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Over seven tenths of the world's greenhouse gas emissions has come from just 100 companies since 1988, according to a new report from the Carbon Disclosure Project.
A report from the Carbon Disclosure Project (CDP) – a UK-based organisation which works with shareholders and corporations to disclose major corporations’ emissions – has found that more than half of global industrial emissions since 1988 can be traced to just 25 corporate and state-owned entities. While in 1988, the Intergovernmental Panel on Climate Change was established, the scale of historical emissions associated with these fossil fuel producers is large enough to have continued to contribute significantly to climate change.
The paper from CDP argues that it therefore follows that the actions of these producers over the medium-long term “can, and should” play a pivotal role in the global energy transition. Directly or indirectly, these companies are most affected by the prospect of climate change regulation, which presents myriad risks and opportunities to their future prosperity.
ExxonMobil, Shell, BP and Chevron are identified as among the highest emitting investor-owned companies since 1988 meanwhile, and the CDP project that unless fossil fuel extraction slows over the next 28 years, global average temperatures would be on course to rise by 4C by the end of the century, well above target temperatures established by the much heralded Paris climate accord. This is likely to have catastrophic consequences including substantial species extinction and global food scarcity risks. Recent data has suggested that peak energy demand may have been reached, and the plateau in the very most recent years of fossil fuel extraction suggest this is being felt in the energy production industry – however, these levels would need to drop to avoid such a global catastrophe occurring more rapidly.
Beyond this, the study also shows that the full 100 companies they examined were the cause of 71% of global greenhouse emissions. Of the 635 GtCO2e of operational and product GHG emissions from the 100 active fossil fuel producers, 32% is public investor-owned, 9% is private investor-owned, and 59% is state-owned – suggesting governments have a major role to play in cracking down on fossil fuel excesses as well.
Traditionally, large scale greenhouse gas emissions data is collected at a national level but this report focuses on fossil fuel producers – allowing for a global overview of the state of play. Compiled from a database of publicly available emissions figures, the report is intended as the first in a series of publications to highlight the role companies and their investors could play in tackling climate change.
A 2016 report from consulting firm PwC found that efforts to curb greenhouse gas emissions have improved significantly last year, relative to the prevailing average, with carbon intensity falling by -2.8%. To meet the target of the Paris Agreement, however, the world will need to step up its efforts to reduce emissions. CDP meanwhile states that its aims with the carbon majors project are both to improve transparency among fossil fuel producers and to help investors understand the emissions associated with their fossil fuel holdings.
A fifth of global industrial greenhouse gas emissions are backed by public investment, according to the report. This is perhaps best illustrated by the Chinese coal industry, which in spite of its detrimental effects to climate change, has been a continued area of state investment due to its short-term profitability. Since the turn of the millennium, growth in Chinese coal production has tripled to nearly 4 billion tonnes, representing half of global output. Coal production in China is broken down into state-owned industry groups, which may partially own one or a number of listed subsidiaries, and according to the Chinese-based data service company sxcoal, production from the top 50 coal company groups in 2015 amounted to 71% of national production – meaning that despite the jeopardising of climate goals by the industry, the government continues to see it as a key asset.
The Carbon Majors Report “pinpoints how a relatively small set of fossil fuel producers may hold the key to systemic change on carbon emissions,” according to Pedro Faria, technical director at environmental non-profit CDP, which published the report in collaboration with the Climate Accountability Institute. While the benefits of helping to avoid an international, irreversible climate catastrophe might seem self-evident though, within companies who have played and continue to play huge role in driving climate change, Farrier claimed a barrier existed, as “absolute tension” between short-term profitability and the urgent need to reduce emissions meant many remained reluctant to sacrifice economic growth for ecological security.
Investors should move out of fossil fuels, according to Michael Brune, executive director of US environmental organisation the Sierra Club. “Not only is it morally risky, it’s economically risky. The world is moving away from fossil fuels towards clean energy and is doing so at an accelerated pace. Those left holding investments in fossil fuel companies will find their investments becoming more and more risky over time.”
Related: Global CO2 emissions and the 20 most polluting countries in the world.
