Fossil fuel companies adopting climate targets but refusing to cut emissions - report

Review by think tank Carbon Tracker detects gap between rhetoric and action among big oil firms

US oil majors Chevron and ExxonMobil were found to have the weakest policies.

US oil majors Chevron and ExxonMobil were found to have the weakest policies.

 

The world’s largest oil and gas companies are adopting more ambitious climate targets but “most are resisting absolute cuts in their emissions”, a report by influential climate think tank Carbon Tracker has found.

The report – which analysed the climate policies of the 10 largest listed fossil fuel companies, from Shell and BP in the UK to Chevron and ExxonMobil in the US -– found that eight had signed up to “net zero” goals.

However, most were relying on carbon capture and carbon mitigation technologies to achieve their aims - technical solutions that “are unproven at scale,” it said.

The report also noted that several companies were keeping the option to increase fossil fuel production.

Findings

The findings come in the wake of a warning last week from the International Energy Agency (IEA) that there would have to be an abrupt halt to new oil, gas and coal supply projects if the world wants to reach net zero emissions by 2050.

Carbon Tracker’s “Absolute Impact 2021” report found that Italian oil major Eni had the strongest climate policy, as the only company to commit to absolute cuts in emissions across all of its activities by 2030, reaching net zero in 2050.

In contrast US oil majors Chevron and ExxonMobil had the weakest policies.

ExxonMobil, which ranked bottom, was committing to just a 15-20 per cent cut in operational emissions by 2025, ignoring carbon released when its products are burned, the report found.

An activist shareholder on Wednesday ousted two ExxonMobil directors, who were viewed as insufficiently attuned to the climate threat. The result is one the biggest activist upsets in recent years and an embarrassment for Exxon. At the same time Royal Dutch Shell has been ordered by investors to slash emissions faster than planned.

Pressure

Oil and gas companies are under strong pressure from investors to align their businesses with the Paris Climate target, amid concerns about the impact of climate change and the risk of being left with stranded assets if they fail to plan for falling demand.

Carbon Tracker senior analyst and the report’s author Mike Coffin said: “Net zero is not enough – it’s the pathway that matters.”

“To align with the Paris Agreement, companies must commit to absolute reductions in carbon emissions from their oil and gas products, with strong interim targets and a credible implementation plan,” he said.

In its report, Carbon Tracker notes that investors can use companies’ emissions goals to understand not just how closely aligned they are with the Paris target but also to assess the pace at which they plan to adapt their businesses to the energy transition, and the level of risk they face as a result.