Investors Define ESG Goals for Oil Majors

Copyright © 2021 Energy Intelligence Group

What do investors want from Big Oil in the energy transition? While there is no “one size fits all” strategy, investors are establishing critical guidelines that apply to Western majors. At the core, companies must show they are transforming themselves to become genuine participants in the transition, not just winding down oil and gas operations in response to environmental, social and governance (ESG) pressures that have gone mainstream. Investor demands start with deeper cuts to greenhouse gas emissions this decade, not putting off this work until later — even though industry net-zero targets are generally set for 2050. Kim Fustier, director of oil and gas research at HSBC, told last week’s Energy Intelligence Forum that besides stepping up the urgency of cuts, firms must increasingly focus on Scope 3 emissions — those from end-use of oil company products — and improve disclosure of decarbonization activities. Becoming compliant with the goals of the Paris climate accord is a must, but at the 2ºC rate, "not necessarily" the 1.5ºC rate, she said. Mark van Baal, founder of the Follow This investor group, says most oil companies are not currently Paris aligned because their emissions are set to keep rising to 2030, while the accord demands a 40% reduction in global emissions this decade. However, Fustier said there is "a preference for a more balanced transition strategy where clean energies grow alongside a, more-or-less, stable hydrocarbons business in the short to medium term.”

Opec-plus kept its powder dry and stuck with its agreed output relaxation schedule in the face of the new Omicron demand threat.
Thu, Dec 2, 2021
The US major's capital spending will rise by more than 20% next year, but remains at the low end of its medium-term plans.
Thu, Dec 2, 2021
Even as the US downstream undergoes a dramatic rationalization, TC Energy is betting the Gulf Coast is still a growth market for oil sands crude.
Wed, Dec 1, 2021