Just one in 10 of world's largest energy firms have net-zero targets, report finds
Just 10% of the world's largest 132 coal, electricity and oil and gas companies have set time-based commitments to reduce their greenhouse gas emissions to net-zero, with just three companies also pledging to reduce indirect emissions as well.
With energy accounting for almost three-quarters of global emissions, the report has found that businesses within the sector are failing to align with the Paris Agreement by delivering net-zero emissions by 2050 at the latest.
The report was jointly published by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science, Oxford Martin School at the University of Oxford, and the Transition Pathway Initiative.
Professor Simon Dietz, Professor of Environmental Policy at the Grantham Research Institute, said: “Climate science tells us that net carbon dioxide emissions must fall to zero to stabilise global temperatures, and that limiting the temperature increase to 1.5 degrees requires global carbon dioxide emissions to reach net-zero around 2050.
“Although new corporate net-zero commitments are being made all the time, our analysis shows that we are starting from a very low base.”
The report examined the public disclosures of 20 coal companies, 62 electricity companies, and 50 oil and gas companies. It found that coal firms BHP Billington, Exxaro Resources, and South32, electricity companies CEZ, EDF, Endesa, Enel, E.ON, Iberdrola, National Grid, Ørsted, and XCEL Energy and oil and gas giant Eni had all set dates to reach net-zero emissions. However, the vast majority of companies across the sector have disclosed little information on decarbonisation plans aligned to climate science.
In total, nine of the companies have set a 2050 deadline to achieve net-zero, while four set a date of 2025 or 2030. National Grid and Ørsted have set targets for 2025 and Eni and Exxaro Resources have set goals for 2030.
BHPBilliton, Exxaro Resources and XCEL Energy are the only companies that have set net-zero targets for their indirect emissions (Scope 2 and 3), which include coal or gas extracted by the company and used by other firms.
Professor Cameron Hepburn, Director of the Smith School of Enterprise and the Environment, at the University of Oxford, said: “Four years on from the signing of the Paris Agreement, our findings show that most of the world’s largest energy companies have yet to develop plans compliant with one of its key goals: to eliminate net emissions of carbon dioxide over the next three decades.
“This exposes investors to significant financial risk as implementation of the Paris Agreement leads to polluting assets becoming stranded.”
In September, green groups criticised the UK's offshore oil and gas industry's blueprint to contribute to net-zero emissions by 2035, claiming that the accompanying evidence fails to "leave fossil fuels in the ground".
The UK’s offshore oil and gas industry (OGUK) published its Roadmap to 2035: A Blueprint for net-zero, listing the five key areas that industry, government and regulators must collaborate on to enable the sector to contribute to the UK and Scotland’s net-zero targets.
More recently, BP's chief executive Bob Dudley and group chief economist Spencer Dale called for regional carbon prices that don't just tax the producers, to enable the oil and gas giant to join the global transition to net-zero emissions.