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Oil majors message is green but spend remains high carbon

© Shutterstock / Red ivoryOil and gas operations.

The latest research from think tank Influence Map highlights the disconnect between oil major green rhetoric and their anti-climate actions on the ground.

Oil majors talk a green game but operational investments and lobbying tell a different story.

Expenditure on climate-related messaging is high, spend on renewables and low carbon is relatively small.

As the messaging disconnect widens, such companies open themselves to reputational and liability risk.

According to Faye Holder, who authored UK think-tank Influence Map’s Big Oil’s Real Agenda on Climate Change, 2022, the report shows that big oil is engaging in a systematic campaign to portray themselves as ‘green’. But the money they’re spending is on communications, not on renewables.

There has been a significant increase in recent years in the amount of messaging oil majors use for the public – 60% of their messaging in 2021 contained at least one green claim. such as commitment to climate solutions, net zero or climate reduction. Given the fact that oil and gas is their core business, it’s worth noting that only 23% of their messaging touches upon that.

Interestingly only 6% of claims referred to natural gas as a climate solution in their messaging to the public. Yet the question of gas as a climate solution came up frequently in terms of consultation responses, and in interactions with policymakers or lobbying.  And it’s this disconnect that is of particular concern.

Disconnect between messaging and investment

There is a big gap between the presentation that these companies make and their expenditure. The report conservatively estimated that these five companies combined spent at least $750 million on climate-related messaging (including both ‘green’ claims and pro-oil messaging) during 2021, although the real figure is likely to be significantly higher because this calculation does not include the cost of external advertising or PR agencies.

Relatively small amounts of money have actually been invested in ‘green’ activities – the report shows that the companies in question are only spending 12% of their capex budgets on low-carbon investment. Furthermore, some of these ‘low carbon’ activities are likely to include fossil fuel investments, given both TotalEnergies and Shell include fossil gas-related investments in their ‘low carbon’ CAPEX outlook.

The situation in terms of spending certainly hasn’t improved in 2022. In the first half of 2022 BP, Shell, Equinor and Total Energies reported $74 billion in profit but only 5% of equivalent funds were invested in renewables or low carbon projects.

Holder said: “These companies talk about cutting emissions and transitioning the energy mix, but at the same time continue to invest heavily in new fossil fuels. “While this PR strategy might convince some people, it doesn’t change the fact that these companies are out-of-step with science-based pathways to net zero.”

She explained that overall the report analysed nearly 3,500 pieces of messaging from BP, Shell, Chevron, ExxonMobil and TotalEnergies. This included company and CEO social media accounts, press releases, speeches, and secondary websites intended for outreach purposes.

Are oil and gas companies greenwashing?

This contrasted with how each of the companies, with the exception of TotalEnergies, have engaged policymakers directly to advocate for policies encouraging the development of new oil and gas in 2021-22.

From advocating broadening the EU’s Renewable Energy Directive to include ‘low-carbon fuels’ and filing lawsuits for a ban on new fracking to lobbying against the EU’s proposed methane regulation and advocating for measures to promote new oil and gas development in the Gulf of Mexico.

To date, none of the companies assessed has aligned their climate policy engagement activities with the goals of the Paris Agreement. Shell, TotalEnergies, and BP are ranked at C in terms of their engagement, which ExxonMobil and Chevron qualify as a D, indicating opposition to Paris-aligned climate policy.

So what did the oil companies communicate?

ExxonMobil focused most of its public messaging on emissions reductions, suggesting its strategy is to present itself as a ‘low emission’ oil and gas producer – 65% of its public messages contain at least one ‘green’ claim, and only 8% being redirected to low carbon activities.

Chevron used more pro-oil and gas messages than any of its competitors, with only 49% of its public messages containing at least one ‘green’ claim and 5% being redirected to low-carbon activities.

All (except for TotalEnergies) are members of the American Petroleum Institute (API), the Australian Petroleum Production & Exploration Association (APPEA) and the Canadian Association of Petroleum Producers (CAPP) which score ‘F’ and ‘E+’ in terms of their opposition to climate-related regulation.

Of course, this hasn’t gone unnoticed in the world of climate litigation. All the companies Influence Map review are facing lawsuits on the basis of consumer fraud. Many are slow moving, with arguments about whether they should take place at federal or state level, but the question is one of misrepresentation.

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