Oil and gas companies are way off-track from Paris Agreement goals, finds new combined alignment scorecard
Despite falling short, bp scores highest relative to oil producing peers
Paris Maligned II
Paris Maligned II: Climate alignment assessments reveal oil and gas company transition risk exposure
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The window of time to achieve the goals of the Paris Agreement is rapidly shrinking, and yet oil and gas companies are still failing to take the requisite actions to align their activities with Paris.
Meanwhile, investor demand for assessments of climate alignment is growing: more and more investors with a ‘universal owner’ investment perspective are recognising the risks that climate change poses to their wider portfolios, while others are seeking for their investments to be managed ‘sustainably’.
Investors can also use climate alignment assessments as a proxy for transition risk exposure to low carbon future scenarios.
This report provides investors with climate alignment and transition risk exposures for 25 of the world’s largest listed oil & gas companies.
The note is aimed at portfolio managers, analysts, sustainability & stewardship teams. It provides:
- Our first Combined Alignment Assessment, which identifies the leaders and laggards on Paris alignment, assessed according to Carbon Tracker’s key metrics:
- Investment Options
- Production plans
- Recent project sanctions
- Emissions reduction targets
- Remuneration incentives
- An update of our least-cost analysis of producers’ upstream projects, revealing the capital at risk and duration risk inherent in portfolios.
- Key considerations and areas which investors can influence to improve company performance on Alignment and preparedness for a low-carbon future.
Quotes
Maeve O’Connor, Oil and Gas Analyst and report author, said: “Companies worldwide are publicly stating they are supportive of the goals of the Paris-Agreement, and claim to be part of the solution in accelerating the energy transition. Unfortunately, however, we see that none are currently aligned with the goals of the Paris Agreement, albeit there are clear differences between companies. This report gives evidence for investors and other stakeholders to hold companies to account.”
Mike Coffin, Head of Oil, Gas and Mining Research, said: “Our latest analysis brings together our core metrics to give an overall assessment of corporate climate-alignment within the oil and gas sector. This new scorecard enables investors to assess companies’ actions relative to peers, and to ask tough questions of company leadership on the realities of the energy transition and addressing climate change.