Hydrocarbon hypocrisy: Big oil calls for climate action as it undermines it


Oil and gas majors, beset by fading fortunes, increased competition from renewables, and the growing clean economic transition, are fighting for relevance ahead of the Paris climate talks. European fossil fuel companies including Shell, BP and Total, have made new pledges to combat climate change through “cleaner energy” while calling for a strong Paris deal and for global carbon pricing. US firms like Exxon and Chevron have so far refused to follow suit, possibly because their reputations on climate are already too far gone for greenwashing, but their European counterparts’ continued attempts to expand oil drilling and anti-climate lobbying activities don’t exactly help their credibility either. A new report by InfluenceMap analyses the huge gap between oil firms’ climate-friendly faces and the way they sabotage climate policy through their membership of obstructive trade associations. Campaigners say that only a transformation of their business models from fossil fuels to renewables – and giving up their membership of harmful lobby groups – would show they are serious.


Key Points


The oil and gas firm CEOs who will make climate commitments today – those of BP, BG Group, Total, Eni, Statoil and Repsol – are doing so under the umbrella of the industry grouping the The Oil and Gas Climate Initiative (OGCI). So far, this group is mostly made up of European companies, while their US counterparts have refused to endorse any climate-friendly words or actions.

Some members of the OGCI previously sent a letter to Christiana Figueres calling for a global carbon price; she responded welcoming the call but urging them to more ambition and urgent action.

Many commentators from the climate sphere are cynical about big oil’s intentions. They argue that the oil firms want to polish up their climate credentials to remain at the table in the run-up to the crunch climate change conference in Paris this December, and know calling for a carbon price would be seen favourably while in actual fact it would take the responsibility for change off their shoulders and onto those of governments.

In the meantime, the companies that had called for action continue with business as usual, pumping oil and developing plans to drill despite widespread opposition and the potentially catastrophic impacts of a spill on jobs, local economies, communities and wildlife.

A new report on ‘oil hypocrisy’, entitled ‘Big Oil and the Obstruction of Climate Regulations’ from UK-based InfluenceMap analyses the disparity between the stated positions on climate policy of Shell, BP, Total, Exxon and Chevron and their continued support for highly obstructive trade bodies. It uses an evidence base to highlight the clear misalignment rating for each company. Investors are already demanding that big energy companies pull out of trade bodies which lobby against climate change policy.

Climate and indigenous groups are also calling for global reporting standards for extractive industries – the Extractive Industries Transparency Initiative (EITI) – to include transparency from fossil fuel companies about the future viability of their oil, coal and gas projects in a warming world. The EITI board includes representatives of Shell, BP, BHP Billiton, Rio Tinto, Exxon, Chevron, Statoil and Total.

Calling for action on climate change may be “as trendy as it gets for corporations these days”, but if the group is serious, and existing oil reserves are unlikely to ever be fully exploited due to climate concerns – as BP’s chief economist says – then why is the company pushing ahead with risky new drilling projects? Especially when oil is being tipped to hit US$10-20 a barrel.
Campaigners say only by a radical change in their business models that reflects the demise of fossil fuels and supports the transition to 100 per cent renewables will oil companies prove their commitment to tackling climate change and ensure they remain viable in the low-carbon future. As long as these companies, from Europe, the US and elsewhere – continue to pump oil and block legislation which could hurt their bottom lines by healing the environment, their calls for climate action will ring hollow.


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Key Quotes

  • “It is not in investors’ interests to have companies funding and supporting business organizations delaying the implementation of effective climate legislation. We need greater regulatory certainty, and an effective carbon price signal to shift capital markets, support investment decisions, and reduce portfolio carbon risk.” – Arne Lööw, Head of Corporate Governance, Fourth Swedish National Pension Fund/ AP4
  • “Companies like Shell appear to have shifted their direct opposition to climate legislation to certain key trade associations in the wake of increasing scrutiny. Investors and engagers need to be aware that these powerful energy and chemicals-sector trade bodies are financed by, and act on the instruction of, their key members and should thus be regarded as extensions of such corporate-member activity and positions.” – Dylan Tanner, InfluenceMap, Executive Director
  • “If oil and gas companies calling for a price on carbon want to be taken seriously it is imperative that they commit both to calling on governments to implement such a policy and at the same time ensuring that all their lobbying is 100 percent consistent with this objective. This is a strong line to take that has to be held accountable by investors, shareholders, governments and the public. Any company not able to do this should not be taken seriously when calling for such action in relation to climate change and such a call should then be seen for what it is, a cynical attempt to manipulate public opinion and create the perception amongst shareholders that the company is taking the issue of climate change seriously.” – Anthony Hobley, CEO of Carbon Tracker
  • “Oil is not likely to be exhausted. What has changed in recent years is the growing recognition [of] concerns about carbon emissions and climate change. Existing reserves of fossil fuels – i.e. oil, gas and coal – if used in their entirety would generate somewhere in excess of 2.8 trillion tonnes of CO2, well in excess of the 1 trillion tonnes or so the scientific community consider is consistent with limiting the rise in global mean temperatures to no more than 2DegC And this takes no account of the new discoveries which are being made all the time or of the vast resources of fossil fuels not yet booked as reserves.” – BP Chief Economist Spencer Dale
  • “If BP is so enlightened about climate change it should drop its proposal to drill for oil in the Great Australian Bight. Even BP chief economist Spencer Dale yesterday admitted that oil and gas reserves will have to be left in the ground so BP should start with leaving the oil alone under the Great Australian Bight.” – Australian Wilderness Society National Director Lyndon Schneiders
  • “[K]nowingly, [Exxon] helped organise the most consequential lie in human history, and kept that lie going past the point where we can protect the poles, prevent the acidification of the oceans, or slow sea level rise enough to save the most vulnerable regions and cultures. Businesses misbehave all the time, but VW is the flea to Exxon’s elephant. No corporation has ever done anything this big and this bad.” – 350.org founder Bill McKibben

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