This post is a part of a series on #Climate2019
It’s holiday season; a time for tea, hot chocolate, and staying home under the blankets. And as you watch your Hallmark movies/listen to Christmas carols/scroll through social media, you’ll likely be inundated with ads from fossil fuel companies and industry groups, each claiming to be part of a clean, green, new energy future.
ExxonMobil wants you to know it’s still investing in biofuels (still waiting for that scale up!), Chevron can’t wait to share that it installed electric vehicle charging stations at five (just five) gas stations in California, and BP really, really wants to help you lower your carbon footprint. The American Petroleum Institute (API), the oil and gas industry group behind the rollback of the Environmental Protection Agency’s (EPA) oversight of methane emissions, is pushing natural gas like it’s sliced bread and in no way responsible for the majority of methane emissions (it is). Our research, however, has proven these talking points to be nothing more than window dressing, and we’ll be watching for more of it in 2020.
But is this climate action, or just greenwashing?
It’s really just greenwashing–these companies are deliberately misleading consumers about how environmentally friendly they are. In the ever-present challenge to parse what oil and gas companies say on climate from what they do on climate, we’ve found that the major oil and gas companies are still failing to act on climate change. In fact, they’re still overwhelmingly pouring investments into pumping out fossil fuels.
ExxonMobil’s investments into low-emission research and development since 2000 ($9 billion)–a number it loves to include in every climate or sustainability report–amount to less than 2% of the money the company invested in capital and exploration ($469 billion) over the same time period.
BP, which committed $200 million in 2018 to Lightsource, a large-scale solar company, dwarfed that investment with a full $25 billion on capital and exploration in the same year. This is a lot of money to put towards keeping the status quo of fossil fuel extraction, compared with very little being put towards the low-carbon transition.
There’s also the recent effort to strip the EPA of its right to oversee methane emissions, despite several investigations showing that oil and gas companies are venting and flaring–directly releasing methane or burning it and releasing carbon dioxide–more than ever. Even though some companies have publicly opposed the rollback, the industry as a whole, through API–-which counts those opposing companies as members and leaders–-is still pushing forward and doing the dirty work.
ConocoPhillips decided to stay silent on the issue, effectively letting its leadership role in API speak for the company. While API has claimed to have methane emissions under control through voluntary efforts, a peer-reviewed study found that the industry has been underestimating methane emissions by at least 60%.
Investors, and everyone else, are getting impatient
It’s no accident that oil and gas companies are pouring money into a full-on charm offensive. It’s been a rough year for the industry. They’re facing growing activist and legal pressure from communities, state Attorneys General, one industry, and the Philippines Human Rights Commission. The Climate Risk Disclosure Act passed through the House Financial Services Committee and will likely have a floor vote in the new year.
BP’s attempt to push the narrative of personal responsibility backfired hard, as the public increasingly embraces corporate climate accountability. UCS and ten other organizations called for companies to meet new standards for corporate leadership on climate. And 200 investors, with a combined $6.5 trillion in assets under management, urged companies to ensure their corporate and trade association lobbying is consistent with their support for climate action. So, of course, fossil fuel companies are emptying their 2019 coffers with a barrage of ads and messages aimed at making you think they’ve really changed their ways this time.
What we’re watching in the 2020 shareholder season
My colleagues Kathy Mulvey and Peter Frumhoff joined with Myles Allen of the University of Oxford to publish a new article in the Bulletin of the Atomic Scientists outlining recommendations to investors for holding fossil fuel companies accountable to the science of meeting the Paris Agreement’s global temperature goals.
Building on the Oxford Martin Principles, which provide a scientific framework for engagement between climate-conscious investors and companies across the global economy, the authors argue that climate-conscious investors should insist that fossil fuel companies commit to achieving net zero absolute carbon dioxide emissions by midcentury—and conduct all activities in ways that are verifiably consistent with this commitment. Put simply, investors must expect more, question more, and tolerate less from fossil fuel companies—and tell them to swiftly get on board with climate action, or get out of the way.
As illustrated above, company greenwashing techniques have become more sophisticated (and prevalent) in the last few years, requiring investors, media, policy-makers, and the public to wade through financial documents to really find the crux of what the companies are doing versus what they’re advertising. As ExxonMobil, Chevron, BP, Shell, and others start to release financial data starting in early 2020, UCS will be watching out for increases in capital and exploration spending, better disclosure into low-carbon R&D, and trade association membership. We’ll also be reading through climate risk reports with a fine-tooth comb, again, to determine how accurate and robust the reports really are.
We look forward to momentarily escaping the spreadsheets, financial disclosures, and annual reports to bring you our findings in the new year. Happy Holidays!
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