How well are they doing?

The Transition Pathway Initiative (TPI) is a global initiative to assess how far companies are prepared for the transition to a low-carbon economy. 

It has assessed the management quality of 13 of the 15 companies in our sample, as well as the risks/opportunities relating to the low-carbon transition. That analysis covers a wide range of questions, from whether the company acknowledges climate change as a significant issue for the business to whether remuneration for senior executives incorporates climate change performance.

Overall, bp, Eni, Equinor and Total top the survey, able to answer “Yes” to all the questions posed, while Lukoil, Saudi Aramco and PetroChina bring up the rear. But the TPI analysis provides a nuanced picture. Of the 13 companies considered, just nine report on Scope 3 emissions and only five ensure consistency between their own climate change policy and the positions taken by the trade associations of which they are members.

Ten of the 15 have announced zero emissions targets by 2050. However, most of the targets set by the non-European companies focus primarily on cutting emissions from their own operations and decreasing their carbon intensity.

Overall, the European O&G majors are generally more ambitious thanks to a combination of comprehensive energy policies outlined by their own governments, fewer natural endowments of oil and natural gas, and greater concern by European publics about the impact of climate change. But in terms of stretch strategies, no major fossil fuel energy company has aligned its emissions pathway with limiting the global average temperature increase to 2 degrees C. Eni, Royal Dutch Shell and Total come close to reaching that target, but in aggregate the groups’ current pledges leave the world on target for a 3.2C rise.

While five majors are on track to align with the emissions pledges made as part of the Paris Agreement, all fall short in limiting the rise in average global temperature to 2°C

Carbon emissions intensity for selected oil and gas majors (2019, gGO2e/MJ)
Targeted carbon emissions intensity for selected oil and gas majors (gGO2e / MJ)

Current pledges would leave the world on course for a 3.2°C temperature rise. No majors are currently on track to align with a 2°C climate pathway by 2050.