Oil Majors’ Stalled Transition: COP28 Spotlight

In a world seeking solutions to its climate challenges, the United Nations Climate Change Conference (COP 28) will bring 2023, a year marked by record temperatures, to a close. Accordingly, major oil companies have recently made ambitious announcements concerning their commitment to the energy transition. Behind these statements, however, lies the crucial question of trust and transparency: is this a genuine commitment to the transition, or merely a communications strategy? To address this uncertainty, impak Analytics has analyzed the 6 oil supermajors: ExxonMobil, BP, TotalEnergies, Chevron, Shell, and Eni. This study takes an in-depth look at their concrete actions, their investments in renewable energies, their policies, and the effectiveness of their approaches to the energy transition.

The first conclusion of our study is evident: the negative impacts of the activities of these multinationals and their subcontractors are indisputable and always greater than their positive impacts, which remain marginal at best. In fact, these activities represent just a tiny fraction of the companies’ business models. For example, TotalEnergies makes a modest contribution to the Sustainable Development Goals (SDGs), amounting to just 1.3% of its sales.

There is, however, a light at the end of the pipeline. Some companies have made brilliant transitions, such as Orsted, a prime example in our study. This company, which used to operate in the oil sector, has transformed itself to become a giant in the renewable energies sector. 

Let’s not forget to mention the great absentees from the climate debate: the state-owned oil companies. Their strategies remain unclear and incomplete. This highlights an interesting point with COP 28, which will be chaired by the CEO of the Abu Dhabi National Oil Company (ADNOC), the national oil company of the United Arab Emirates. It seems that states wield a transformative power that nobody really talks about. While the climate strategies of private companies are often singled out (and rightly so), state-owned enterprises don’t seem particularly interested in reducing their carbon footprint.