Simon Jessop
LONDON (Reuters) – The current plans for the transition to a low-carbon economy by Europe and North America’s 10 biggest oil and gas companies are not good enough to assess the risks involved, the world’s leading climate change investor group said on Wednesday.
Climate Action 100+ said companies including Exxon Mobil (NYSE:), Shell (LON:) and Chevron (NYSE:) were assessed by the independent Transition Pathway Initiative (TPI) using the industry’s Net Zero Standard for oil and gas.
Other companies included in the analysis were TotalEnergies (EPA:), ConocoPhillips (NYSE:), BP (NYSE:), Occidental Petroleum (NYSE:), Eni, Repsol (OTC:) and Suncor Energy (NYSE:).
Each was assessed using indicators and sub-indicators on three broad topics: Disclosure, where companies are rewarded for providing information about their activities; Alignment that tests their climate ambitions; and Climate Solutions, which tracks their investments in greener activities.
The Net Zero Standard for Oil and Gas (NZS) aims to assess the extent to which the disclosures and strategies of companies in the sector are aligned with the Paris Climate Agreement.
Overall, companies met only 19% of all New Zealand targets. European companies outperformed, led by TotalEnergies, BP and Eni, while North American companies underperformed in all three areas.
Shell and ConocoPhillips declined to comment on the findings. The remaining companies did not immediately respond or were unable to immediately comment on the report.
While several companies are aiming for net-zero emissions by 2050, the lack of details about their planned use of carbon capture technology means it’s hard to say how they’ll get there, CA100+ reports.
On the issue of fossil fuel production, which the International Energy Agency says will need to be reined in to meet global climate goals – a move acknowledged at the COP28 climate talks in Dubai in November – few firms appeared to agree.
Among the disclosure sub-indicators, none of the companies acknowledged “the need for significant industry-wide production reductions.” Of the 10, only Repsol and TotalEnergies focused on long-term production of oil, gas or their joint production.
The report added that neither company provided the desired details on their planned capital investment plans for new projects.
“The first assessment of the Net Zero standard for oil and gas sends a clear signal: while some companies are making commendable progress toward a robust climate strategy, the overall industry landscape remains alarmingly underprepared for the transition,” said Jared Sharp (OTC), Project Head of Standards Net Zero, TPI Center.
Sharp said it was hoped the analysis could help asset managers engage with company boards as the AGM season picks up steam in the coming weeks.