CB BureauIn October last year, a damning report on the top 20 polluting firms in the world was released. As per an analysis by Richard Heede at the US-based Climate Accountability Institute, 20 fossil fuel companies are responsible for more than one-third of all greenhouse gas (GHG) emissions. This essentially means that despite global pacts like the Paris Agreement, efforts by the private sector to reduce their carbon emissions, and the numerous, everyday ecofriendly acts by individuals, the planet is still doomed thanks to the relentless plundering of natural resources by these corporate behemoths.
The total emissions from 1965 to 2018 was 1,354 billion tonnes of carbon dioxide and energy-related methane (GtCO2e), with the top 20 polluters producing carbon fuels that emitted 35 per cent of the global total (480 GtCO2e). The press release can be read here.
Big oil and its big consequences
The full list can be viewed in this Guardian report. In order of decreasing billion tonnes of carbon dioxide equivalent from 1965 to 2017, the list reads as:
- Saudi Aramco
- Chevron
- Gazprom
- ExxonMobil
- National Iranian Oil Co
- BP
- Royal Dutch Shell
- Coal India
- Pemex
- Petróleos de Venezuela
- PetroChina
- Peabody Energy
- ConocoPhillips
- Abu Dhabi National Oil Co
- Kuwait Petroleum Corp
- Iraq National Oil Co
- Total SA
- Sonatrach
- BHP Billiton
- Petrobras
India’s presence is confirmed through Coal India Limited. According to Heede, 1965 was chosen as the base year for this research as by that time the environmental impact of fossil fuels was known within the industry and among US politicians.
Unsurprisingly, all of them are oil and gas giants and are valued at several hundreds of billion dollars each. Chevron, Exxon, BP and Shell, all investor-owned, have been emitting more than 10 per cent of the world’s carbon emissions since 1965. State-owned companies account for 12 of the top 20 companies and are together responsible for 20 per cent of total emissions in the same period.
The global polluters list used the company reports of annual production of oil, natural gas and coal and then calculated how much carbon and methane is emitted to the atmosphere throughout the supply chain. As much as 90 per cent of these emissions was from the use of their products (such as petrol, jet fuel, natural gas and thermal coal), with the remaining coming from extracting, refining and delivering the finished fuels.
The objective of the research was to hold these companies accountable for carbon emissions, instead of the excessive focus on individual responsibility. With the threat of an impending, irreversible climate catastrophe looming closer every year (many scientists contend that we may already be well past that point of no return), it is essential that these fossil fuel giants drastically wind down their polluting activities.
At CB, we decided to take a closer look at the green and environment-friendly goals and claims of the top 4 companies from this list, plus Coal India. This may reveal the kind of doublespeak, PR-style statements and hypocrisies that many large corporations frequently indulge in to avoid closer scrutiny of their actual operations.
Saudi Aramco
Saudi Aramco is a state-owned petroleum and natural gas company that is by some accounts the most profitable company in the world. It has both the world’s second largest proven crude oil reserves and second largest daily oil production. Its IPO is likely to hit a valuation of at least $1.5 trillion (that’s not a typo).
On its website, PR news releases include a JV to ‘increase the efficiency of technology used in upstream, downstream and engineering services.’ Aside from that, news updates on business sustainability are few and far between, while that for climate barely exist. Banal platitudes about ‘reducing impact’ and ‘alternative-energy capabilities’ are plastered in the environmental performance section. The climate section touts a 2017 study wherein Saudi Arabian crude oils were found to have the lowest carbon intensity among crude oil grades supplied from over 100 oil fields in 20 countries.
The company is investing around $600 million a year into research and development in projects such as efficient car engines and vehicles equipped with devices for capturing part of the carbon emissions produced. Much of its climate efforts are around creating technology, such as carbon capture, to lower emissions. Data isn’t provided though and so it is not possible to assess the actual impact of these projects.
As part of the Oil & Gas Climate Initiative (OGCI), $1 billion will be invested in the development of low-emissions technologies over the next 10 years. It is unclear how much of it will be contributed by Aramco. With no specific goals and targets, Aramco’s climate change efforts seem be an afterthought and given far less priority than its IPO.
Chevron
An American energy corporation, Chevron is ranked 28th on the Fortune Global list of the top 500 corporations worldwide in 2019. It has its footprint across all possible fields of oil, gas and geothermal energy. According to the company, its values are to provide energy responsibly while protecting the environment and working to strengthen communities. Its four environmental principles are: include the environment in decision making, reduce environmental footprint, operate responsibly, and steward its sites.
Last year, the company launched a $100 million Future Energy Fund, a venture capital fund that invests in ‘breakthrough technologies’ such as an electric-vehicle charging network (ChargePoint), battery storage technology (Natron Energy), and direct capture of carbon dioxide from the air. It is also a member of the OGCI and has committed to contributing $100 million to it. Compared to the size of its investments in fossil fuel exploration and production, these numbers are extremely small.
In terms of tying monetary benefits to climate change efforts, this year the company added a new metric to its corporate scorecard that links GHG emissions reduction to employee bonus compensation. Chevron’s target is to achieve a 20″25 per cent reduction in methane emissions intensity and a 25″30 percent reduction in flaring intensity by 2023.
While this is certainly better than Aramco (which doesn’t have any such provision), the targets seem to be designed to show that something is being done and hence elide real accountability, rather than implementing substantial and transformative efforts which is what the planet needs. Details on the compensation numbers are also not given. There doesn’t seem to be any significant decrease in GHG emissions or energy consumed over the past few years, as per the reports provided. There’s also little information on the amounts being invested in clean energy.
Gazprom
As the name suggests, Gazprom (or Public Joint Stock Company Gazprom) is in the business of natural gas. It is one of the biggest Russian companies and is majority-owned by the Government of Russia, via the Federal Agency for State Property Management and Rosneftegaz. The company has operations in the ecologically fragile Arctic shelf as well.
