New Study Ranks Eight Major Fossil Fuel Companies on Their Climate Change Actions
An in-depth analysis by the Union of Concerned Scientists (UCS) of eight leading fossil fuel companies found significant variations in how they are addressing global warming, but none has made a clean break from disinformation on climate science and policy. Likewise, none is adequately planning for a world free from carbon pollution, as laid out by the international climate agreement expected to take effect this year.
The “Climate Accountability Scorecard: Ranking Major Fossil Fuel Companies on Deception, Disclosure, and Climate Action” used 30 metrics to examine Arch Coal, BP, Chevron, ConocoPhillips, CONSOL Energy, ExxonMobil, Peabody Energy and Royal Dutch Shell. The top score, “advanced,” reflected best practices. “Egregious” was the lowest score, indicating a corporation was acting very irresponsibly. No company scored better than the others in all categories, and several were relative leaders in some areas and laggards in others.
“Across the board, these eight companies continue to disparage the science and undermine the urgency of action—either directly or through the trade associations and industry groups they support,” said Kathy Mulvey, lead author of the report and Climate Accountability Campaign manager at UCS. “In the wake of numerous exposÃ©s that revealed companies’ records of working to deceive the public about global warming, many of the companies now insist that they no longer promote denial and accept the reality of climate change. This study belies those claims.” The analysis revealed:
- Only two of the eight companies (BP and Shell) consistently affirm in their direct public statements the legitimacy of climate science and the consequential need for swift and deep reductions in fossil fuel emissions. Shell received a score of “advanced;” BP scored “good.” At the opposite end of the spectrum, ExxonMobil scored “egregious” for its climate science statements after CEO Rex Tillerson cast doubt on the accuracy and competency of climate models as recently as this year.
- All eight companies belong to key trade associations or industry groups that spread disinformation and seek to block climate action. All five oil companies in the study are members of the Western States Petroleum Association (WSPA), a trade group that used misleading claims and scare tactics as part of a multi-million dollar campaign to block key provisions of a clean energy bill enacted in California. Yet several of these companies have proven that they can distance themselves from industry groups that misrepresent climate science. BP, ConocoPhillips and Shell have left the American Legislative Exchange Council, with Shell stating that it disagreed with the lobby group’s climate denial and opposition to climate action.
- Only half of the companies have begun to disclose climate risks to investors. Four companies scored “fair” (BP, Chevron, ConocoPhillips and CONSOL Energy) and four companies scored “poor” (Arch Coal, ExxonMobil, Peabody Energy and Shell).
- Two companies were found to be “good” (BP and ConocoPhillips) in supporting fair and effective climate policies, a category that takes into consideration companies’ disclosure, policies, and oversight related to political spending in general.Three companies were “fair” and three “poor” (Arch Coal, CONSOL Energy, and Peabody Energy).
- Seven out of eight companies have not begun to plan for a world free from carbon pollution, even since countries worldwide committed to ambitious targets to reduce emissions in the international climate agreement reached in Paris last December. Shell received a “fair” ranking; all other companies ranked “poor” (BP, Chevron, ConocoPhillips and ExxonMobil) or “egregious” (Arch Coal, CONSOL Energy and Peabody Energy).
The study comes at a time when fossil fuel companies are facing increased scrutiny and pressure. At least two state attorneys general are investigating whether ExxonMobil intentionally misled its shareholders and the public about the threat of climate change, and the U.S. Securities and Exchange Commission is investigating how the company has valued its oil reserves in anticipation of potential carbon emission cuts. Meanwhile, shareholders at five of the eight companies filed resolutions related to climate change this year.
“Now that the nations of the world have committed to address climate change, investors and policy makers need information about how all companies are reducing their climate impacts and managing their climate risks—including the physical, regulatory, and market risks that climate change poses to their businesses,” said Paul Dickinson, Co-founder and Executive Chair of CDP. “Reports and analyses such as this one are a vital resource for decision makers, including the senior leadership of major fossil fuel companies.”
In addition to calling for disclosure of climate risks that could affect companies’ bottom lines, investors also want to know whether companies continue to fund climate disinformation. The report highlights just how much further these companies need to go to disavow their decades-long efforts to confuse the public about the realities and risks of climate change and block policies to address it—work that continues today. Since 1988—after major fossil fuel companies unequivocally should have known about the risks of their products—more than half of all industrial carbon emissions have been released into the atmosphere. The products of the eight companies analyzed are responsible for nearly 15 percent of industrial carbon emissions since 1850.
“It’s time for these major corporations to steer their companies and trade groups away from denying climate change and toward engaging constructively in policy discussions,” said Mulvey. “To evolve as energy companies, they must align their businesses with the Paris Agreement goals and help keep the global temperature increase well below two degrees Celsius.”
The report calls on major fossil fuel producers to accept their role in contributing to the problem of climate change and take action in several areas:
- Stop spreading or supporting the spread of disinformation on climate science and policy: The corporations should leave groups that spread disinformation or publicly distance themselves from those groups’ climate-related positions.
- Fully disclose climate risks: The corporations should disclose how climate change is putting at risk their infrastructure, reserve assets and future profits.
- Plan for a world free from carbon pollution: The corporations should align their business models with a carbon-constrained world consistent with the international climate agreement’s goal of keeping the globe’s average temperature well below a 2 degrees Celsius increase above pre-industrial levels.
- Support fair and effective climate policies: The corporations should consistently and actively advocate for fair and effective state, federal and international policies to reduce global warming.
- Pay their share of climate costs. No fossil fuel company has even begun to pay its share of the costs of climate damages and adaptation, so the report did not assess company performance or make specific recommendations in this area.