Over 90% of oil and gas companies globally do not report Scope 3 emissions from their investments, leading to discrepancies in calculating portfolio carbon footprints. New research from global sustainability tech platform Clarity AI based on analysis of environmental platform CDP’s 2023 climate change questionnaire revealed that 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 from their investments, only 9% report on Scope 3. The study found the same pattern among the top 20 companies in the industry, with only one currently reporting emissions from assets it has a stake in but does not control. If missing investment emissions were accounted for, a portfolio consisting of investments in those top 20 companies would have a 24% higher carbon footprint – a significant discrepancy in overall carbon impact, Clarity AI argued. Seven of the 20 companies would also fall in GHG emissions intensity rankings – with one company tumbling six places, from ninth to 15th. “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 area 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.” The report examined and quantified GHG emissions from all physical owned by the companies – including minority investments – as well as key reporting and disclosure trends, leveraging data from non-profit Climate TRACE. “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,” said Pina.
