Absolute Impact: Why oil majors' climate ambitions fall short of Paris limits

This report provides a relative ranking of climate goals for a selection of the largest oil and gas producers (7 majors plus Equinor and Repsol) based on CTI's assessment framework which is described in detail. It expands on CTI's three “Hallmarks of Paris Compliance” as pre-requisites for company goals to link to a finite climate budget.

The report finds:

• Interim targets are critical to ensure timely action, and that the emissions pathway followed fits with Paris goals.
• Not all “net zero” targets are equal among recent climate announcements. There are key differences in the metrics used, the scope and extent of emissions covered, and the emissions pathway followed.
• It finds a three-tier approach to emissions targets:
• Eni, Repsol and BP – Scopes 1, 2 and 3; absolute basis to upstream ambitions.
• Shell, Total and Equinor – Scopes 1, 2 and 3; intensity approach to goals.
• Chevron, ConocoPhillips and ExxonMobil – Scope 1 and 2 emissions only.

Eni tops our ranking based on its structure, despite the scale of ambition not reaching net zero. ExxonMobil brings up the rear as its target covers upstream emissions alone, and even then it only covers assets operated by Imperial Oil, a Canadian oil sands company in which it has a majority stake. This fails to acknowledge the impact that reduced demand for fossil fuels will have on its fundamental business. Climate targets in the oil and gas industry need to recognise the finite limits that the energy transition places on current business models and their investment decisions. Companies that continue to assume growth and sanction projects outside climate limits risk creating stranded assets, potentially destroying significant shareholder value.

The report indicates an industry-standard approach to reporting needs to be adopted. Almost every ambition is framed differently, making comparison challenging; CTI therefore encourages, where possible, the development of consistency around the calculation and reporting of climate metrics.