Mentions of climate change and low-carbon energy have roughly tripled in annual reports from Chevron, ExxonMobil, BP and Shell over the past decade.
But even as these firms issue pledges to cut emissions and invest in renewables, the study concludes that such a transition is simply “not occurring” as all four companies continue to focus primarily on producing fossil fuels.
The study, published in PLOS ONE, comes in the wake of record profits for the fossil fuel industry as the global energy crisis bumps up oil-and-gas prices. In the UK, BP has argued against an additional “windfall tax” in response to the crisis, partly on the basis that it would hamper the firm’s planned low-carbon investments.
However, having analysed how the four companies’ commitments align with their climate action and spending, the authors of the new study question the extent of these investments.
While their oil-and-gas production has remained consistently high, less than 1 per cent of their capital investment went into low-carbon technology between 2010-2018, the study concludes.
An expert who was not involved in the new research tells Carbon Brief that it provides “robust” evidence that fossil fuel companies are “not walking the talk when it comes to addressing climate change”.
Due to the use of their products, Chevron, ExxonMobil, BP and Shell are associated with globally significant shares of greenhouse gas emissions. By one estimate, they are responsible for more than one-tenth of all CO2 that has been emitted since 1965.
State-owned companies based in China and Saudi Arabia are larger, but these four US and European energy majors are the biggest among investor-owned oil-and-gas firms.
Amid growing societal and political pressure these companies have started pledging to cut emissions, even committing to “net-zero” emissions targets – although in some cases only for their operations rather than their products. BP has said it intends to move away from oil to become an “integrated energy company”.
However, previous studies have extensively documented how oil majors have spread misinformation about climate change, spent millions lobbying against climate measures and shifted the blame for global warming onto consumers.
This historical behaviour suggests that the authenticity of the companies’ climate commitments “should be examined critically and exhaustively”, the researchers write in their new study.
Mei Li of Tohoku University, along with co-authors Prof Gregory Trencher of Kyoto University and Prof Jusen Asuka of Tohoku University, set out to investigate the sincerity of the four oil-and-gas majors by analysing language employed in company documents and comparing it to the reality of their real-world activities and investment portfolios.
The first part of their analysis involved counting the number of times 39 key words or phrases, including “net-zero” and “low-carbon”, were mentioned in annual reports up to the most recent ones published in 2021, covering the period 2009-2020.
The frequency was then divided by the total word count in each report, providing a “rough proxy for the degree of awareness and importance placed on these issues”.
Annual reports were chosen because they were seen as the “most official and representative” of documents addressed to stakeholders and shareholders.
As shown in the chart below, the researchers found that the majors showed a “clear increasing trend” over the study period, adding that Chevron has the least noticeable increase and ExxonMobil’s results are hampered by the inconsistent format of its reports.
Prof Robert Brulle, a visiting professor at Brown University Institute for Environment and Society who studies the public image of fossil fuel companies but was not involved in this work, tells Carbon Brief that, while counting keywords is a simple technique for assessing the significance of a topic, “it is easy to understand and has face validity”, and therefore suits the researchers’ aims.
Pledges and actions
The second component of the research involved analysing pledges and actions relating to clean energy and decarbonisation made by each company.
To do this, the researchers identified 25 indicators of progress, ranging from simply acknowledging that burning fossil fuels causes climate change to scaling back oil and gas exploration.
Each indicator was assigned a score, with +1 indicating a pro-climate action activity, -1 indicating something that contradicts such activity, and 0 meaning no evidence of pledges or action in either direction.
The chart below shows each company’s total score over time. It shows that there has been a significant increase in companies pledging to address climate change towards the end of the decade, particularly the European majors, BP and Shell.
However, the study notes that when it comes to translating these pledges into reality, “the volume of concrete actions…is considerably less than pledges”.
This can be seen in the chart below, which shows that while the European majors still lead, the number of tangible actions taken has been relatively low. Often, the authors note that actions have contradicted pledges, giving the example of BP pledging to reduce fossil fuel investment in 2019 while increasing its area for new exploration access by 58,000 km2.
The study concludes that the companies have largely opted for “low-hanging fruit” in their business plans, including simple statements of support for climate science or carbon pricing. Every major has pledged to scale up its gas production.
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