Colossal fossil Chevron Corporation may have headed off a shareholder showdown by committing to reduce its greenhouse gas emissions to match up with the Paris Agreement. But that doesn’t mean it plans to cap its oil output or take responsibility for the emissions that result when customers use its products as directed.
In a report published last week, Chevron “pledged to reduce air pollution intensity by 25 to 30% by 2023, as recommended in the Paris agreement that took effect in 2016,” Bloomberg reports. “The target applies across the company’s global portfolio, including assets in which it owns stakes but is not lead operator. The metric will also be a factor in determining employee bonuses.”
Even though the targets “won’t apply to emissions created by consumers using Chevron products, a key demand from environmentalists and activist investors,” the announcement “may defuse an investor proposal to be considered at its annual meeting this year,” Bloomberg notes. “Shareholders As You Sow and Arjuna Capital asked the oil supermajor to adopt the Paris targets, including the use of Chevron’s products by consumers as well as emissions from refineries and other plants.”
The news agency casts the announcement as “a significant policy shift for Chevron, whose Chief Executive Officer Mike Wirth is one year into the role.” The company also announced last September that it would join the Oil and Gas Climate Initiative, alongside companies like ExxonMobil and Occidental Petroleum Corporation, and contribute US$100 million to a billion-dollar OGCI fund devoted to studying greenhouse gas reduction technologies for fossils.
Chevron said it would support using climate-related criteria and market-based strategies to reduce greenhouse gas emissions “as long as policies don’t punish specific companies,” Bloomberg notes.
“Compelling select oil and gas producers to unilaterally reduce their production or change their portfolios to align with a possible future energy mix does not advance the goals of the Paris Agreement,” the Chevron report stated.
The company hinges its analysis on the believe that even “the most aggressive climate scenarios” show oil and gas supplying almost half of the world’s energy demand in 2040.
“If we’re going to continue to provide this ever growing demand for energy, we’ve got to be sure we’re doing that in the cleanest, most responsible way,” Mark Nelson, the company’s vice president of strategy and midstream, told Bloomberg. “This is the right thing to do because it’s actionable and accountable for our company and our stakeholders.”