Our approach to net-zero
In 2020, we adopted a climate-related risk framework that included a target to reduce operational Scope 1 and 2 emissions intensity by 2030, as well as an ambition to further reduce those emissions to net-zero by 2050. While we remain on track to achieve our target of reducing emissions intensity by 50-60% by 2030, we are discontinuing the timeline associated with our operational net-zero ambition.
When we first announced the net-zero ambition, we recognized its associated challenges and uncertainties, and we described how changes to regulatory, market and technology conditions might impact our ability to achieve it. While we continue to support global efforts to reach net-zero, recent signposts observed and incorporated within our Global Energy Scenarios have led us to remove the 2050 timeline from our ambition. This adjustment reflects current societal, technological and economic realities, as well as evolving stakeholder expectations.
Since announcing the ambition, we have made strides in our understanding of the emissions reduction landscape and the market conditions that underpin it. We set our operational net-zero ambition noting that low-carbon technologies and markets were still in early stages of development and with the understanding that governments would continue to develop policies in line with their Nationally Determined Contributions (NDCs), facilitating an orderly energy transition. However, development of both low-carbon technologies and climate policy have progressed more slowly than expected, as countries balance emissions reductions with energy availability, security and affordability. Despite these challenges, we remain committed to pursuing our nearer-term 2030 target in tandem with a longer-term operational net-zero ambition.
Many uncertainties continue to influence the timeline associated with achieving net-zero across the globe. Examples include:
- Technical and economic feasibility of nascent low carbon investments, technologies and markets and the pace of development of currently undeveloped technologies.
- Country-level climate policy.
- The size and composition of future energy demand driven by the world’s population and its per capita energy consumption.
- Permitting and regulatory changes that may impact ability to execute current or future plans.
- Pricing, verifiability, availability and acceptability of offsets and the development of related market mechanisms.
- Potential revisions to emissions estimates and reduction goals as measurement technologies advance.
The degree and pace at which these uncertainties are addressed will determine the timeline associated with achieving our operational net-zero ambition. We will continue to monitor signposts that may point to a realistic and feasible timeline to inform future assessments of the ambition.
In the meantime, we continue to monitor global efforts to reduce emissions, and we will advance our Climate Risk Strategy with a specific focus on eliminating methane sources, reducing flaring and delivering our 2030 emission intensity targets.
The core component of our strategy remains the same—stay the course on reducing Scope 1 and Scope 2 emissions intensity and continue building a low cost of supply, low GHG intensity portfolio.
