Chevron vows to cultivate net zero ambition
First time the oil major has outlined a multidecade strategic commitment to reduce emissions
Chevron committed to a net zero “aspiration” from its operations as the company responded to rising investor and societal pressure to play a bigger role in the transition to a low-carbon future.
Chevron also set a target of reducing carbon intensity 5% from 2016 levels by 2028 for the full life cycle of its products, the San Ramon, California-based company said on Monday in a report. The target includes Scope 3 emissions, or those of its customers, in its pollution targets after losing a shareholder vote in May.
The portfolio carbon intensity target “represents the full value chain carbon intensity of the products we sell, including our own emissions, emissions from third parties, and emissions from customer use of our products”, Chevron said.
While the pledge falls short of those made by European peers such as Royal Dutch Shell and BP, it is the first time Chevron has outlined a multidecade strategic commitment to reduce emissions. The goals focused on carbon intensity, a relative measure to the amount of energy produced rather than absolute levels of pollution, which means the company can still grow overall production but must do so more cleanly.
In September CEO Mike Wirth emphasised the importance of having an achievable carbon strategy that balances the world’s need for reliable energy with lowering emissions. The global shortage of natural gas, along with the run-up in oil and coal prices over the past few weeks, emphasises how dependent the world still is upon fossil fuels.
In May shareholders voted for the company to reduce Scope 3 emissions, despite Chevron’s board urging them not to do so.
Earlier on Monday, Qatar, the world’s biggest exporter of liquefied natural gas, said it would be wrong to commit to eliminating planet-warming emissions without having a proper plan in place.
Wirth has bound Chevron’s climate efforts with a strategy of improving financial returns, arguing that one without the other will not work for shareholders and the environment. The company is committed to oil and gas for the long term but is also making dozens of small-scale bets on new technologies such as renewable natural gas that it believes can scale up in the future.
The approach contrasts with that of its European peers, which are planning to pivot towards more renewable energy sources over time.
Bloomberg News. More stories such as this are available on bloomberg.com
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