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article imageOnly two major oil companies disclose their carbon emission plans

By Karen Graham     Nov 8, 2018 in Business
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.
Royal Dutch Shell Plc and Total SA are the only Big Oil companies that have set long-term goals to reduce their carbon intensity - the level of emissions per unit of energy produced.
This is the conclusion of a new study from the investor-backed Transition Pathway Initiative (TPI), which assessed the carbon performance and goals of the world's 10 largest listed oil and gas companies.
The Transition Pathway Initiative (TPI) is a global initiative led by asset owners and supported by asset managers. Established in January 2017, TPI investors now collectively represent over UK£7/US$9.3 trillion of assets under management
The Shell Pernis facility  based in the port of Rotterdam  can process more than 400 000 barrels of ...
The Shell Pernis facility, based in the port of Rotterdam, can process more than 400,000 barrels of petroleum products a day
“TPI research raises very important questions about how investors such as ourselves view oil & gas companies,” said Alvaro Ruiz-Navajas, portfolio manager at BNP Paribas Asset Management. He added that it “ultimately affects our overall allocation” as the fund's manager determines whether it is successfully managing climate risks.
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.
A picture taken on January 23  2018 shows the logo of Total at the company's headquarters in La...
A picture taken on January 23, 2018 shows the logo of Total at the company's headquarters in La Defense business district in Paris
Why is company disclosure of carbon performance important?
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.
BP secretly negotiated to pay Mexico $25.5 million over the 2010 Deepwater Horizon oil spill -- a fr...
BP secretly negotiated to pay Mexico $25.5 million over the 2010 Deepwater Horizon oil spill -- a fraction what it paid in the United States, according to the watchdog group PODER
"The most significant finding is the emerging status of companies' future ambitions," he said. "It is encouraging to see two major oil and gas companies, Shell and Total, setting out long-term ambitions to reduce carbon emissions intensity in a way that is compatible with the government pledges made at the Paris climate agreement."
"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."
More about Big oil, Carbon emissions, Disclosure, Investors, Shell
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