ConocoPhillips rejects customer emissions goal despite vote

Rig in Eagle Ford Source: ConocoPhillips

ConocoPhillips doesn’t expect to set a target to cut its customers’ emissions, even though investors voted for one at the oil producer’s annual meeting last year. 

The Houston-based company has “engaged very extensively” with shareholders about so-called Scope 3 emissions since the meeting, executive vice president Dominic Macklon said Wednesday on a call with analysts. “Our stockholders, with very few exceptions, did not express an expectation for ConocoPhillips” to set a Scope 3 goal, given that the company is an oil driller that doesn’t own refineries or gas stations. 

Like ConocoPhillips, most U.S. oil producers, including Exxon Mobil Corp. and Chevron Corp., have ambitions to zero out their own emissions from producing fossil fuels, but haven’t added customers’ pollution to those plans. End users – who make up the bulk of the oil industry’s emissions – are responsible for curbing that pollution, so the argument goes. That’s in contrast to the European oil giants, all of which have Scope 3 targets. 

Shareholders recognized that for ConocoPhillips to set such a target would only serve to shift production to “less accountable sources” that may not be aligned with the Paris Agreement on climate, Macklon said. They’re in favour of the company’s ambition to zero out its own emissions and those from the power it uses and support its $200 million of spending this year to reduce its carbon footprint, he said. 

ConocoPhillips reported 16.2 million metric tonnes of Scope 1 and 2 greenhouse gas emissions in the fiscal year 2020, compared with 115 million from larger rival Exxon, data compiled by Bloomberg show. 

ESG Scores

  • ConocoPhillips’ Bloomberg ESG scores, which are based on a scale of 0 to 10, show that the company has an environmental score of 4.68 and is ahead of 91 per cent of its peers.
  • Its Sustainalytics Risk Score fell to 34.87 from 35.98 six months ago. Sustainalytics measures unmanaged financially material environmental, social and governance risks, so a lower score is better. The company’s Bloomberg peer group has an average score of 34.87.
  • Its MSCI ESG rating, ranking ESG business practices from a top AAA to a worst CCC, is A.
  • The company’s S&P Global ESG Rank, which looks at how companies are mitigating ESG risks, is 85 out of 100. The Bloomberg peer group average is 55.00.
  • Its CDP Integrated Performance Score, measuring commitment to controlling climate change in a 1-8 ranking, is 6.00, versus 3.25 for the Bloomberg peer group.

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