Davos: Oil giants target deeper carbon emission cuts

The bosses of some of the world’s biggest oil companies have discussed adopting much more ambitious carbon targets at a closed-door meeting in Davos, a sign of how much pressure they’re under from activists and investors to address climate change.

The meeting, part of a World Economic Forum dominated by climate issues, is understood to have included a debate on widening the industry’s target to include reductions in emissions from the fuels they sell, not just the greenhouse gases produced by their own operations.

The talks between the chief executives of companies including Royal Dutch Shell, Chevron, Total, Saudi Aramco, Equinor and BP showed broad agreement on the need to move toward this broader definition, known as Scope 3, sources said. The executives didn’t take any final decisions.

Targeting Scope 3 emissions would be a big shift for an industry that produces the bulk of the world’s planet-warming emissions, one that could eventually require them to sell far less oil and gas.

For the first time, environmental risks occupied the WEF’s top five long-term concerns. Business leaders - from BlackRock CEO Larry Fink to Allianz boss Oliver Baete - used their platform at the event to focus on sustainable investment.

The two highest-profile attendees at the forum - US President Donald Trump and climate activist Greta Thunberg - made headlines as they staked out opposing positions on the issue.

Several companies have already pledged reductions in Scope 1 and 2 greenhouse gases, which come directly from pumping and refining hydrocarbons. Yet, these account for less than 10% of total emissions from the life cycle of oil and gas, so preventing a damaging increase in global temperatures requires action that goes much further.

The executives debated a document produced by the World Economic Forum on "neutralising emissions at the pump," a reference to the gasoline and diesel sold to customers. There’s an urgent need to shift the industry’s target from oil production to emissions from end users, said one person.

Among major energy groups, only Shell, Total and Madrid-based Repsol have publicly announced that they are either targeting or monitoring Scope 3 emissions.

The Spanish company made the boldest move, promising net-zero emissions in 2050 by diverting investment into wind and solar power. Shell has taken more modest steps, pledging to offset the greenhouse gases produced by fuel sold to drivers on their loyalty-card programmes in the UK and the Netherlands.

Other companies, notably US majors ExxonMobil and Chevron have, so far, resisted specific pledges to cut total emissions, with the latter focusing instead on the carbon intensity of the energy it produces. BP CEO Bob Dudley, who retires later this year, has agreed targets for Scope 1 and 2 gases but opposed a Scope 3 target.

-Bloomberg