According to the most extensive study yet, accusations of greenwashing against oil companies that claim to be transitioning to clean energy are well-founded.
The research was published in a peer-reviewed scientific publication. It looked at the records of ExxonMobil Chevron Shell, BP and Shell, who together account for more that 10% of global carbon emissions since 1965. The researchers looked at data for 12 years, from 1965 to 2020. They concluded that company claims don’t align with their actions. These include increasing rather then decreasing exploration.
The study revealed a sharp increase in mentions of climate, low carbon and transition in annual reports over the past few years, particularly for Shell and BP. There was also an increase in pledges of action in strategic plans. However, concrete actions were not common. The researchers stated that financial analysis revealed a continued dependence on fossil fuels and insignificant and opaque spending on renewable energy.
Numerous studies in the past have shown that there is more oil and gas than needed and more production planned. This allows for a lower temperature target of 1.5C. The International Energy Agency (IEA), in May 2021, stated that there cannot be any new fossil fuel development if the world wants to reach net zero by 2050.
Investors are putting pressure on oil companies to align their businesses with climate goals. Their plans have been met with skepticism. The researchers conducted new research that they claimed was objective and comprehensive.
We have every reason not to believe that there has been any concrete progress until then, said Prof Gregory Trencher from Kyoto University, Japan, who was a collaborator with Mei Li, and Jusen Auka at Tohoku University.
He stated that if they were moving away fossil fuels, one would expect to see a decline in exploration activity, fossilfuel production, sales, and profit from fossilfuels. However, evidence suggests the reverse.
Trencher stated that recent pledges are very attractive and get a lot of people excited. However, we must put them in the context of company history. It’s like a schoolboy promising his teacher that he will do all his homework next week, but he has never worked hard.
The new study Published in the journal PLOS OneAccording to, mentions of climate-related keywords increased sharply in annual reports between 2009 and 2020. For example, BP’s mentions of climate change went up from 22 to 326.
However, the research found that companies are more committed to a transition towards clean energy and setting goals than they are taking concrete actions.
The researchers found that Chevron and ExxonMobil were slower than BP and Shell, but even European majors actions seemed to contradict their promises. The researchers found that despite BP and Shell promising to reduce fossil fuel extraction project investments, both have increased their acreage of new exploration in recent times.
The analysis also revealed that BP, Shell, and Chevron had increased their fossil fuel production over the study period. Although none of the companies released data directly on their investments in clean energies, information they provided to Carbon Disclosure Project indicated low average levels of capital expenditure (capex) ranging from 0.2% to 2.3% for ExxonMobil and 0.2% to BP. Separate analysis by IEA suggests that Oil and gas companies have made investments in clean energy. About 1%Capex in 2020
Researchers said that greenwashing accusations are well-founded until actions and investment behaviour can be aligned with discourse.
ExxonMobil spokesmen stated that to move towards a low-emission future, multiple solutions must be found that can be scaled. To maximize shareholder returns, we plan to play a major role in the energy transition while maintaining investment flexibility across a portfolio that includes carbon capture, hydrogen, and biofuels.
Chevron spokeswoman said that they are focused on lowering carbon intensity and looking to grow lower-carbon businesses alongside our traditional business lines. We plan to invest $10bn in lower-carbon investments by 2028.
Shells spokesperson stated that Shells’ goal is to be a net zero emission energy business by 2050. This is in line with society. Our short, medium, and long-term intensity and absolute targets are consistent in line with the more ambitious 1.5C goal set out by the Paris Agreement. We were also the first company to submit an energy transition strategy to shareholders, securing strong support.
A spokesperson for BP stated that BP had in 2020 set its new net zero ambitions, aims, and strategy. In 2021, BP completed the largest company transformation in our history to achieve these goals. This paper is historical and covers the period 2009-2020. We don’t believe it will fully reflect these developments and our progress.
Trencher refuted the claim that the analysis was outdated. We included documents published in 2021 so the data gap is only six months. We also didn’t find any evidence that any new actions would alter our findings.
Despite the fact that the energy markets around the world are structured in a way that fossil fuels enjoy many benefits, it is still a problem. [regulatory and tax]He said that both renewables and advantages are still being disadvantaged.
