Financial institutions still widely support oil & gas majors like Total, Shell, BP & Co – even though these companies are fueling the climate crisis. Oil Change International published a report with 30 partner NGOs around the world, showing that none of the climate plans announced by oil and gas majors is compatible with the Paris Agreement’s 1.5°C target. This report evaluates the companies’ climate plans using ten essential criteria to stay under that target and highlights the gross deficiencies of their “carbon neutrality” strategies.
Increasingly, oil and gas companies claim to be part of the solution to the climate crisis, with new climate-related commitments adopted in the past months by Shell, BP and Total. Stakeholders, including the financial sector, have rated oil companies’ plans against each other. The briefing “Big Oil Reality Check” is the first to focus squarely on the only thing that matters: the level of ambition required for a 1.5ºC-aligned phase-out of oil and gas production.
Considering that the 1.5°C target demands a drastic reduction of fossil fuels on a global level starting no later than 2020, this analysis sets forth ten essential criteria that guarantee the true climatic integrity of the oil and gas majors’ commitments, such as:
- Putting an end to oil and gas exploration,
- Planning a significant reduction of fossil fuel production by 2030,
- Adopting an explicit end date to fossil fuel extraction.
Meeting these ten criteria is necessary to stay below the 1.5°C target, but it is not sufficient. Yet, not a single oil company respects this set of criteria and/or has released a climate pledge or sustainability plan that meets the bare minimum criteria for alignment with the Paris Agreement.
Yes, some majors might perform better than others and comparing their differences might entertain their shareholders. However, all still plan some new oil and gas projects and remain far from implementing the set of criteria considered by over 60 climate and rights groups as necessary to align with a 1.5°C target. Reality check shows that there are no “good” oil and gas majors; some are merely less bad.
BP has been lauded for its recent announcements, taking a critical step in the right direction by being the first oil company to commit to reducing oil and gas production by 2030. However, when held up against the ten criteria laid out in Oil Change International’s analysis, BP’s plan joins the rest of the industry in not rising to the challenge of 1.5ºC alignment. BP’s plans omit the company’s stake in Russian oil giant Rosneft, meaning its announced production cuts could be less than 30% by 2030 when science proves global carbon dioxide pollution must be halved in that time frame. 1.5ºC alignment means admitting that gas is a high-carbon fuel and not a transition fuel, being honest about and eliminating the full equity share of hydrocarbon production, and not lobbying against positive change.
Financial institutions cannot hide behind perceived and symbolic action on the part of some oil and gas giants, such as BP’s. Joining the net Net Zero Asset Owner Alliance or Climate Action 100+ sends a nice message, but if financial institutions want to make climate action a reality, they must either push the oil and gas majors to deeply transform their business models and stop all new fossil projects or exclude them from all financial service.
Pledging to contribute to the Paris Agreement climate goals while voting against climate solutions should be called out for what it is. In opposing climate-related resolutions at Total’s last annual general meeting, AXA, BlackRock, and Amundi showed their blatant hypocrisy and complicity in driving the world towards climate chaos.