Three of the biggest U.S. oil and gas companies have released new information on their responses to global calls to transition away from fossil fuel energy sources. ExxonMobil and Chevron issued updates of their 2018 climate risk reports, and ConocoPhillips issued its first report.
ExxonMobil and Chevron insist that global demand for fossil fuels – particularly natural gas – will continue to rise, and, as low-cost producers, they are well positioned to weather any market declines or changes. ExxonMobil revised its report to reflect investor calls to use the Task Force on Climate-related Financial Disclosures (TCFD) framework and included new details on governance and the projected impact of electric vehicles on automotive fuel sales. While ExxonMobil outlined its target for methane emissions and energy efficiency measures for its operations, it has not set an overall target for greenhouse gas emissions. Mercy Investment Services and other Climate Action 100+ investors filed a resolution asking ExxonMobil to adopt emissions targets and to acknowledge the need for a more aggressive transition to lower-carbon energy sources; the company has challenged the proposal with the Securities and Exchange Commission.
Chevron’s new report also assumes that the current global emissions pathway to a greater than 2 degrees increase in temperatures will continue, and that demand for fossil fuels will continue to increase through mid-century. However, the company has adopted methane emissions targets and announced new performance measures in its employee bonus incentive plan that are based on emissions reductions from its own operations. Mercy is collaborating with other Climate Action 100+ investors to push the company to adopt additional greenhouse gas emissions targets and improve its reporting.
These reports, including ConocoPhillips’, show oil and gas companies have an increased awareness of investor concerns and are considering the climate implications of their business plans. They also demonstrate the importance of continued investor engagement for strong emissions targets and company plans detailing the transition to low-carbon energy sources.