Abstract
The energy products of oil and gas majors have contributed significantly to global greenhouse gas emissions (GHG) and planetary warming over the past century. Decarbonizing the global economy by mid-century to avoid dangerous climate change thus cannot occur without a profound transformation of their fossil fuel-based business models. Recently, several majors are increasingly discussing clean energy and climate change, pledging decarbonization strategies, and investing in alternative energies. Some even claim to be transforming into clean energy companies. Given a history of obstructive climate actions and “greenwashing”, there is a need to objectively evaluate current and historical decarbonization efforts and investment behavior. This study focuses on two American (Chevron, ExxonMobil) and two European majors (BP, Shell). Using data collected over 2009–2020, we comparatively examine the extent of decarbonization and clean energy transition activity from three perspectives: (1) keyword use in annual reports (discourse); (2) business strategies (pledges and actions); and (3) production, expenditures and earnings for fossil fuels along with investments in clean energy (investments). We found a strong increase in discourse related to “climate”, “low-carbon” and “transition”, especially by BP and Shell. Similarly, we observed increasing tendencies toward strategies related to decarbonization and clean energy. But these are dominated by pledges rather than concrete actions. Moreover, the financial analysis reveals a continuing business model dependence on fossil fuels along with insignificant and opaque spending on clean energy. We thus conclude that the transition to clean energy business models is not occurring, since the magnitude of investments and actions does not match discourse. Until actions and investment behavior are brought into alignment with discourse, accusations of greenwashing appear well-founded.
Highlights
Efforts to limit planetary warming to below 2 ̊C or 1.5 ̊C entail a transition to net-zero-emissions energy systems by 2050 [1]
Focusing on four—ExxonMobil, BP, Shell, and Chevron—we examine behavior from three perspectives: (1) discourse: frequency of climate- and clean-energy-related keyword use in annual reports; (2) strategies: pledges and actions related to decarbonization and clean energy and (3) investments: production, expenditures and earnings for fossil fuels as well as investments in clean energy
We focus on annual reports because they are the most official and representative of the various documents written to shareholders and stakeholders, and because their consistent year-to-year format is well suited to comparisons
Summary
Efforts to limit planetary warming to below 2 ̊C or 1.5 ̊C entail a transition to net-zero-emissions energy systems by 2050 [1]. This carries vast implications for fossil fuel producers. Twenty fossil fuel companies are responsible for 35% of all energy-related carbon dioxide (CO2) and methane emissions worldwide since 1965 [2, 3]. The leading investor-owned emitter is Chevron, followed closely by Exxon, BP, and Shell. The products of these four energy giants account for more than 10% of global carbon emissions since 1965 [2, 3]
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