By Simon Jessop
LONDON (Reuters) – The current low-carbon transition plans of 10 of the largest listed oil and gas companies in Europe and North America are not sufficient to assess the risks involved, the world’s leading investor group said on Wednesday. global initiative for climate action.
Climate Action 100+ said companies include Exxon Mobile (NYSE:), Shell (LON:) and Chevron (NYSE:) have been assessed using the industry-specific Net Zero Standard for Oil & Gas framework by the independent Transition Pathway Initiative (TPI) Center.
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 under three broad themes: disclosure, where companies are rewarded for providing information about their activities; Alignment, which tests their climate ambitions; and Climate Solutions, which tracks their investments in greener businesses.
The purpose of the Net Zero Standard for Oil & Gas (NZS) framework is to allow us to evaluate the extent to which the disclosures and strategies of companies in the sector are aligned with the Paris Climate Agreement.
Overall, companies met just 19% of all NZS metrics. European companies were the best performers, led by TotalEnergies, BP and Eni, while North American companies were weakest across all three themes.
Shell and ConocoPhillips declined to comment on the findings. The other companies did not immediately respond or could not immediately comment on the story.
While several companies aim for net-zero emissions by 2050, the lack of details on their planned use of carbon capture technology made it difficult to say how they would get there, CA100+ said.
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 recognized at the COP28 climate talks in Dubai in November – few companies appear to agree .
Among the subindicators of the disclosure, none of the companies acknowledged the “need for a substantial reduction in production across the industry.” Of the 10, only Repsol and TotalEnergies are targeting long-term oil and gas or their combined production.
None of the companies provided the desired details on planned capital spending plans, the report added.
“The inaugural assessment of the Net Zero Standard for Oil and Gas sends a clear message: while some companies show laudable steps towards a robust climate strategy, the overall industry landscape remains alarmingly unprepared for the transition,” said Jared Sharp (OTC :), Project Manager for Net Zero Standards, TPI Center.
The hope is that the analysis can help guide asset managers’ engagement with company boards as the annual general meeting season accelerates in the coming weeks, Sharp said.