HomeBlogFinanceBig Oil talks up green credentials, but its low-carbon investments fall short

Big Oil talks up green credentials, but its low-carbon investments fall short

Spending by five of the biggest oil and gas companies on measures to lower carbon emissions is at odds with the proliferation of green claims in their public statements, according to new research.

Sixty per cent of more than 3,000 public messages from BP, Shell, Chevron, ExxonMobil and TotalEnergies published during 2021 contained green claims, the independent think-tank InfluenceMap found. But they were expected to allocate a little more than 10 per cent of their capital expenditure to low-carbon investments this year.

The companies, except BP, were forecast to increase their oil and gas production between 2021 and 2026, according to estimates from third- party data provider Asset Resolution.

Green claims included communications on reducing emissions, moving to a cleaner energy mix and promoting fossil fuels as climate solutions. For example, discussions about “carbon neutral” liquefied natural gas.

There was a “systemic misalignment between the companies’ business models and how these are being represented to the public”, InfluenceMap said.

The five companies were “spending huge amounts of time and money talking up their ‘green’ credentials, while their business investments and lobbying activities tell a very different story”, said InfluenceMap’s programme manager Faye Holder.

Regulators are increasingly scrutinising the environmental claims made by companies and financial institutions, seeking to root out “greenwashing” and misleading statements. Climate-related litigation is also increasing, and numerous oil majors in the US are being sued for allegedly misleading the public about the effects of their carbon-intensive products.

The analysis covered 3,421 public communications, including company and executive social media accounts, press releases and speeches, from 2021 and used cost estimates in its calculations for total spending.

It found that 60 per cent of the messages contained at least one green claim, while a quarter promoted fossil fuels as patriotic due to the energy crisis, pragmatic or important for the economy and local communities.

However, the five companies’ financial disclosures indicated that they planned to allocate an average of just 12 per cent of their capital expenditure to low-carbon activities in 2022, InfluenceMap said.

TotalEnergies included certain gas-fired power in its “renewables & electricity” category, while ExxonMobil, Chevron and BP included hydrogen spending in their low-carbon investment plans. However, they did not disclose whether the hydrogen would be made from fossil fuels or clean energy.

All except TotalEnergies are members of industry lobby group the American Petroleum Institute, which has been a vocal critic of tougher climate-related laws.

A group created and funded by the API, called Energy Citizens, was among the top advertisers on social media in the past 30 days, according to Facebook owner Meta’s ad library, spending more than $350,000. The ads included the message that a US ban on new federal natural gas and oil leasing “weakens our energy security”.

In July, the API also started running adverts claiming that fracking, the process of extracting oil and gas using the high-pressure injection of fluid into rock, “provides for our energy security while minimising our environmental footprint”.

Natasha Landell-Mills, head of stewardship at asset manager Sarasin & Partners, said the research “paints a picture of a corporate effort to block more robust climate action. This jars with these same companies’ expensive marketing campaigns that portray them as building a green future for society.”

Shell said it was investing billions in “lower-carbon energy” and that it was important to tell customers about the “lower-carbon solutions we offer now or are developing”. The world “will still need oil and gas for many years to come”, it added.

ExxonMobil said although investments in “lower-emission solutions” such as carbon capture and storage, hydrogen and biofuels were “relatively small”, it anticipated “a tripling of investment by 2025”.

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