Companies on the emissions radar at COP27

Corporations are coming under the glare of climate activists and policymakers after speeches at the ongoing UN climate summit in Egypt, COP27, called on companies to pay a global carbon tax to help small island states adapt to climate change.

“The oil and gas industry continues to earn almost $3bn daily in profits,” said Gaston Browne, Antigua’s prime minister, at the conference on behalf of the Alliance of Small Island States. “It is about time that these companies are made to pay a global carbon tax on their profits as a source of funding for loss and damage. While they are profiting, the planet is burning.”

The idea of firms coughing up to help finance global efforts to curb emissions and mitigate the effect of increasingly intense floods, droughts wildfires and heatwaves is not new.

But the concept of a carbon tax for corporations is likely to gather more support from governments and international bodies as estimates for the funding needed to battle climate change surge with government budgets being drained by soaring inflation and hefty bills from energy transition efforts.

Browne zeroed in on global oil and gas majors, which have raked in billions in profits from extracting, selling and processing the fossil fuels that have been a chief source of climate-impacting emissions.

In 2021, the top 10 largest oil and gas corporate emitters discharged a collective 775.9million tonnes of carbon dioxide and equivalent gases, according to the Refinitiv Sustainability Leadership Monitor.

That compares to roughly 33billion tonnes of CO2 emitted from all sources in 2021, according to the latest BP Statistical Review of World Energy.

More than 40% of the oil and gas sector emissions came from China’s two largest oil majors alone — Sinopec and PetroChina

— while investor staples including Shell, Saudi Aramco and Chevron also ranked high in the emissions table.

But collective CO2 discharge from electricity producers in 2021 was even greater than the volume spewed out by oil and gas majors, weighing in at 990.1-million tonnes, Refinitiv data shows.

Once again, China-based companies came out on top, and accounted for more than half of the CO2 from the 10 largest global firms in the utilities and power segment in 2021. However, companies from the US, Europe, India and Japan also made the top 10 leader board.

Global metals and mining firms also racked up a significant collective emissions tally in 2021, hitting close to 600-million tonnes of CO2 and equivalent gases. Cement producers, however, were by far the largest overall polluters, with the top 10 emitting over 1.1-billion tonnes in 2021. Six of the top 10 were from China, with Europe-based firms coming in second.

As the chief actors in the global economy, corporations clearly produce a sizeable effect in terms of pollution and on the overall environment.

Fossil fuels and companies that peddle them have borne the brunt of the blame at the COP27 climate summit so far.

But climate policymakers must look beyond the oil and gas industry if they want a clearer understanding of the true scope of company-level CO2 discharge across all segments.

In addition, it is important to be aware of the wide geographic spread of top-tier polluters. Perennial climate whipping boy China is certainly a major player in every facet of pollution discharge. But policymakers looking to harness efforts to fight climate change must take efforts to cut back on the pollution coming out of the US, India, Japan, Brazil, Russia and elsewhere as well.