United Nations Secretary-General António Guterres speaks during the World Climate Action Summit at COP28 on Friday. (Image: Stuart Wilson/COP28 via Flickr)
Central to the climate challenge is the urgent need to address the role of the oil industry and its rising emissions of greenhouse gases and short-lived climate pollutants. The global COP28 climate talks are a key moment for the oil sector to reassess its trajectory and acknowledge that a transition to cleaner energy sources is not just desirable but a financial and economic imperative — and that ultimately a zero emissions future is one that requires a phaseout of unabated fossil fuels.
The industry needs to demonstrate ambition on two fronts: it needs to decarbonize its own operations on a rapid timescale, and it also needs to reckon with the unavoidable truth that, ultimately, it is the burning of fossil fuels that is driving the climate crisis.
Many of the world's biggest oil companies took a step forward in responding to this call with a pledge at the start of COP to reduce methane emissions to near zero by 2030. This is an important step that represents a positive move by the industry toward a larger transition strategy. Still, while slashing methane, a potent greenhouse gas that significantly speeds up global warming, is a necessary move, it only addresses a fraction of the risk the economy and planet faces. Oil and gas companies have to do much more.
There is a particular need to see national oil companies (NOCs) step up their leadership. While these state-controlled companies often get less attention than the ExxonMobils of the world, they produce the majority of the world’s oil, as well as outsized amounts of pollution. The leakiest NOCs can release methane at 100 times the rate of a well-performing investor-owned oil company.
Additionally, fossil fuel producers must set science-aligned, net-zero targets. This means, at a minimum, zeroing out emissions from their direct operations on a short-time horizon — well before 2030. A 2023 report from the International Energy Agency outlines cost-effective strategies the industry can take to zero out methane emissions, from replacing old equipment to better detection of leaks. They should also develop and, in the interest of transparency, publish comprehensive transition plans outlining short- and long-term steps to decarbonize business operations, products and services.
As part of these transition plans, companies need to include increasing capital expenditures to invest in technologies like clean energy to the point that it represents a majority of what they spend. These commitments, which Ceres advocates for across six of the highest-emitting sectors, are vital to halving greenhouse gas emissions by 2030 and propelling us toward a net-zero global energy economy.
At COP28, hundreds of institutional investors and major companies are calling for change in the oil and gas industry. More than 600 investors with more than $42 trillion in assets under management have called for policies to support a phaseout of fossil fuels. More than 200 companies, collectively generating more than $1.5 trillion in global annual revenue, also came out in support of a fossil fuel phaseout and a faster transition to clean energy.
This united front of investors and companies underscores the wide-ranging support for an impactful agreement at COP28. They're advocating not only for the phased elimination of fossil fuel usage in line with the push to cap global temperature rise at 1.5 degrees Celsius above pre-industrial levels, but also for ambitious targets to triple renewable energy capacity and double energy-efficiency rates by 2030.
Recent events also underscore the urgency of increased climate action. COP28 kicked off shortly after the release of a new National Climate Assessment, which found that the U.S. alone has experienced a staggering increase in billion-dollar weather and climate disasters, costing at least $150 billion annually. With global emissions and temperatures rising, these figures will only climb, further negatively impacting economic growth and compounding societal costs.
The United Nations' first global stocktake report, released in September, also illustrates a stark reality that the world is off track to meet the goals of the Paris Agreement.
COP28 comes as a moment of profound reckoning and potential transformation awaits us on the global stage. In the pursuit of a net-zero economy and world, the oil industry's commitment to this urgent clarion call from investors will be a barometer for the success of COP28 and our collective ability to confront the climate crisis.
Andrew Logan is the senior director of the oil and gas program at the sustainability nonprofit Ceres. Since joining Ceres in 2002, Logan has worked with investors to engage the oil and gas sector on key sustainability issues including climate change, carbon asset risk, biodiversity and water.