The Carbon Tracker Initiative report
(sustainabilityenvironment.com) – The world’s largest fossil companies have submitted climate plans and set targets for the energy transition. But they still act as if demand for fossil fuels continues to grow in the coming decades: they are awarding lavish awards to the top for expanding mining activities. And they do it structurally. Not only that: the more ambitious the plans for the transition are, the more – paradoxically – CEOs who increase fossil production are paid.
“It is increasingly likely that we will see a spike in demand for each of the fossil fuels by the end of the decade. For most oil and gas companies this means planning for their production to decrease over time, but following their remuneration policies this generally does not seem to be expected”, explains Saidrasul Ashrafkhanov, author of the report “Crude Intentions II” published by Carbon Tracker Initiative.
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Of the 25 largest fossil companies listed on the stock exchange, only one – Occidental Petroleum – no longer gives incentives for the expansion of fossils in its metrics to calculate top corporate compensation. And 9 corporate remuneration policies are still “partially or completely secret“. National oil companies are the worst in this respect.
But even those who make the documents public cheat. And it does this more and more by hiding the increase in incentives for fossil production behind slogans and labels for the energy transition. “For example, companies like Bp, Chevron, ExxonMobil, and TotalEnergies support transition-focused strategies that include incentives to increase production. Moreover, some parameters that incentivize “low carbon” investments drive the growth of “natural” gas, reflecting the promotion of gas as a “low carbon” or “transition” fuel“, the report explains.
Often, then, the metrics used are not at all aligned with the stated strategic objectives, and not only about the expansion of fossils. Among the companies that set remuneration parameters for reducing emissions, only 5 have incorporated metrics that correspond directly to the broader corporate targets for reducing emissions.
All in all, European companies are once again doing better than American companies. The first, in fact, in calculating the salaries of the top management, gives more weight to efforts to move towards new markets and are more inclined to encourage renewable energy and other low-carbon energy than companies based in the United States.