The recent analysis conducted by Climate Action 100+ has highlighted significant shortcomings in the low-carbon transition plans of major oil and gas companies in Europe and North America. According to the Net Zero Standard for Oil & Gas framework, companies like Exxon Mobil, Shell, and Chevron have failed to meet the necessary criteria to adequately assess the risks involved in their current strategies. Despite growing pressure from investors and stakeholders to address climate change, the overall industry landscape remains alarmingly underprepared for the transition.
The assessment conducted by the Transition Pathway Initiative (TPI) Centre examined companies’ performance in areas such as Disclosure, Alignment, and Climate Solutions. Shockingly, the analysis revealed that the companies evaluated only met 19% of all the Net Zero Standard metrics, indicating a severe lack of progress in aligning with the goals set out in the Paris Agreement. While European companies like TotalEnergies, BP, and Eni showed some improvement, North American companies were consistently weaker across all three themes.
One of the major challenges highlighted in the analysis is the lack of detail provided by companies regarding their planned use of carbon capture technology. While many firms have set targets for achieving net-zero emissions by 2050, the absence of concrete plans for reducing fossil fuel production remains a significant concern. According to the International Energy Agency, scaling back fossil fuel production is essential to meeting global climate goals, yet few companies have acknowledged the need for substantial reductions.
The report emphasizes the urgent need for oil and gas companies to strengthen their climate action plans and provide more transparency around their strategies. Only a few companies, such as Repsol and TotalEnergies, have offered guidance on long-term production plans, while the majority have failed to provide adequate detail on greenfield capital expenditure. The lack of comprehensive disclosure and strategic alignment with climate targets indicates a significant gap in preparedness for the industry’s transition.
Jared Sharp, Project Lead for Net Zero Standards at the TPI Centre, expressed concern about the overall industry landscape and the insufficient progress made by companies towards robust climate strategies. The hope is that the findings of this analysis will inform engagement efforts by asset managers with company boards, especially as the season for annual general meetings approaches. It is crucial for stakeholders to hold companies accountable for their climate commitments and push for more ambitious and transparent action plans.
The analysis conducted by Climate Action 100+ highlights the urgent need for stronger climate action plans from oil and gas companies. With the industry still largely underprepared for the transition to a low-carbon economy, it is imperative for companies to reassess their strategies, enhance transparency, and demonstrate a greater commitment to addressing climate change. Stakeholders must continue to advocate for meaningful change and hold companies accountable for their responsibilities in mitigating the impacts of climate change.