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Oil CEOs at Davos Debate Tougher CO2 Cuts as Pressure Mounts


By Javier Blas

(Bloomberg) The bosses of some of the world’s biggest oil companies discussed adopting much more ambitious carbon targets at a closed-door meeting in Davos, a sign of how much pressure they’re under from activists and investors to address climate change.

The meeting, part of a World Economic Forum dominated by climate issues, included a debate on widening the industry’s target to include reductions in emissions from the fuels they sell, not just the greenhouse gases produced by their own operations, people familiar with the matter said on Wednesday.

The talks between the chief executive officers of companies including Royal Dutch Shell Plc, Chevron Corp., Total SA, Saudi Aramco, Equinor ASA and BP Plc showed broad agreement on the need to move toward this broader definition, known as Scope 3, the people said, asking not to be named because the session was closed to the press. The executives didn’t take any final decisions.

Shell declined to comment. Media representatives for Chevron, Total, Aramco and BP weren’t immediately able to respond to requests for comment. Equinor confirmed its CEO Eldar Saetre attended the meeting.

Climate Focus

Targeting Scope 3 emissions would be a big shift for an industry that produces the bulk of the world’s planet-warming emissions, once that could eventually require them to sell far less oil and gas. The simple fact that the industry’s top executives were considering it underscored how climate concerns suddenly came into focus in Davos this year.

For the first time, environmental risks occupied the WEF’s top five long-term concerns. Business leaders from BlackRock Inc. CEO Larry Fink to Allianz SE boss Oliver Baete used their platform at the event to focus on sustainable investment. The two highest-profile attendees at the forum — President Donald Trump and climate activist Greta Thunberg — made headlines as they staked out opposing positions on the issue.

Several companies have already pledged reductions in Scope 1 and 2 greenhouse gases, which come directly from pumping and refining hydrocarbons. Yet these account for less than 10% of total emissions from the life cycle of oil and gas, so preventing a damaging increase in global temperatures requires action that goes much further.

The executives debated a document produced by the World Economic Forum on “neutralizing emissions at the pump,” a reference to the gasoline and diesel sold to customers. There’s an urgent need to shift the industry’s target from oil production to emissions from end users, said one person.

Among major energy groups, only Shell, Total and Madrid-based Repsol SA have publicly announced that they are either targeting or monitoring Scope 3 emissions.

The Spanish company made the boldest move, promising net-zero emissions in 2050 by diverting investment into wind and solar power. Shell has taken more modest steps, pledging to offset the greenhouse gases produced by fuel sold to drivers on their loyalty-card programs in the U.K. and Netherlands.

Other companies, notably U.S. majors Exxon Mobil Corp. and Chevron have so far resisted specific pledges to cut total emissions, with the latter focusing instead on the carbon intensity of the energy it produces. BP CEO Bob Dudley, who retires later this year, has agreed targets for Scope 1 and 2 gases but opposed a Scope 3 target.

Eni SpA Chairman Emma Marcegaglia said in a Bloomberg TV interview that the company is committed to becoming carbon neutral on a Scope 1 and 2 basis by 2030. The Italian oil and gas giant is in discussions about Scope 3 emissions, but needs more guidance from the government on how to do so, she said.

“We’ll look at all our different sectors and how to make them close to carbon-neutral,” Marcegaglia said. “But also keeping our capacity to make cash flow.”



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