Accusations of greenwashing against major oil companies that claim to be in transition to clean energy are well-founded, according to the most comprehensive study to date.
The research, published in a peer-reviewed scientific journal, examined the records of ExxonMobil, Chevron, Shell and BP, which together are responsible for more than 10% of global carbon emissions since 1965. The researchers analyzed data over the 12 years up to 2020 and concluded the company claims do not align with their actions, which include increasing rather than decreasing exploration.
The study found a sharp rise in mentions of “climate”, “low-carbon” and “transition” in annual reports in recent years, especially for Shell and BP, and increasing pledges of action in strategies.
Numerous previous studies have shown there are already more reserves of oil and gas and more planned production than could be burned while keeping below the internationally agreed temperature target of 1.5C. In May 2021, the International Energy Agency (IEA) said there could be no new fossil fuel developments if the world is to reach net-zero by 2050.
Oil companies are under increasing pressure from investors to align their businesses with climate targets. But their plans have faced skepticism, prompting the researchers to conduct the new research, which they said was objective and comprehensive.
The new study, published in the journal PLOS One, found mentions of climate-related keywords in annual reports rose sharply from 2009 to 2020. For example, BP’s use of “climate change” went from 22 to 326 mentions.
But in terms of strategy and actions, the researchers found ”the companies are pledging a transition to clean energy and setting targets more than they are making concrete actions”.
Chevron and ExxonMobil were ”laggards” compared to Shell and BP, the researchers said, but even the European majors’ actions appeared to contradict their pledges. For example, BP and Shell pledged to reduce investments in fossil fuel extraction projects, but both increased their acreage for new exploration in recent years, the researchers said.
Furthermore, the analysis found Shell, BP, and Chevron increased fossil fuel production volumes over the study period. None of the companies directly releases data on their investments in clean energy, but the information they provided to the Carbon Disclosure Project indicates low average levels ranging from 0.2% by ExxonMobil to 2.3% by BP of annual capital expenditure (capex). Separate analysis by the IEA indicates that investment in clean energy by oil and gas companies was about 1% of capex in 2020.