Oil majors go slow on green transition despite pressure
Most oil majors are stepping up investments in green energy but they are facing a barrage of recriminations and protests from activists for their refusal to completely forsake fossil fuels.
Campaigners again used a series of shareholder meetings in the past month to make their anger known and push energy firms to do more to shift towards solar, wind and other cleaner projects.
In the latest action, hundreds of protesters tried to block the gathering of France's TotalEnergies in Paris on Friday, prompting police to use tear gas to disperse some who sat in front of the venue.
Earlier this week in London, protesters demonstrated outside Shell's annual general meeting. Inside, activists interrupted the opening remarks of CEO Wael Sawan while others tried to take the stage.
Late last month, activists from Fossil Free London disrupted the speeches of BP's chairman and CEO.
Groups of investors are also demanding change -- even the Church of England's pensions board has weighed in, deciding to join others in voting against Shell's "green" transition plan and demanding more ambitions carbon-cutting targets.
Since 2021 the International Energy Agency (IEA) has called for a stop to new oil projects so the world meets the goal of keeping global temperatures to 1.5 degrees Celsius above pre-industrial levels.
But new oil fields are still opening as energy firms say they must meet the unabated demand for the fossil fuel.
"Climate is at the heart of our concerns," TotalEnergies CEO Patrick Pouyanne told Friday's shareholder meeting as he spoke behind a plexiglass that was put up for the occasion.
He said his group has done more than others to invest in renewables but that world oil demand is growing and "if TotalEnergies doesn't respond to this demand, others will do it for us".
Shareholders later voted overwhelmingly in favour of the company's climate strategy, tough 30 percent backed a non-binding resolution from activist investors calling for more ambitious emissions targets.
- 'Tiny' investment -
Oil and gas groups -- which posted huge profits last year -- have set objectives to reduce emissions but their investments in renewable energy and carbon capture remain a marginal amount of their overall spending.
According to the IEA, such spending rose from one percent in 2020 to five percent of total expenditures by last year, still only representing a quarter of what energy firms paid out to shareholders.
European firms such as TotalEnergies and Equinor are doing better than their peers, but "their investment in clean energy is tiny compared to their capital expenditure on oil and gas expansion", said David Tong, global industry campaign manager at Oil Change International.
Other than renewables and carbon capture, energy firms also have expertise that could be put to use in the production of hydrogen, biogas, ethanol and low-carbon fuels, said Christophe McGlade, head of the IEA's energy supply unit.
"If they can direct more of their spending towards those technologies, that could really move the needle in terms of getting them to scale up, and getting the deployment levels we need to get on track with net zero," he said.
- Reaching net zero -
The emissions reduction efforts made by energy majors have concerned mostly their own operations, which represent only about 15 percent of their overall carbon footprint.
They have in particular been battling against methane leaks and reduced the burning of unwanted natural gas at oil fields.
Such measures have helped BP reduce its emissions by 41 percent from 2019 to 2022, and it has upped its 2030 target to a 50 percent reduction.
Even US oil majors, which have long resisted recognising the need to reduce emissions, have begun to do so. ExxonMobil plans to cut its proper emissions by a fifth by 2030, from 2016 levels.
But the bulk of the work is elsewhere: reducing the climate impact from its products as they are burned in cars or furnaces -- indirect emissions that account for 85 percent of the sector's overall carbon footprint.
Yet oil and gas firms are not cutting investment in fossil fuel exploration and production. The IEA forecasts that it will rise this year to hit the 2019 pre-pandemic level.
BP announced earlier this year knocked back its emissions reduction plans. Instead of a 35-40 percent drop in indirect emissions linked to its production by 2030, BP now targets a 20-30 percent reduction.
"If companies are banking on continued increases in oil and gas demand, they are implicitly assuming that we will not reach our net zero targets and not limit climate change," McGlade said.