90% of energy firms omit Scope 3 reporting

New research from Clarity AI shows that less than 10% of companies are reporting Scope 3 investment emissions data.

In its report entitled, “The Missing GHG Emissions: How Satellite Data Can Quantify the Real Climate Risk of Oil & Gas Companies”, Clarity AI has analysed the largest 20 companies in the oil and gas industry by market capitalization. The report examines and quantifies GHG emissions from all physical assets that these companies own as well as key reporting and disclosure trends.

Key findings include:

Less than 10% of companies report Scope 3 investment emissions data

While all publicly traded oil and gas companies listed in the MSCI All Country World Index (ACWI) report their Scope 1 and Scope 2 GHG emissions, only 9% of these companies report Scope 3 emissions from their investments, according to Clarity AI’s analysis based on 2023 CDP questionnaire. The study found the same pattern among the top 20 companies in the industry, with only one currently reporting emissions from assets the company owns an interest in but which it does not control.

According to the study, accounting for the investment emissions also has a significant impact on how these top 20 companies are ranked according to their GHG emissions intensity. For example, when accounting for these investment emissions, seven out of 20 companies would fall in the rankings versus if they were not accounting for these emissions – with one company falling as many as six places from the ninth spot to 15th.

Patricia Pina, Head of Product Research and Innovation at Clarity AI, said, “While reporting and disclosure remain a foremost priority for organizations throughout the business world, data quality, transparency, and completeness continue to be a noticeable problem area for businesses and regulators alike. 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.”

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