Climate Change and Oil and Gas Industry Challenges
By Elianne Omena (Principal Partner Environment)
The recent report by the IPCC (Intergovernmental Panel on Climate Change) warns that if actions to minimize the impacts of climate change are not applied immediately, and if emissions reductions do not occur on a large scale, it will be difficult to reach the goal of limiting warming global at 1.5°C or even at 2°C. In this context, it is expected that global warming will continue leading not only to an increase in the planet's temperature, but also to changes in the rainfall regime, in the rise in ocean levels and in the melting of ice in the polar caps. The impacts resulting from climate change put life on Earth at risk, at least as we know it today, and bring harm to health, society and economy.
Responsible for 35% of carbon dioxide emissions, oil companies have been changing their strategic vision towards energy transition and sustainable development. The main ambitions are related to commitments to minimize greenhouse gas emissions, increase carbon capture and storage, in addition to seeking innovations to deal with Scope 3 emissions and research into new energy sources.
Still, a recent court ruling wants to force Shell to be much more ambitious in its transition to a low-carbon economy. Accused by a Dutch environmental organization of threatening human rights through its unbalanced production of fossil fuels, the multinational oil company will have to reduce its emissions by 45% by the end of the decade. The decision is a milestone because, for the first time, a company is required to align itself with the Paris Agreement. This unprecedented and unprecedented action has the potential to impact oil companies around the world.
Likewise, pressure from investors has increased for companies to establish targets and plans for decarbonization. ExxonMobil has been losing seats on its board to leaders advocating the transition to cleaner energy. At Chevron, another major US oil company, 61% of shareholders voted in favor of a proposal for the company to reduce Scope 3 carbon emissions generated by consumers in fuel use. The board had recommended that investors reject the proposal.
In its 2021-2024 strategic plan, the Global Oil and Gas Industry Association for Environmental and Social Performance (IPIECA) highlighted that the energy transition and sustainable development goals (SDGs) are key issues for the future of the sector.
Strategies to achieve these sustainable goals in the O&G industry are based on 4 main axes: climate, nature, people and sustainability.
Discovering how we will go about meeting energy needs in a world transitioning to low-carbon sources is the key to sustainable development. The oil and gas industry, as a leader in the global economy, plays a key role in solving these challenges.
Sustainable Development Goals (SDGs) prioritized by Petrobras (Sustainability Report, 2020)
Fontes de Referência:
IPECA, 2020. Sustainability reporting guidance for the oil and gas industry. 4th Edition. 212 pp
IPECA,2021. IPIECA 2021-2024 strategy. Advancing environmental and social performance. 7pp.
RESET NEWS, 2021. https://www.capitalreset.com/justica-manda-shell-cortar-emissoes-de-co2-para-se-alinhar-ao-acordo-de-paris/
PETROBRAS, 2021. Relatório de Sustentabilidade 2020. 347 pp.