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Oil





OIL FIRMS’ CLIMATE CLAIMS ARE GREENWASHING, STUDY CONCLUDES

Most comprehensive scientific analysis to date finds words are not matched by
actions

Financial analysis found major oil companies’ business models were still
dependent on fossil fuels. Photograph: Rich Pedroncelli/AP
Financial analysis found major oil companies’ business models were still
dependent on fossil fuels. Photograph: Rich Pedroncelli/AP

Damian Carrington Environment editor
@dpcarrington
Wed 16 Feb 2022 19.00 GMT

Last modified on Thu 17 Feb 2022 05.08 GMT

 * 
 * 
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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 analysed
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. But concrete actions were rare and
the researchers said: “Financial analysis reveals a continuing business model
dependence on fossil fuels along with insignificant and opaque spending on clean
energy.”

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 can be no new fossil fuel
developments if the world is to reach net zero by 2050.

New North Sea oil and gas licences ‘incompatible with UK climate goals’
Read more

Oil companies are under increasing pressure from investors to align their
businesses with climate targets. But their plans have faced scepticism,
prompting the researchers to conduct the new research, which they said was
objective and comprehensive.

“Until there is very concrete progress, we have every reason to be very
sceptical about claims to be moving in a green direction,” said Prof Gregory
Trencher, at Kyoto University in Japan, who worked with Mei Li and Jusen Asuka
at Tohoku University.



“If they were moving away from fossil fuels we would expect to see, for example,
declines in exploration activity, fossil fuel production, and sales and profit
from fossil fuels,” he said. “But if anything, we find evidence of the reverse
happening.”

“Recent pledges look very nice and they’re getting a lot of people excited, but
we have to put these in the context of company history of actions,” Trencher
said. “It’s like a very naughty schoolboy telling the teacher ‘I promise to do
all my homework next week’, but the student has never worked hard.”

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 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.

“Until actions and investment behaviour are brought into alignment with
discourse, accusations of greenwashing appear well-founded,” the researchers
said.

A spokesperson for ExxonMobil said: “The move to a lower emission future
requires multiple solutions that can be implemented at scale. We plan to play a
leading role in the energy transition, while retaining investment flexibility
across a portfolio of evolving opportunities, including for example carbon
capture, hydrogen and biofuels, to maximise shareholder returns.”



A Chevron spokesperson said: “We are focused on lowering the carbon intensity in
our operations and seeking to grow lower carbon businesses along with our
traditional business lines. We are planning $10bn in lower carbon investments by
2028.”

Shell’s spokesperson said: “Shell’s target is to become a net zero emissions
energy business by 2050, in step with society. Our short, medium and long term
intensity and absolute targets are consistent with the more ambitious 1.5C goal
of the Paris Agreement. We were also the first energy company to submit its
energy transition strategy to shareholders for a vote, securing strong
endorsement.”

A spokesperson for BP said: “In 2020 BP set out our new net zero ambition, aims
and strategy, and in 2021 completed the largest transformation of the company in
our history to deliver these. Because this paper looks back historically over
the period 2009-2020, we don’t believe it will take these developments and our
progress fully into account.”

Trencher rejected the charge that the analysis was out of date: “We included the
documents that were published during 2021, so the so-called data gap is only
about six months and we don’t find any evidence of any new actions that would
change any of our findings.”

“Unfortunately, the way the energy markets are structured around the world,
fossil fuels still enjoy many [regulatory and tax] advantages and renewables are
still disadvantaged,” he said.

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