Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) absent from $1 billion investment pledge by 10 global oil companies in fight against climate change
The United States looks to its presidential election this week to see if Republican candidate Donald Trump - who is dismissive of the Paris Agreement on climate change and has vowed to “cancel” it – is elected. In London, 10 of the world’s largest oil companies marked the agreement coming into effect on Friday, Nov. 4, with a pledge to spend $1 billion together over the next decade to explore policies to help fight climate change.
With the U.S. election falling on the second day of the latest round of U.N. climate talks (COP 22) this week in Marrakesh, Morocco, the gesture by Big Oil was clearly timed carefully. But among the list of big company names, two were missing – Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX).
On Mr. Trump’s presidential candidacy, Ségolène Royal, the French environment minister, said on Thursday evening before that she would not even “entertain the hypothesis” of a Trump victory because that “gives credibility to the idea.” On his threat to withdraw from the Paris Agreement, she said: “Maybe he needed more financing from the oil lobby.”
The absence of the two largest U.S. oil producers from the investment pledge made by the Oil and Gas Climate Initiative (OGCI) launched in 2014, is notable. So is the relatively small size of the $1 billion investment for the 10 companies involved. They account for one-fifth of the world’s oil and gas production, and over 10 percent of energy supply.
Their $1 billion commitment is “to develop and accelerate the commercial deployment of innovative low emissions technologies.” The ten oil and gas companies include BP (LON:BP), Saudi Aramco, Royal Dutch Shell (LON:RDSA), Pemex, Norway’s Statoil (NYSE:STO), Repsol (NYSE:TLM), China’s CNPC, ENI (BIT:ENI), Reliance Industries Limited (BOM:500325) and France’s Total SA (EPA:FP).
In a joint statement, the heads of the companies that comprise the OGCI said: “The creation of OGCI Climate Investments shows our collective determination to deliver technology on a large-scale that will create a step change to help tackle the climate challenge. We are personally committed to ensuring that by working with others our companies play a key role in reducing the emissions of greenhouse gases, while still providing the energy the world needs.”
OGCI says it will “aim to deploy successfully-developed new technologies among member companies and beyond.” It will also identify ways to cut the energy intensity of both transport and industry.
“Working in partnership with like-minded initiatives across all stakeholder groups and sectors, the OGCI CI believes its emission reduction impact can be multiplied across industries,” it said.
It has identified two initial focus areas: accelerating the deployment of carbon capture, use and storage; and reducing methane emissions from the global oil and gas industry in order to maximize the climate benefits of natural gas. However, the $1 billion focus does not appear to include the challenging world of renewable energy.
A CEO and management team for OGCI Climate Investments is to be announced in the near future, it said.
“As CEOs or Chairmen of OGCI member companies we are committed to showing leadership in our industry’s response,” said the CEOs involved in a personal declaration. “We believe there is significant need and many opportunities for innovation and investment in solutions that can reduce GHG emissions on a large scale – and we are in action to take them,” it said.
Dina Medland is an independent writer, editor and commentator with a strong focus on issues around corporate governance, ethics, the workings of the boardroom and sustainable business. She is on the team of contributors to @ForbesEurope and is an ex-Financial Times staff member who has been a regular contributor in recent years. Further details about her background and a portfolio of work – including her commercially sponsored blog ‘Board Talk’ are available on her website