Big oil investors call for more aggressive climate targets

Investors with combined assets of $1.4tn have asked the world’s biggest oil companies for swifter action to cut greenhouse gas emissions.

Their call comes in a year of record profits for big oil as energy prices surged with the world economy reopening from Covid lockdowns while supplies were limited. The companies boosted shareholder payouts in response even as many investors backed away from stronger climate advocacy.

Shareholder activist group Follow This filed resolutions with Shell, BP, Exxon Mobil and Chevron, asking them to align their 2030 emissions targets with the Paris climate agreement, it said in a statement. It was joined by investors including Edmond de Rothschild Asset Management, Degroof Petercam Asset Management and Achmea Asset Management. While they each manage billions of dollars of assets, they hold less than 0.1 per cent in the four oil companies, according to data compiled by Bloomberg.

The resolutions are focused on limiting the majors’ Scope 3 emissions, which include CO2 when customers burn their products. Focusing on these, the sector’s biggest contributor to global warming, would ensure the companies have “no wiggle room for smokescreens” in their target to achieve net-zero emissions by 2050, said Mark van Baal founder of Follow This.

“Despite net-zero by 2050 targets, none of these four oil majors are even close to Paris-aligned emissions reductions plans for 2030,” he said.

While BP and Shell have goals to reach net-zero emissions, including Scope 3, by 2050, Follow This wants the companies to set stricter short-term targets as well.

It wants Chevron to expand its current carbon-intensity target, which Follow This says is currently insufficient to limit global temperatures to below 2C. The group is also calling on Exxon, the only one of the four firms without any form of Scope 3 target, to set goals that align it with the Paris climate agreement.