While more auto companies are rallying to flood the world market with electric vehicles, the petroleum industry is taking the off-ramp. Not only have global oil producers generally failed to invest substantially in renewable-energy technologies; now they’re reneging on their green commitments.
When you look at the oil industry’s efforts to decarbonize, the results are lacklustre. By our count in 2022 – seven years after the Paris Agreement – the vast majority of oil companies still earn less than 1% of their revenue from renewable sources.
The best performer was France’s TotalEnergies, which calls itself “a major player in renewable energy production,” including hydroelectricity, solar, wind power and biofuels. In 2022, Total’s green energy resources accounted for a negligible 1.3% of total revenue. Other underperformers on our list are U.K. giant BP, at 1%; Canada’s Suncor, at 0.29%; Shell, at 0.15%; and Norway’s Equinor, at 0.12%.
A closer look at their capital investments, however, indicates that in 2022 a few key players were earnestly investing in turning that ship around. Total put an impressive 34% of its total investment capital into sustainable projects – up from 26% in 2021. BP, in second place, directed 26% of its investments to green activities in 2022, up from 19%. Shell took third place, with 19%, but quintupled its green investments (in wind, solar, hydrogen and EV charging) over 2021. Suncor invested 10.4% of its capital on green projects in 2022.
But 2023 has been the year of oil industry backpedalling on renewables and doubling down on fossil fuels.
In February, BP halved its target for cutting emissions by 2030, to between 20% and 30% versus its previous goal of 35% to 40% – despite shareholders having approved the original plan. In April, Total made a similar announcement, with CEO Patrick Pouyanné arguing that the additional production would help keep oil prices low. In May, new Suncor CEO Rich Kruger, an Exxon veteran, announced four priorities – safety, operations, reliability and profitability – with no mention of climate. In June, Shell’s new CEO said the firm was cancelling its planned, orderly cutback in oil production, calling cuts “dangerous and irresponsible.”
Meanwhile, back at the henhouse, COP28 president – and oil industry executive – Sultan al-Jaber said he has convinced more than 20 oil and gas firms to recommit to net-zero at November’s climate summit in oil-rich United Arab Emirates. “For too long, this industry has been viewed as part of the problem,” said al-Jaber. “This is your opportunity to show the world that, in fact, you are central to the solution.”