The company adopted its environmental policy in 1995 to become the first Russian oil and gas company to declare its voluntary environmental responsibility. However, some of its social responsibility PR verges on the absurd – for example, on its website, the company proudly proclaims the award for the ‘Best Public Non-Financial Report’ in the Oil and Gas Company category given by the Russian Ministry of Energy in 2019.
The company has set specific environmental targets with 2014 as the baseline. There has been marginal reduction in emissions and landfill in 2018. Energy consumption had increased while investments in environmental protection saw a slight decrease. In 2014″18, the Gazprom Group invested RUB 118.65 billion into environment protection and rational use of natural resources, which is approximately $1.9 billion. For comparison, the annual revenue for 2018 alone was $39.58 billion while net profit was $5.8 billion. Much of the group’s environment-related capital investments and expenditures are ploughed into water and air treatment and protection. It has an adverse environment impact fee structure.
While the environmental targets don’t seem to be ambitious or consonant with global needs, the reports provide a fairly detailed look into the company’s environment impact. However, actual efforts to drastically reduce its GHG emissions or carbon footprint are missing. Statements like ‘Gazprom supports the use of energy alternatives where it is economically and technically feasible, namely in remote or off-grid areas’ are designed to put its profits over the planet. The company likes to tout the fact that it’s better than other Russian oil and gas companies but when the benchmark is so low, it hardly matters that Gazprom is marginally better than the rest.
ExxonMobil
Another American oil and gas giant, ExxonMobil is headquartered in Irving, Texas, and is one of the world’s largest companies by revenue. As an indication of its size, between 1996 and 2017, the company was the first to sixth largest publicly traded company by market capitalisation. In 2018, the company ranked second in the Fortune 500 rankings of the largest United States corporations by total revenue.
ExxonMobil has stated its commitment to reducing methane emissions from its operations by 15 per cent and flaring by 25 per cent by 2020 (the base year is 2016), and reducing the GHG intensity at the Canadian oil sands facilities by 10 per cent by 2023. Since 2000, the company has invested more than $9 billion in its facilities and research to develop and implement lower-emission energy solutions such as cogeneration, algae biofuels, and carbon capture and storage. However, considering the time period of almost two decades, this amount is minuscule. Recently, ExxonMobil and FuelCell Energy signed a new, two-year joint-development agreement, worth up to $60 million, on carbonate fuel-cell technology for capturing carbon dioxide from industrial facilities.
Its 2018 Outlook for Energy report anticipates that global energy needs will rise about 25 per cent by 2040. Its short-term plan for this includes expanding the supply of cleaner-burning natural gas, while long term it wants to pursue technologies to improve existing operations and develop alternative-energy technologies with lower carbon intensity. Since 2000, the company’s emission-reduction projects have eliminated or captured 400 million tonnes of CO2 which, again, seems inconsequential, especially when its total emissions or energy use hasn’t witnessed a significant reduction over the years. In terms of key environment-related metrics, there barely seems to be any noticeable improvements in reducing emissions or energy use.
Muddying the waters is the fact that ExxonMobil aggressively funded climate science deniers for decades even when it knew the gravity of this global issue. The company was researching the causes and implications of climate change since at least the 1970s but did the opposite of what any responsible entity would have done. Exxon denies this, of course. It doesn’t help that the ExxonMobil Foundation continues to fund organisations like the American Council on Science and Health (ACSH), a group that includes climate deniers. The company is also infamous for its many catastrophic oil spills.
Coal India Limited
The lone Indian corporation in this notorious list, Coal India Limited’s (CIL) vision is to ’emerge as one of the global players in the primary energy sector committed to provide energy security to the country by attaining environmentally and socially sustainable growth..’
The company also says that it has ‘put utmost importance to protect environment by practicing and following sustainable mining practices right from mine planning stage’ but no concrete evidence is given to support this claim.
For environment protection and conservation, the company says that water-spraying systems, effluent-treatment facilities, domestic-sewage treatment plants, and groundwater recharge have been deployed. CIL’s subsidiaries had planted around 97.65 million trees till March 2019. The company has partnered with International Solar Alliance (ISA), through a contribution of $1 million (approximately Rs 6.75 crores), to help with technical know-how for renewable-energy projects.
CIL plans to install 3,000 MW capacity solar power plants to become a ‘net zero company’. There are a few initiatives taken up for land restoration, air pollution and water management but these are limited in scope. Data on environment-related metrics and emissions are missing except for a few on energy consumption, which hasn’t declined significantly. That the company was pulled up by the CAG in 2011 for operating 239 mines in 7 coal-producing subsidiaries without environmental clearance doesn’t inspire much confidence in its so-called commitment towards mitigating global warming. Last year, the Odisha state pollution control board issued notices to Coal India mines over its many environmental failings.
CB Thoughts
It’s not a surprise that large corporations whose business is fossil fuels will attempt to deflect and deny responsibility for their part in fuelling the climate crisis. The interesting thing to note is that after decades of lobbying against environmental regulations, denying the science, and funding reports that contradicted the scientific consensus, these companies have finally realised which way the wind is blowing and are now paying lip service to combating global warming.
However, it seems to be a case of much ado about nothing. Substantial efforts to reduce emissions and energy use and, more importantly, divest away from fossil fuels are missing. In this scenario, they continue to wreak much havoc on the planet while raking in the massive profits. It goes without saying that without global, concerted efforts to force them to do the right thing for the survival of life on this planet, these companies will persist with their business as usual. Unfortunately, with capital on their side, people power is the only way to counter their systemic hegemony that threatens each and every one of us. Any Green New Deal has to grapple with the implications of fossil fuel power.