- Chevron set a target to reduce the carbon intensity of its operations and products (Scope 1,2, and 3) by 5% by 2028
- Thanks to 61% of investors’ votes for the Follow This climate resolution, Chevron set a Scope 3 target
- Chevron’s target falls short of Paris-alignment
- Follow This: “5% is disappointing tokenism” (40% by 2030 is needed)
- Chevron aspires net zero by 2050 for operations (Scope 1 and 2) – “like a tobacco firm that promises to quit smoking, while continuing to produce cigarettes”
Chevron is the second US oil major to respond to a climate resolution # by setting an emission reduction target for its products (so-called Scope 3 emissions), the company announced today. Chevron set a target to reduce the carbon intensity of its products (Scope 3) by 5% by 2028*.
“Chevron is merely interested in appeasing shareholders, a 5% intensity target is a snub to investors who are truly committed to reaching the Paris agreement,” said Mark van Baal, founder of shareholder group Follow This that filed the climate resolution # at Chevron.
The scientific consensus is clear: the world needs to reduce absolute emission by around 40% by 2030 to have any chance to achieve the Paris Accord. Until Chevron’s targets reflect this fact, their strategy falls short of Paris-alignment. 5% is disappointing tokenism, not a serious attempt to confront the climate crisis.”
Thanks to 61% votes for Follow This climate resolution
“After years of fruitless engagement, Chevron’s response shows that engagement only works in combination with voting for clear-cut climate resolutions.”
Scope 3 U-turn
Follow This welcomes Chevron’s crucial U-turn on Scope 3. “It is a crucial step to include Scope 3, because product emissions are the elephant in the room (up to 90% of emissions). Until now, Chevron refused to discuss them.”
At the AGM in May, Chevron advised shareholders to vote against the Follow This climate proposal, stating that “Chevronʼs actions [..] are appropriate.” (item 4, page 82). Nevertheless, 61% of the shareholders defied board advice and voted in favor of the climate proposal.
A familiar pattern
We recognise this pattern: European peers Shell, BP, and Equinor also advised shareholders to vote against the Follow This resolution requesting Scope 3 targets, and also reluctantly set intensity targets for Scope 3 when a growing group of investors made it evident that they would not accept less.
No absolute emission reduction targets for 2030
The similarities continue: like its European peers, Chevron still plans to grow their fossil fuels production and sales. As a result, they will increase absolute emissions by 2030, which is in direct contempt with all efforts to achieve the goals set out in the Paris Accord. According to the IPCC’s Sixth Assessment Report (2021) and the IEA Net Zero by 2050 Roadmap (2020) the world needs to achieve absolute emission reductions of around 40% by 2030 to confront the climate crisis.
The recent IPCC report couldn’t be clearer: unless there are “immediate, rapid, large-scale reductions in greenhouse gases”, global temperature rise will not be limited to 1.5°C. There is no room for fossil fuel growth in a livable world.
Net zero by 2050, tobacco firm
Chevron aspires to be “net zero by 2050 for upstream Scope 1 and 2 emissions.” (emissions from operations)
“Chevron is like a tobacco firm that promises to quit smoking, while continuing to produce cigarettes,” responds Follow This. Product emissions (Scope 3) are up to 90% of all emissions of an oil major.
Engagement and voting
We value engagement with all oil majors that we file resolutions at in order to support them to advance their climate strategy. We were disappointed to discover that all oil majors that we engaged with this year fail to recognise the urgency or necessity of reducing their emissions this decade. Oil companies accept the fact that emissions must be reduced by 40% by 2030, yet maintain that this responsibility falls to anyone other than themselves.
Given this lack of urgency, investors must continue to be crystal clear in their communication with oil majors: “Unless there are immediate, rapid, large-scale reductions in greenhouse gases, limiting global temp to 1.5 will be beyond reach” (recent IPCC report again). This is a message that should be emphasised during engagement and through voting practices at AGMs.
# The climate proposal that received 61% of the votes, requested “the Company to substantially reduce the greenhouse gas (GHG) emissions of their energy products (Scope 3) in the medium- and long-term future” full text.
* compared to 2016, the so-called portfolio carbon intensity (PCI) for 2028 is 71 g CO2e/MJ, a > 5 percent decrease from 2016. To achieve Paris, the world needs an absolute reduction of around 40% by 2030.