Just 9% of leading oil and gas companies report their Scope 3 investment emissions data, with their carbon footprint said to be significantly higher once these “missing emissions” are accounted for, according to a study from ClarityAI.
While all publicly traded oil and gas companies listed in the MSCI All Country World Index (ACWI) report Scope 1 and Scope 2 greenhouse gas (GHG) emissions, only 9% of these companies report Scope 3 emissions from their investments, according to Clarity AI’s latest study – The Missing GHG Emissions: How Satellite Data Can Quantify the Real Climate Risk of Oil & Gas Companies.
The study found the same pattern among the top 20 companies in the industry, with only one currently reporting emissions from assets the company owns an interest in but which it does not control.
Analysing the largest 20 companies in the oil and gas industry by market capitalisation, the report examined and quantified GHG emissions from all physical assets these companies own, including their minority investments, as well as key reporting and disclosure trends, leveraging data from Climate TRACE, a global non-profit coalition that independently tracks GHG emissions globally.
“While reporting and disclosure remain a foremost priority for organisations throughout the business world, data quality, transparency and completeness continue to be a noticeable problem for businesses and regulators alike,” said Patricia Pina, head of product research and innovation at Clarity AI.
“This is particularly true within the oil and gas industry as it relates to Scope 3 emissions, whereby reporting and data gaps lead to chronic underreporting of portfolio carbon footprints and provide a distorted view of how companies compare on carbon intensity.”
According to the study, a portfolio of investments in the top 20 oil and gas companies would have a 24% higher carbon footprint than if these emissions were not accounted for – a significant discrepancy in overall carbon impact.
Accounting for the investment emissions also has a significant impact on how these top 20 companies are ranked according to their GHG emissions intensity. For example, seven out of 20 companies would fall in the rankings versus if they were not accounting for these emissions – with one company falling as many as six places from the ninth spot to 15th.
“The impacts of not reporting investment Scope 3 data are incredibly stark and underline the importance of having a comprehensive and transparent view of an organisation’s emissions footprint,” concluded Pina.
