Last year the world’s biggest oil companies handed out almost 15 million in bonuses to executives for meeting climate goals despite continuing to pump fossil fuels, openDemocracy can reveal.
None of the big six US companies Chevron and ExxonMobil, UK-based Shell and BP, Italy’s Eni and Frances Total failed to pay bonuses, which were related to tackling climate change and transitioning to greener energy .
The companies made a combined profit last year of hundreds of billions of pounds.
The Common Wealth think tank warned that Chevron, ExxonMobil and Total are the biggest offenders when it comes to doubling oil and gas production, and accused all six of setting easily achievable sustainability goals that failed to recognize the urgency of climate crisis.
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Analysis by financial think tank Carbon Tracker in December found that BP was the only fossil fuel company planning to reduce oil and gas production by 2030, and even that goal has now been scaled back by a reduction in 40% at a 25% reduction.
In November, German NGO Urgewald warned that oil and gas companies’ plans for a frightening expansion of fossil fuel projects would lead to the emission of 115 billion tons of CO2 equivalent to more than 24 years of US emissions.
BP has awarded its executives, including CEO Bernard Looney, a bonus for reducing the company’s internal CO2 emissions by seven million tonnes. While that target was met, it was almost exactly offset by an increase in the amount of CO2 emissions from burning the fossil fuels sold by BP, meaning that corporate emissions were almost identical in 2021 and 2022 (340 million tons of CO2).
Levels of transparency about the size of the bonuses varied. Total and Eni released a total figure paid to all of its senior executives (but didn’t list how many there were), but Shell and BP apparently only released figures for their chief executives and chief financial officers, not all senior executives.
This means that while openDemocracy’s findings suggest that 14.9 million bonuses have been awarded to senior executives for environmental reasons, the true figure is likely higher.
According to openDemocracy’s tally, ExxonMobil gave the most in environmental bonuses with about $5.4 million split among three executives. It was followed by Eni, which recorded 2.58 million bonuses among its executives.
Next was Total with 2.2 million, followed by Shell and BP, who gave 2.03 million and 2.029 million respectively to their CEOs and CFOs. In last place was Chevron which split 721,000 among five top executives for their efforts.
The biggest offenders
Common Wealth research director Adrienne Buller told openDemocracy: Three of these companies are among the biggest offenders when it comes to doubling oil and gas production at the expense of our prospects of reaching net zero. The investment plans of these companies sharply contradict the recommendations of the IEA and ignore the urgency of the climate crisis, while rewarding executives and shareholders.
Buller added: Our energy system is geared towards extracting wealth, rather than sustainably meeting our energy needs. It needs to be radically reinvented.
Among the six companies, ExxonMobils CEO Darren Woods pocketed the largest bonus at more than $5.1 million. A quarter of that, according to ExxonMobils filings with the Securities and Exchange Commission, was to meet green goals—the highest bonus of its kind.
Totals CEO and chairman Patrick Pouyann finished second. He got a bonus worth over 2.1 million, of which 816,000 for achieving green goals.
The French energy giant has sparked controversy for being the only one of the big six to initially continue its operations in Russia after Putin invaded Ukraine last year. Only in December did he give in to pressure and promised to gradually withdraw from the country.
Pouyann was followed by the CEOs of Eni (486,259 of a total bonus of 1.7 million), Shell (466,200 of a total of 2.6 million), BP (343,070 of a total of 2.3 million) and Chevron (267,000 of a total 3.6 million total).
Collectively, the six companies have granted their CEOs a combined bonus pot of $17.5 million, of which more than $3.6 million is for achieving goals nominally related to environmental protection.
The world’s major oil companies have repeatedly been criticized for failing to adequately address the scale of CO2 they emit each year.
Shell was ordered by a Dutch court to cut carbon emissions by 45% by 2030 after its environment and sustainability policy was deemed insufficiently concrete, but has appealed.
Common Wealth found In the first three months of 2023, Shell spent more than 14 times as much on shareholder compensation as it did on investments in its Renewable and Energy Solutions division. He revealed that Shell and BP together distributed 176 billion to shareholders between 2013 and the first quarter of 2023.
BP and Shell replied to openDemocracy to confirm the accuracy of our figures but did not comment on why they handed out the bonuses or how they decided on their targets, although the BP spokesperson said this year’s bonuses they would be partly evaluated based on the company’s progress. towards zero net domestic emissions in 2050.
Chevron and ExxonMobil referred us to the annual accounts. At the time of publication, Eni and Total had not responded to our request for comment.
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