The 2023 Oil and Gas Benchmark study assessed the top oil and gas companies from around the world, including BP, China National Petroleum Corporation (CNPC), ExxonMobil, Saudi Aramco and TotalEnergies, and found ‘a dangerous lack of progress towards global climate goals’ from the sector. Noting there ‘has been little advance – and alarmingly even some decline – in oil and gas companies’ progress on limiting global warming to 1.5 degrees’, the report found that overall scores across the Benchmark have fallen, on average, by 0.2 points in the past two years.

As a result, the WBA is calling for ‘rapid action from the oil and gas sector to ensure a just transition to a zero carbon future, with the need to see accelerated pressure from investors, policymakers and the public critical to hold the sector accountable’.

The research suggests that ‘even though the oil and gas sector has a wealth of resources and tools available to decarbonise, it is failing to use them’. It reports that the seven major oil and gas companies made a record $380bn profits last year but ‘despite this, investment to reach a low-carbon economy has fallen dangerously short’.

To halve the sector’s Scope 1 and 2 emissions, companies need to invest $600bn by 2030 into low-carbon solutions, states the report. However, only 29 companies have even disclosed targets to reduce methane emissions by that date.

About 80% of the sector’s emissions come from the use of oil and gas products (Scope 3 emissions). ‘The sector’s only route to transition is phasing out fossil fuels. While this cannot happen overnight, companies are not even putting plans in place, and there is no sign that companies are slowing down extraction,’ claims the WBA. It adds: ‘Last year, the sector committed half a trillion dollars for new drilling and extraction. In fact, the 81 oil and gas companies with extraction activities are predicted to increase total oil production by 9% from 2021, peaking in 2028. Over half of companies assessed still link executive remuneration or incentives to the growth of fossil fuels, and only 18% of assessed companies have Scope 3 emission targets.’

Only 25% of companies assessed report how much of their capital expenditure is invested in low-carbon technologies. ‘On average, these companies only dedicate around 18% of their investment in decarbonisation,’ notes the report. Just one company, Neste, is considered to be investing enough ‘for a credible transition’, spending 88% of its investment on low-carbon options such as advanced biofuels.

Commenting on the study, Vicky Sins, WBA’s Decarbonisation and Energy Transformation Lead, says: ‘The oil and gas sector’s failure to address emissions from its products and operations hampers international efforts to limit global warming to 1.5°C. In the run up to COP28 in Dubai, all eyes are on the oil and gas industry. But these companies are not planning for a low-carbon future and are failing to take responsibility in the immediate and long term. It is deeply concerning that no companies have made a commitment to halt the expansion of fossil fuel activities before 2030.’

In addition to decarbonisation, the WBA is calling for immediate and significant investment in protecting workers and communities who will be impacted by the transition to a net zero future. ‘A just transition must consider those who are at risk of negative impacts from necessary change, and account for them through investment in skills, training and human rights due diligence,’ it says.