Oil and gas firms undermining climate targets, finds report

Oil and gas companies have approved US$50 billion of new investment in major projects since 2018, undermining climate change targets set out in the Paris Agreement and threatening shareholder returns.

Think tank Carbon Tracker found that no major oil company is investing in projects that will support goals of keeping global warming ‘well below’ 2˚C and to ‘pursue efforts’ to limit warming to a maximum of 1.5˚C.

Applying the International Energy Agency’s most ambitious 1.6˚C global warming pathway, Carbon Tracker estimated that the world’s largest oil and gas firms – ExxonMobil, Chevron, Shell, BP, Total, Eni, ConocoPhillips and Equinor – spent 30% of their capital expenditure in 2018 on projects inconsistent with a 1.6˚C world.

The report advised oil majors to cut investment in major projects, highlighting 18 worth $50 billion that have recently been sanctioned which will be ‘deep out of the money’ in a rapidly decarbonising world.

“Every oil major is betting heavily against a 1.5˚C world and investing in projects that are contrary to the Paris goals,” said Carbon Tracker senior analyst Andrew Grant.

“Investors should challenge companies’ spending on new fossil fuel production. The best way to both preserve shareholder value in the transition and align with climate change goals will be to focus on low-cost projects that will deliver the highest returns.”