May 28, 2020 - Energy & Environment

The end of the beginning on energy companies' net-zero carbon pledges

Illustration of a group of oil barrels with one in the right top corner being highlighted green
Illustration: Rebecca Zisser/Axios

Activist investors' push to make the world's largest energy companies commit to ambitious climate targets is entering a new phase.

Why it matters: A key thing to watch now is whether and how energy giants start providing more granular information on how to transform the pledges into concrete steps.

  • Thus far, while there have been varying levels of specifics, there remain very large blanks to fill in across the board, even as "net-zero" is the coin of the realm for European headquartered multinational oil giants (though resisted by U.S.-based majors ExxonMobil and Chevron).

Driving the news: Power giant Southern Company yesterday pledged to reach net-zero emissions by mid-century, joining a bunch of other big utilities who made similar vows over the past year or so.

  • The move came the same day that BP officials, at their annual meeting, said the COVID-19 pandemic would not alter the wide-ranging climate plans the company rolled out in February.

The big picture: "[P]ressing for more detail on how these plans will be implemented is definitely the next step at all of these companies," says Andrew Logan of the sustainable investment advocacy group Ceres.

  • "There is particular concern about whether the near-term goals companies have set are ambitious enough to actually get them to the 2050 goals without having to assume some miraculous development on the technology front," says Logan, whose work is focused on oil companies.
  • And check out yesterday's statement from investors affiliated with the Climate Action 100+ network, which welcomes BP's steps but calls for more clarity on how they'll start getting there in the near- and medium-term.

What they're saying: Advocates similarly called for specifics from Southern Company — which has a power mix heavily reliant on gas and coal — even as they praised the new goal.

  • Lila Holzman of the shareholder advocacy group As You Sow says they "look forward to more clarity on how it will achieve this new target, especially with regard to its large natural gas fleet."

Flashback: Axios' Amy Harder recently looked at Duke Energy's plan, which provides some specifics but also "relies heavily on a vague bucket of low-carbon technologies that aren’t commercially viable yet."

What's next: BP is planning to unveil details of its plan in September.

  • "I think that BP's September announcement — assuming it is sufficiently detailed — will lead to some pointed questions and hopefully some more detailed plans from BP's peers," Logan adds.

Go deeper: Big Oil's "net zero" club grows

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