New research for Climate Action 100+ shows that 10 of the world’s biggest oil and gas companies are “alarmingly underprepared” for the climate transition.
Exxon, Shell, Chevron, Total, ConocoPhillips, BP, Occidental, Eni, Repsol and Suncor were assessed against the shareholder engagement initiative’s Net Zero Standard, which is intended to help investors judge whether corporate strategies are aligned with the goals of the Paris Agreement and “consistent with companies’ aim to reduce transition risk and preserve long-term shareholder value”.
Working with the Transition Pathway Initiative (TPI), CA100+ has adopted a different Net Zero Standard for each key sector, which it said will help to inform investors’ engagement priorities and enable them to better assess financial risk.
The oil and gas version looks at companies’ production plans, work on carbon capture and storage, methane targets and disclosure levels, among other things. It was published earlier this year following a two-year collaborative process led by the Institutional Investors Group on Climate Change.
Overall, the 10 companies met just 19% of the sector-specific metrics outlined in the Net Zero Standard.
Jared Sharp, TPI’s lead for the Net Zero Standards, said that “while certain companies showcase commendable strides towards robust climate strategy, the overall industry landscape remains alarmingly underprepared for the transition”.
European oil majors performed much better on the assessment than those in North America and elsewhere.
TotalEnergies was the best performer, scoring positively against more than half of the metrics, while Suncor scored on none of them.
“Given that a minimum score of around 80% indicates a robust transition plan, our results indicate that the sector has much progress to make,” said TPI in its conclusion.
Some responsible investors have given up on the oil and gas sector recently because of the slow progress companies are making on their climate pledges. After a two-year engagement programme, PFZW completed the sale of its holdings in more than 300 oil and gas companies earlier this year.
The asset management arm of Danske Bank has just announced a new policy which could see it slash its investments in the fossil fuel space from around 1,900 to nearer 170, over coming years.
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