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Despite continuing to pump fossil fuels, the world’s biggest oil companies handed out nearly £15m in bonuses to executives for meeting climate targets last year, Open Democracy can reveal.
US companies Chevron and ExxonMobil, UK-based Shell and BP, Italian company Eni and France’s Total have not failed to pay bonuses for combating climate change and switching to green energy.
The companies made combined profits of hundreds of billions of pounds last year.
The think tank Commonwealth warned that Chevron, ExxonMobil and Total were the “biggest offenders when it comes to doubling oil and gas production” and accused them of easily meeting all six of the sustainability goals that failed to acknowledge the “urgency of the climate crisis”. “.
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An analysis by the financial think tank Carbon Tracker in December found that BP was the only fossil fuel company planning to cut oil and gas production by 2030, and even that target was reduced by 25% from the current 40% cut.
In November, German NGO Urgewald warned that oil and gas companies’ plans for an “alarming” expansion of fossil fuel projects could result in 115 billion tonnes of CO2 emissions – equivalent to US emissions over 24 years.
BP paid its executives – including CEO Bernard Looney – a bonus for reducing the company’s domestic CO2 emissions by seven million tonnes. Although that target was met, it was almost exactly balanced by increasing the amount of CO2 emissions from burning the fossil fuels BP sells, meaning the firm’s emissions in 2021 and 2022 were almost identical (340 million tonnes of CO2).
Levels of transparency in the size of bonuses vary. Total and Eni released the total figure for all of its senior executives (but did not list how many), while Shell and BP only published figures for their chief executives and chief financial officers, not all senior executives.
This means that while OpenDemocracy’s findings show bonuses worth £14.9 million were awarded to senior executives for environmental reasons, the true figure may be higher.
According to Open Democracy, ExxonMobil paid out the most in environmental bonuses, with around £5.4m split between the three executives. Eni followed that up by reporting bonuses worth £2.58m among its executive team.
Next in total was $2.2m, followed by Shell and BP, who paid their CEOs and CFOs £2.03m and £2.029m respectively. In last place was Chevron, splitting £721,000 for five senior executives.
‘The Biggest Offenders’
Commonwealth Research Director Adrienne Buller told OpenDemocracy: “These three firms are among the biggest offenders when it comes to doubling oil and gas production in terms of our chances of reaching net zero. The investment plans of these firms are in stark contrast to the IEA’s recommendations and ignore the urgency of the climate crisis while rewarding executives and shareholders.
Buller added: “Our energy system is about extracting wealth rather than meeting our energy needs sustainably. It needs to be radically rethought. “
Among the six companies, Exxon Mobil chief executive Darren Woods pocketed more than $5.1 million in bonuses. According to ExxonMobil’s filings with the Securities and Exchange Commission, a quarter of it was for meeting green goals — the highest such bonus.
Total’s chief executive and chairman, Patrick Pouyane, came second. He earned bonuses worth more than £2.1m, of which £816,000 was for green targets.
The French energy giant has sparked controversy as one of the Big Six to continue its operations in Russia after Putin invaded Ukraine last year. Only in December did it bow to pressure and promise a “gradual withdrawal” from the country.
Pouyanne was followed by the chief executives of Eni (£486,259 of £1.7m), Shell (£466,200 of £2.6m), BP (£343,070 of £2.3m) and Chevron (£267,000). £3.6m in total).
In total, the six firms paid their CEOs a £17.5m bonus pot, of which more than £3.6m was for achieving targets related to environmental protection.
The world’s major oil companies have been repeatedly criticized for failing to adequately manage the amount of CO2 they emit each year.
A Dutch court ordered Shell to cut carbon emissions by 45% by 2030 after finding that its environmental and sustainability policy was not “concrete” enough, but appealed.
Common Wealth found in the first three months of 2023, Shell spent 14 times more on shareholder compensation than it invested in its ‘Renewable and Energy Solutions Division’. It revealed that between 2013 and the first quarter of 2023, Shell and BP together paid out £176 billion to shareholders.
Both BP and Shell responded to OpenDemocracy to confirm the accuracy of our figures, but did not say why they gave the bonuses or how they decided their targets, although a BP spokesman said this year’s bonuses would be assessed in part on the company’s progress. In-house emissions to net zero by 2050.
Chevron and ExxonMobil referred us to their annual accounts. At the time of publication, neither Total nor I had responded to our request for comment.