Major energy companies reducing emissions without government oversight

By Anna Hirtenstein on 9/18/2017

LONDON (Bloomberg) – The world’s energy producers are reducing their carbon emissions on a year-over-year basis. Sixty-two of the world’s 100 largest companies consistently cut their emissions on an annual basis between 2010 and 2015, with an overall 12% decline during that period, according to a report from Bloomberg New energy finance released ahead of its conference in London on Monday.

The findings suggest that industries had started to conform with initiatives before President Donald Trump took office and signaled he’d back out of U.S. participation in the Paris accord. Now, as European officials say the White House may water down its commitment to Paris instead of scrapping the deal, the BNEF report suggests industry is scaling back emissions.

“It doesn’t matter if Trump stays in Paris; it’s irrelevant as the states and big corporations are moving forward with clean energy,” Peter Terium, CEO of the German power generator Innogy, said on the sidelines of the BNEF conference on Monday. “They’re not waiting. We’re seeing renewable energy becoming more and more competitive opposite fossil fuels like coal.”

The five biggest oil companies -- Exxon Mobil, Royal Dutch Shell, Chevron, BP and Total -- collectively curbed their output by an average of 13% between 2010 and 2015, the report said. BP cut the most at 25.5%. Exxon, reduced emissions by 14%. The reductions recorded by the 100 top companies saved 70.7 million tons of carbon dioxide.

“This is a reflection of growing pressure from shareholders, investor groups and civil society for more disclosure of emissions, as well as setting reduction targets,” said Laura McIntyre-Brown, analyst at Bloomberg new energy finance. “There’s also an evident trend of increased emissions disclosure among many of the biggest companies.”

Industry Update

Exxon Mobil said it has spent about $8 billion since 2000 to deploy low-emission energy equipment across its operations and that it’s conducting and supporting research on technologies to make further cuts. An official at Shell said its new energy business is more focused on “good projects” rather than meeting a target. A press officer at Total said the figures in the BNEF report were accurate. BP and Chevron didn’t immediately respond to requests for comment.

The corporations in the BNEF survey had combined revenue of more than $5 trillion. That’s more than the gross domestic product of every country except the U.S. and China, according to data from the World Bank. They wield immense power over the global economy and are having a sizable impact on the state of the environment, both from their operations and through corporate lobbying.

While some of the reduction from major oil companies is probably due to the reduction in oil prices that began in 2014, leading to lower activity across the energy industry, all five majors have enacted climate and efficiency policies, as well as anti-pollution measures, the report said.

As the energy sector emits more than any other industry, even marginal gains can have a significant impact. Major oil companies collectively saved 56.7 million tons of carbon gases between 2010 and 2015. That sum excludes Chevron, which only started reporting in 2012.

While progress has been made, there isn’t evidence yet that the oil business could break the link between its revenue and the carbon it emits, the report concluded. While the energy industry cut emissions, its revenue declined by 26% in the same time period.

Outside the energy industry, companies collectively have managed to pare back emissions while boosting sales. Collective revenue for the 62 companies covered in the report rose 1.2% while emissions fell 12%. In all, 71 million metric tons of carbon were avoided while sales gained by $61 billion. Health providers and consumer-product makers led the trend.

“If you think about the oil and gas industry, use of oil and gas for combustion creates emissions,” said Rick Wheatley, executive V.P. of new growth at Xynteo Ltd., a consultancy that advises Shell, Statoil and Eni on sustainability and long-term planning. “If diversification into other kinds of energy is on the table, then I think it’s absolutely possible to decouple.”

The trend may continue after almost 200 countries agreed in Paris in 2015 to limits on fossil-fuel emissions, said Sean Kidney, CEO of the Climate Bond Initiative, an organization that promotes bonds sold to pay for environmental projects.

“The Paris agreement has been extraordinarily successful in establishing a new consensus,” Kidney said. ‘‘There’s a sense of future certainty developing which is influencing decision-making in the corporate sector.”

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