of emissions that are created when using a car, is not included within those targets.”

Grim projections laid out in the report point to the urgent need for climate action, to address both environmental and financial risks. In a report published earlier this year, the IEA warned exploration and development of new oil and gas fields, and building of coal-fired power stations needed to be halted immediately to keep rising temperatures within the 1.5-degree Celsius limit. But Coffin warns investors that oil majors have yet to wake up to the “seismic implications” of the IEA’s findings.