Shell, To­tal stand alone in emis­sions dis­clo­sure

The Denver Post - - BUSINESS - By Mathew Carr and Kelly Gil­blom

Royal Dutch Shell and To­tal SA are the only com­pa­nies among the 10 big­gest oil and gas pro­duc­ers in the world that dis­close how their car­bon emis­sions will de­cline over time, ac­cord­ing to the first anal­y­sis of its kind by man­agers over­see­ing more than $9 tril­lion of funds.

The An­glo-Dutch and French ma­jors are the only com­pa­nies among Big Oil to have set long-term plans to sig­nif­i­cantly re­duce their car­bon in­ten­sity — or the level of emis­sions per unit of en­ergy pro­duced. They are also the only two com­pa­nies to dis­close emis­sions from their sold prod­ucts, the big­gest por­tion of their im­pact on the cli­mate.

That’s ac­cord­ing to a new re­port by the Tran­si­tion Path­way Ini­tia­tive, a global pro­gram to cut cli­mate risks, which is sup­ported by man­agers in­clud­ing CalPERS and BNP Paribas As­set Man­age­ment.

“TPI re­search raises very im­por­tant ques­tions about how in­vestors such as our­selves view oil and gas com­pa­nies,” said Al­varo Ruiz-Nava­jas, port­fo­lio man­ager at BNP Paribas As­set Man­age­ment. He added that it “ul­ti­mately af­fects our over­all al­lo­ca­tion” as the funds man­ager de­ter­mines whether it is suc­cess­fully man­ag­ing cli­mate risks.

BP, Cono­coPhillips and Eni SpA have tar­gets but only for emis­sions gen­er­ated in the pro­duc­tion process, the study found. The re­main­ing five com­pa­nies still don’t have quan­ti­fied tar­gets — and one of them, Re­liance Petroleum Ltd., doesn’t dis­close op­er­a­tional emis­sions at all.

Shell, To­tal, BP, Conoco and Re­liance didn’t re­spond to Bloomberg News re­quests for com­ment.

The find­ings of the re­port will be used by in­vestors de­cid­ing where to al­lo­cate their cap­i­tal. They may ad­just their hold­ings as they at­tempt to avoid be­ing left with shares that might drop in value as the world seeks to ad­here to the 2015 Paris cli­mate deal, which aims to keep tem­per­a­tures from ris­ing more than 3.6 de­grees Fahren­heit above prein­dus­trial lev­els.

In­vestors man­ag­ing some $30 tril­lion of as­sets are in­creas­ingly prod­ding the world’s big­gest pol­luters to come up with stronger green strate­gies.

The study shows that, while Shell and To­tal’s plans would even­tu­ally com­ply with ex­ist­ing tar­gets un­der the Paris agree­ment, they aren’t am­bi­tious

enough to meet the emis­sions-re­duc­tion tra­jec­tory im­plied by it.

The re­sults “re­ally dis­tin­guish Shell and To­tal from their peers,” said Adam Matthews, co-chair of the ini­tia­tive and di­rec­tor of ethics and en­gage­ment at Church of Eng­land Pen­sions Board. Still, all of the com­pa­nies and law­mak­ers need to do much more be­cause reg­u­la­tion of the sec­tor isn’t yet in line with Paris, he said by phone.

Funds man­agers will “use this in­for­ma­tion in dif­fer­ent ways,” Matthews said.

The Church of Eng­land Pen­sions Board has $855 mil­lion in pas­sive funds and is al­ready ex­am­in­ing how to re­al­lo­cate some of that money in the next year to fa­vor com­pa­nies re­act­ing ap­pro­pri­ately to the Paris deal, he said.

Shell suc­cess­fully fought a share­holder res­o­lu­tion this year that it set even more am­bi­tious emis­sions tar­gets, after an ac­tivist in­vestor warned that its busi­ness plan may not be in line with the Paris agree­ment.

CEO Ben van Beur­den stren­u­ously dis­agreed that was the case and cited a plan to cut its net car­bon foot­print in half by 2050, in­clud­ing re­duc­ing emis­sions from its customers.

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