Net zero target for oil majors


Oil majors are going green in an effort to improve their public image, as well as to save the planet.

The oil companies which are seen to be doing the most to protect the environment are Total, Shell, BP and Canadian Petroteq Energy, according to Investopedia, with BP announcing that one of its aims is to be net zero across its operations on an absolute basis by 2050 or sooner.

The company plans to increase the proportion of investment into non-oil and gas businesses over time and to "help the world get to net zero" through the likes of advocacy, incentivising and setting new expectations for trade relationships.  

Shell's green energy plans are some of the most ambitious in the oil industry, but the company, which is seen as a climate leader, is at risk of not meeting its plans to invest up to $6bn (£4.6bn) in green energy projects between 2016 and the end of 2020. It is currently on track to meet only a third of the investment.

Repsol, which says that it's the first in its sector to claim the target, has made a number of financial adjustments to achieve its aim to be a net zero emissions company by 2050.

Taking a hard line on climate change, the Royal Bank of Scotland is pressuring BP and Shell amongst other oil majors to satisfy that they are in line with the 2015 Paris agreement if they don't want to lose the bank's support. The bank has said that big oil and gas companies have until the end of 2021 to put “a credible plan” in place. It's not yet clear what constitutes the cut-off point for what constitutes a "major" oil producer.

While tackling the issue of climate change is clearly on the radar for oil majors, it has not only been pressure from investors that may have effected the change. Government agencies, consumers, activitists and shareholders are strong forces to be reckoned with.

The oil industry's concern for the planet may be genuine but it is also likely to be a reaction to loss of “social licence to operate” (a company’s ability to go about its business without too much challenge). Rebranding and new logos are part of this move to improve oil majors' image.