Top oil and gas companies have made “almost no progress” in reaching the climate goals agreed as part of the 2015 Paris climate summit, environmental disclosure non-profit CDP said on Thursday.
The CDP’s Oil and Gas Benchmark report, published with the World Benchmarking Alliance (WBA), assessed 100 oil and gas companies. The assessment was based on low-carbon transition and social and just transition indicators.
While none of the companies perform well on all indicators, Finland-based Neste is ranked first, followed by French company Engie, oil giant TotalEnergies, Spain’s Naturgy Energy and Italy’s Eni. In May this year, TotalEnergies announced its plan to keep its scope 3 emissions below 400 million tonnes. However, the company scored 19.4 out of 60 on CDP’s low-carbon transition indicator, and 9.4 out of 20 on just transition.
According to the report, the operating emissions from the oil and gas sector added up to 5.1 gigatonnes (Gt) of CO₂ in 2022. None of the companies assessed by CDP can cut their emissions “at a rate sufficient to align with a 1.5°C pathway over the next five years”, it said.
The report observes that most companies fail to disclose their capital investment in low-carbon technologies. Currently Neste is the only one with investments sufficient to meet the climate goals. Further, despite seven major oil companies disclosing a profit of $380bn in 2022, investments in low-carbon transition fall short significantly.
It is difficult to compare the climate plans of oil companies, as they set varying targets and each adopts a different approach to include greenhouse gas emissions from the combustion of their fuels, also called scope 3 emissions. Companies more consistently acknowledge their scope 1 and 2 emissions, referring to the emissions directly released from a company’s operations and purchases.
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To reduce the scope 1 and 2 emissions by 50%, companies need to invest $600bn by 2030 into low-carbon technologies. Given the current statistics, not only is the target unreachable, but the companies have also derailed from their stated commitments, says the report. Of the 100, only 29 companies have disclosed targets to reduce methane emissions by 2030.
The 81 companies that engage in extraction activities are predicted to increase their oil production by 9%, peaking in 2028. The report, however, suggests that the “sector’s only route to transition is phasing out fossil fuels”.
“In the run up to COP28 in Dubai, all eyes are on the oil and gas industry, but these companies are not planning for a low-carbon future and are failing to take responsibility in the immediate and long term,” said Vicky Sins, the decarbonisation and energy transformation lead at WBA, in a press statement.
On the matter of social indicators, the research suggests progress made by companies to improve human rights due diligence. The companies have resources to proactively respond to issues with 85% of them undertaking risk assessments; 56% of the companies now have human rights policies; and 12% demonstrate human rights due diligence.