By Dhirendra Tripathi
Investing.com – Chevron stock (NYSE:CVX) traded 0.2% higher in Tuesday’s premarket a day after an eagerly-awaited company presentation avoided giving the oil and gas group firm targets for cutting carbon emissions.
As such, the U.S.'s second-biggest oil and gas company resisted pressure from shareholders who voted in May for such a target.
Chevron said it aims to have net zero emissions from its operations by 2050. It has also set a target of reducing carbon intensity by 5% by 2028 from 2016 levels for the full lifecycle of its products. The latter target, for what is known as Scope 3 emissions, make up the majority of fossil fuel pollution.
Chevron has committed to invest $8 billion by 2028 in low-carbon investments and $2 billion in carbon-reduction projects. It has already announced plans to shift towards low-carbon businesses including renewables, carbon-capture technologies and hydrogen, against a backdrop of reports suggesting that Engine no. 1, an ESG-focused activist investor that has secured board seats at Exxon Mobil (NYSE:XOM), is planning a repeat campaign with Chevron.
The developments again highlight the gap in governance and priorities between U.S. and European energy majors, which have been more susceptible to environmentalist pressure.
Last month, Shell (LON:RDSa) sealed a deal with ConocoPhillips (NYSE:COP) to sell its Permian assets for $9.5 billion to focus on lower-carbon assets. Shell also announced plans to build one of Europe’s biggest biofuels facilities, a 820,000-ton per year unit in the Netherlands.
Bloomberg quoted the Dutch campaigner that filed the investor proposal, as calling Chevron’s new goal “disappointing tokenism.” Rather than a 5% reduction in Scope 3 intensity, absolute emissions need to come down by 40% by 2030 to have any chance of achieving the 2016 Paris Agreement, the group said, as per Bloomberg.