Total best placed as European oil giants lead 'patchy' fossil transition: Bloomberg
French group leads on combined rankings as Europeans dominate and sector as a whole deemed 'far from ready'
Total is the global oil & gas giant best positioned for a transition to a low-carbon world – but the fossil sector as a whole is still “far from ready” for the change that’s coming, according to new rankings from business intelligence group Bloomberg.
The French supermajor led a group of five European oil & gas players that topped Bloomberg’s new Climate Transition Scores, with Galp, Equinor, BP and Shell making up the rest. Between them the five own 11GW of renewable energy assets, 78% of the total held by the entire list of 39 ranked by Bloomberg researchers.
The overall rankings combine two separate measures – carbon transition and business model transition scores – compiled by Bloomberg Intelligence and Bloomberg New Energy Finance.
Bloomberg does not name the worst-ranking oil & gas groups in a media statement announcing the launch of the rankings to its terminal subscribers, but the top 10 is mostly packed with Europeans and there is no sign of US supermajors ExxonMobil, Chevron and ConocoPhilips, which are widely seen as lagging their transatlantic peers.
While Total topped the combined list, Shell came out first in the business model stakes thanks to its “aggressive transition activities and a relatively resilient fossil fuel business”.
However, while the top performers are well placed when benchmarked against their oil & gas peers, Bloomberg said the sector as a whole has a long way to go to address the challenges of decarbonisation and the energy transition – and all the companies tracked still direct the majority of their Capex to fossil activities.
Jonas Rooze, head of sustainability research at BloombergNEF, said: “When it comes to deploying low-carbon technologies, these companies do a lot of marketing, but their disclosure is limited and patchy.”
Bloomberg Intelligence claimed its carbon transition analysis – which looks at current and projected carbon intensity – shows the inconsistent nature of the sector’s commitments.
It found only seven of the 39 companies, including Eni, Total, Equinor and Occidental, have set targets putting them in line by 2030 with the International Energy Agency's (IEA) Sustainable Development Scenario (SDS).
Eric Kane, head of ESG research, Americas, at Bloomberg Intelligence said: “As investor pressure, regulatory action and shifts in demand push oil and gas companies to reduce their greenhouse gas emissions, two distinct camps have emerged.
“One third of the 39 oil and gas majors that we analysed have yet to set targets to reduce their Scope 1 and 2 emissions. And more than half don’t even report their Scope 3 greenhouse gas emissions – 85% of the total footprint for the average company. For the other group, transition strategies are increasingly ambitious, with leaders aiming for net zero.”
The green credentials or otherwise of oil & gas players – several of which are becoming globally significant investors in renewables such as offshore wind and solar – is a regular matter of contention.