Seven European energy majors and the US' Occidental Petroleum have jointly developed and agreed on six principles as part of a "collaborative platform" to support the energy transition, according to a statement Dec. 17.
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BP, Shell, Eni, Equinor, Galp, Repsol, Shell, Total, and Occidental have agreed to apply six energy transition principles as part of efforts to combat climate change.
"Meeting the challenge of tackling climate change requires unprecedented collaboration between energy companies, governments, investors and other stakeholders," the CEOs of the participating companies jointly said.
"The principles will act as a framework for actions leading energy companies are taking together, as well as a platform for collaborating with wider stakeholders," they said.
The principles support "collective industry acceleration" to contribute to the Paris Agreement objectives with a focus on reducing greenhouse gas emissions, developing carbon sinks, and transparency.
The six principles are:
- To publicly support the goals of the Paris Agreement, including international cooperation as a vehicle to ensure these goals can be achieved at the lowest overall cost to the economy.
- In line with each company's individual strategy, ambitions and aims, to work to reduce emissions from their own operations and strive to reduce emissions from use of energy, together with customers and society. Companies may measure their contributions using carbon intensity and/or absolute metrics at different points in the value chain as determined by their approach.
- To collaborate with interested stakeholders, including energy users, investors and governments, to develop and promote approaches to reduce emissions from use of energy, in support of countries delivering their Nationally Determined Contributions (NDCs) towards achieving the goals of the Paris Agreement.
- To continue to support and promote development of emissions sinks such as carbon capture, utilization and storage technology (CCUS) and natural sinks.
- to provide disclosure related to climate change risks and opportunities consistent with the aims of the recommendations of the taskforce on Climate-related Financial Disclosures (TCFD).
- To report information about their memberships of main industry and trade associations and their alignment with the companies' key climate advocacy and policy positions.
A major issue raised by many stakeholders in the energy transition is the methodology used by the industry in reporting their emissions, with increasing calls for more consistency and transparency in the metrics used to report on climate-related performance.
While each company has its own strategy, aims and ambitions regarding the energy transition, many of the companies are collaborating on two further strands of technical work.
The first is on increasing transparency and consistency of the definitions and scopes used for data reporting, and acknowledging where differences remain "due to the diversity of the companies' businesses and approaches."
The second is to work to develop a consistent methodological framework to measure and report the net carbon intensity of their energy products and emissions reduction activities.
"This is an important foundational commitment," Adam Matthews, Chair of the Climate Action 100+ European Investor Working Group on a Net Zero Standard, said.
"It represents a significant consolidation of the progress that has been made in Europe whilst also seeing the first US oil and gas company joining with their European peers," Matthews said.
"It is extremely helpful to have a position from these companies that unifies around core principles including on Scope 3 emissions and corporate lobbying."
Climate Action 100+ is an investor initiative launched in 2017 to ensure the world's largest corporate greenhouse gas emitters take necessary action on climate change.
To date, more than 500 investors with more than $51 trillion in assets under management have signed on to the initiative.