All the new buzzwords of Big Oil
Big oils are increasingly touting their plans for emerging clean energy technologies. Bloomberg's analysis
The world's largest oil and gas companies are more likely to talk on Wall Street about emissions than how their business might grow.
That's, at least, according to a Bloomberg analysis of conference calls from the 25 largest fossil fuel producers in the world, including Exxon Mobil Corp. and Gazprom PJSC. The data shows how environmental buzzwords and key phrases like "carbon", "climate change" and "renewables" are finding their way into conversations with analysts and investors like never before.
The trend suggests that management teams, at least publicly, are increasingly engaged on the subject. They are under increasing pressure from investors and environmentalists to come up with a plan to reduce greenhouse gas emissions and prepare for a low-carbon future. This push comes as the world's largest economies aim to accelerate the shift from more polluting hydrocarbons to cleaner energy sources.
Beyond the dialogue, how far these companies have progressed in terms of concrete steps to address environmental, social and governance issues – particularly the “E” of ESG – varies and is the subject of much discussion. While energy giants like BP Plc and Royal Dutch Shell Plc have set targets for net zero carbon emissions by 2050, most of their peers are lagging behind in varying degrees. When it comes to ESG, it remains to be seen whether the energy industry can do more than talk.
"Every single company, especially the big fossil fuel producers, needs to feel the pressure right now," said Laura Zizzo, co-founder and CEO of Manifest Climate, a Toronto-based software and consulting firm that helps companies to tackle climate change.
Investors who logged into the fossil fuel giants' conference calls this year heard the word "carbon" spoken 800 times, surpassing 790 mentions of "growth" for the first time ever. References to words related to the energy transition so far this year have already surpassed those of all of 2020.
The terms "carbon", "methane", "climate change", "renewable energy" and "emissions" have been mentioned more times in this year's calls than in all the years up to 2013. References to emissions targets " net zero ”emerged in the calls made by 21 of the companies analyzed.
"Addressing the energy transition is fast becoming one of the most important issues for the industry," Ryan Lance, CEO of US explorer ConocoPhillips Inc., said last month in a phone call with analysts.
Bloomberg's analysis is based on a search for words related to ESG issues in the transcripts of quarterly earnings calls and other events for investors from the largest energy companies that regularly hold calls in English. The transcripts include questions and comments from analysts and investors.
Carbon capture and sequestration, an expensive technology that climate scientists have long considered an essential component to meeting emission reduction targets, has also emerged as a hot topic. It has been mentioned more than 160 times this year – three times more than in 2020 – in calls from companies including Equinor ASA and Ecopetrol SA.
Fossil fuel companies are increasingly touting their plans for emerging clean energy technologies. Oil refiners like Marathon Petroleum Corp. and Houston-based Phillips 66 are talking about wind and solar power. Hydrogen, a clean-burning fuel that can replace natural gas in heating and power generation, has been cited a record 284 times this year in conference calls, including those held by Royal Dutch Shell Plc and TotalEnergies SE in Kinder Morgan Inc. and Suncor Energy Inc.
The energy sector is the largest source of greenhouse gas emissions and reducing those to eliminate pollution by 2050 will require huge decreases in the use of coal, oil and gas and the massive adoption of renewable energy sources. said the International Energy Agency in a May report. This should also mean no new investment in fossil fuel supplies over the next few years.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/big-oil-energia-pulita-cambiamento-climatico-esg/ on Sat, 24 Jul 2021 06:00:39 +0000.