Only two companies among the 10 biggest oil and gas producers globally have disclosures that allow investors to see and track how their carbon emissions will decline over time.
Shell and Total have targets that are in line with the emissions pledges made by governments in 2015 as part of the Paris climate agreement, BP Plc, ConocoPhillips and Eni SpA do have targets, but they are for emissions generated by the production process.
The report notes that BP Plc, ConocoPhillips and Eni SpA’s “targets only reduce the companies’ carbon emissions intensity by a small amount as they are focused only on their operational emissions.”
The report accuses Chevron, EOG Resources, ExxonMobil, Occidental and Reliance of having no quantified targets. Reliance Petroleum Ltd. doesn’t disclose operational emissions at all.
Climate change risks and carbon emissions have taken center stage in the business world today, and disclosure of the risks and a company’s carbon emissions plans are being looked at more closely by investors who want to know if their money is going to be safe.
Disclosures are usually focused on four key elements: corporate governance, strategy, risk management, and climate-related metrics and targets, or as is the case with oil producers, the level of emissions per unit of energy produced. This is relevant today because we are already seeing and experiencing the impacts of climate change.
Professor Simon Dietz, who leads the TPI’s research at the London School of Economics’ Grantham Institute, said the signs were encouraging that two oil companies are engaging in assessing climate risks.
“However, there is a long way to go. None of the 10 largest global oil & gas firms currently set a path that would align them with limiting global warming to 2C or below before 2050. To reduce the carbon footprint of the sector these companies need to set more stretching low carbon targets.”
Adam Matthews, Co-Chair of the TPI and director of ethics and engagement at Church of England Pensions Board, said investors regarded ambitious emission reduction targets as “essential.” He adds, “Targets that cover the whole of the oil and gas industry’s value chain are needed to provide a transparent basis for asset owners to engage with oil and gas companies on their strategies to transition.”