Oil giants fall short on climate ambitions – report

BP and Shell are some of the better performers according to Carbon Tracker, but their targets are still imperfect

August Graham
Thursday 27 May 2021 00:01 BST
Firth of Forth oil platform operation
Firth of Forth oil platform operation (PA Media)

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The world’s biggest oil companies are still lagging behind where they need to be, despite progress on environmental targets, according to an influential think-tank.

Although 10 of the biggest oil and gas companies have strengthened their climate policies in the last year, most of their net zero targets have “significant shortcomings”, a report claims.

Carbon Tracker said that seven of the top 10 biggest companies do not have goals which cut overall carbon dioxide emissions.

Climate ambitions of companies such as Shell Equinor and Occidental only say they will reduce the emissions intensity of the energy they produce, which could allow them to increase fossil fuel production if they at the same time produce more wind power.

Meanwhile, BP has committed to reducing its carbon production – however, it excludes its big stake in Kremlin-controlled energy giant Rosneft from these calculations.

France’s Total also has exceptions, not including emissions on sales outside Europe, while Italy’s Eni is the only oil company to commit to absolute reductions with no exclusions.

These three companies were the best performers in Carbon Tracker’s report, with Shell, Equinor, Repsol and Occidental following after.

Three US giants, ConocoPhillips, Chevron and ExxonMobil were the worst performers on climate, according to the analysis.

All the companies are also relying on technology such as carbon capture and storage, which has not yet been demonstrated to work at scale.

Without rapid action on climate change, the world risks missing its target set in Paris in 2015 to keep global warming below 1.5C, something that experts warned could cause environmental devastation.

“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,” said Mike Coffin, who wrote the report.

Last week, the International Energy Agency said that there was no justification for new supplies of oil and gas to come onto the market.

Investors are also concerned about the future facing oil and gas companies.

Alongside worries over a potential climate crisis, they also know companies could spend money exploring new oil fields only to be told they are not allowed to extract the oil.

Recently, both Shell and BP have been criticised by a sizeable portion of their shareholders, despite making considerable progress on their promises in the last couple of years.

Total has gained several places in this year’s Carbon Tracker league table compared to the same report last year. Meanwhile, Spain’s Repsol has dropped several places.

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