How to Develop Action-Oriented Climate Strategies

Emissions regulations are likely to increase. Multinational companies don’t need to wait; they can proactively respond by cutting emissions.

In 2004, the combined production emissions of BP, ExxonMobil, and Shell were equivalent to half the emissions in the UK. Consumption of BP’s products resulted in 1376 million tons of CO2 being released in 2004, exceeding all of Germany’s 2002 emissions.

A 2007 paper by Ingvild Andreassen Sæverud and Jon Birger Skjærseth, Oil Companies and Climate Change: Inconsistencies between Strategy Formulation and Implementation, explores how climate strategies of ExxonMobil, Shell, and BP are implemented.

Corporate climate change actions are typically consistent with company strategy.

The researchers found a high consistency between companies’ environmental strategies and the actions taken to implement them. Consistent with its reactive strategy, ExxonMobil did not acknowledge the impact of GHGs and opposed the Kyoto Protocol. Consistent with their proactive strategies, Shell and BP acknowledged climate change, supported Kyoto, and set targets to reduce their emissions.

Leadership and policy alignment are key to action.

Emissions regulations are likely to increase. Multinational companies don’t need to wait; they can proactively respond by cutting emissions.

Strategies are more likely to be put into practice if they are backed by strong company leadership and are in line with regional and global climate policies. Specifically, strategies are more likely to be implemented when:

• Strong leadership demonstrates accountability for action. BP has long-term climate strategies and kept the same CEO from 1995 to 2007 to help support them.

• Climate strategies are in line with regional and global climate policy. Shell and BP invested in reducing emission by 10% relative to 1990 levels by 2010 in support of the Kyoto Protocol. Exxon reported emissions because of EU climate policy such as the European Climate Action Program, which led them to participate in emissions trading.

Align investments with climate change strategy too.

To develop climate strategies that translate into action, companies should set specific targets to reduce emissions. BP committed to no net increases in emissions by 2012 regardless of company growth.

Companies should also align investments with their climate strategies. Shell and BP have improved energy-efficiency of their operations, reduced flaring and venting, invested in wind and solar power, and are developing ways to capture CO2 from production to store or to improve oil recovery. These investments not only respond to policy, they present an opportunity for companies to showcase their commitment to helping the planet.

Sæverud, Ingvild Andreassen, & Skjærseth, Jon Birger. (2007). Oil Companies and Climate Change: Inconsistencies between Strategy Formulation and Implementation? Global Environmental Politics, 7(3): 42-62.