Green Asia

China oil majors improve ESG reporting, but lag peers, research finds


BEIJING : China’s Hong Kong-listed oil companies have improved their ESG reporting under international regulatory and investor pressure, but they lag foreign peers, research showed on Wednesday.

State oil giants Sinopec, PetroChina and CNOOC have set peak carbon emissions targets for between 2025 and 2030, and aim for carbon neutrality by 2050, in line with Beijing’s 2020 pledge to achieve peak emissions by 2030 and carbon neutrality by 2060.

However, China’s state oil giants have yet to publish any concrete detail on their planned actions, the report by the Center on Global Energy Policy at Columbia University (CGEP) found.

Erica Downs, senior research scholar at CGEP, said the companies were using ESG reports “to let international investors know that they are at least acknowledging – if not acting upon – issues of importance to them”.

Sinopec, PetroChina and CNOOC did not immediately respond to Reuters’ requests for comment.

The report’s publication comes a day ahead of COP28 U.N. climate talks in Dubai, which will confront divisions over the future role of the fossil fuel industry given the urgent need to reduce carbon emissions.

Across the world, energy companies have faced conflicting pressures as some shareholders seek the returns promised by oil and gas, given high energy prices, while other investors demand climate action, as do regulators.

The Hong Kong Stock Exchange’s (HKEX) “comply or explain” provisions mean the listed arms of the state giants must disclose emissions volumes, as well as climate risks and countermeasures.

The CGEP report said international investor pressure, as well as the Chinese government’s climate goals had also helped to improve reporting.

Upstream-focused CNOOC Ltd plans a 10-18 per cent reduction in emissions intensity by 2025 from 2021, the company said in 2022. By comparison, U.S. major Exxon Mobil Corp targets a 40-50 per cent reduction in upstream emissions intensity by 2030 versus 2016.

Sinopec reported combined direct and indirect emissions of 161.8 million metric tons of CO2-equivalent last year, while PetroChina reported 160.6 million tons CO2-equivalent, according to their exchange disclosures. That represented a 6.2 per cent reduction from 2021 levels for Sinopec, though PetroChina’s emissions ticked up 0.6 per cent.

Global majors, such as Shell and TotalEnergies, have announced more ambitious targets. Total aims for a 40 per cent reduction in net emissions by 2030 versus 2015, while Shell aims to halve emissions from its own operations on an absolute basis by 2030 versus 2016.


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