Investors get lost in Big Oil's carbon accounting maze

LONDON: Wide variations in the way oil companies report their efforts to reduce carbon emissions make it difficult to assess the risk of holding their shares as the world shifts away from fossil fuels, senior fund managers say.

"Do investors have the data that we need? No, I don't think we have the data that we need at all," said Nick Stansbury, investment strategist at British insurer Legal & General's investment management unit, Britain's biggest asset manager with around US$1.3 trillion under management."Disclosure is not necessarily so we can seek to change the numbers, but so we can start understanding and pricing the risks," Stansbury said.

BP Finance Chief Brian Gilvary told Reuters BP would welcome more consistency within the sector to show what oil companies are doing about emissions and that an industry body, the Oil and Gas Climate Initiative , was discussing carbon accounting. "We don't want to be accused of greenwashing or falling for it," he said, adding that UBS regularly encouraged companies to prepare for the climate transition.

To try to answer that question, the world's biggest financial service providers are investing in companies which provide ESG-related data. Even if a company publishes Scope 3 data, there are 15 different categories based on the Greenhouse Gas Protocol. These include use of sold products such as fuel alongside secondary factors such as business travel or employee commuting.

They showed combined Scope 3 emissions recorded by BP, Royal Dutch Shell, Exxon Mobil, ConocoPhillips', Chevron, Eni, Total, Equinor and Repsol rose around 1.6per cent over 2018, after a 1per cent similar rise the previous year.

Source: News Formal (newsformal.com)

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