California Resources Corporation

Since the previous assessment, CRC has set a new 2045 net zero target, which covers its scope 1, 2 and 3 emissions. The company is currently not on track to meet this target. CRC can improve by setting intermediate targets, which will incentivise near-term actions on its longer-term goal. CRC should also specify the extent to which it plans to use offsets to achieve its targets.

CRC has strengthened its transition plan since the last (2021) assessment by setting a 2045 net-zero target, covering all emissions. The company has also appointed a board member who has professional sustainability expertise. To improve further, CRC should include medium-term targets to support its long-term goal. It should establish quantifiable key performance indicators and financial commitments. It should expand its scenario analysis to ensure that the plan’s ambition is sufficient for a 1.5°C pathway. The company can also improve the likelihood of a successful low-carbon transition by decoupling its incentives from fossil fuel growth.

There is no evidence that CRC has a trade association policy or a process to monitor and review climate policy positions. CRC reports that it supports the Paris Agreement and California’s net-zero target. However, the company is on the board of the Western States Petroleum Association, which has been identified as having non-climate-aligned positions, including lobbying against state-level climate policy in California, Washington and Oregon and opposing measures to limit fossil fuel development. CRC can increase its credibility by setting a clear position on climate policy and implementing processes to withdraw from trade associations that oppose climate policies.

CRC has identified up to 1 billion tonnes of potential CCS. The company’s Carbon TerraVault project will be operational by 2025 and CRC expects to grow the amount of CO2 injected annually to 5 million tonnes by 2027. The company does not indicate the timeframe for injecting further CO2. To improve its disclosure, the company should report the profitability of this business model. The company does not report any other low-carbon business models. The company is reliant on this one non-mature technology to reach its emissions reduction targets. The company can improve by also developing business activities that drive the expansion of renewable energy and low-carbon fuels.

CRC has set a target to reach net zero across its scope 1, 2 and 3 emissions by 2045, in line with California State’s ambitions. The company also aims to reduce methane emissions by 30% by 2030 compared to 2020. The company has not set any interim targets.

CRC aims to have its carbon capture project, Carbon TerraVault, operational from 2025, reaching an injection of 5 million tonnes per year by 2027. CRC plans to reduce methane leaks by using remote sensing technology and replacing methane pneumatic devices with solar-powered compressed air. To reduce its scope 2 emissions CRC plans to bring 45 megawatts (MW) of solar projects online and is investing in solar developments externally. The company’s plans consider scope 1, 2 and 3 emissions but do not extend beyond 2027.

The company has entered into a joint venture with Brookfield Renewable worth USD 500 million to invest in CCS projects. The company has implemented an internal carbon price of USD 30 per metric tonne (Mt) for its scope 1 emissions, to influence decision-making, drive energy efficiency and guide low-carbon investment. In the reporting year, CRC invested USD 2.6 million in low-carbon research and development (R&D), however, this is less than half the amount the company invested in the previous assessment. The company does not disclose the proportion of total R&D spending this represents.

CRC’s scope 1, 2 and 3 emissions intensity has remained static since 2018. In contrast to its 1.5°C pathway the company’s emissions are projected to remain the same for the next five years. To align with its 1.5°C pathway CRC needs to decrease its scope 1, 2 and 3 emissions intensity by 4% annually.

CRC has set an ambitious net-zero target; however, it is currently not on track to meet this target. The company has not committed to stopping oil and gas exploration or expansion and is heavily reliant on CCS to address its emissions. Additionally, the company is on the board of the Western States Petroleum Association, which lobbies against developing state-level climate policy. Taken together, this suggests CRC does not intend to meaningfully transition its business model.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

The company has a commitment to create and support access to green and decent jobs as part of the low-carbon transition. However, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company discloses the actions it takes to provide training opportunities for workers and affected stakeholders. For instance, it supports programs that enable students to learn science, technology, engineering and mathematics (STEM) and the energy industry. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to re- or up-skill.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company has a grievance mechanism available to workers and external stakeholders. However, no other policies or commitments of the company related to respect for human rights were found in the public domain. This includes the necessary policies and systems by which the company can ensure respect for basic human rights in its operations and supply chain.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. No evidence was found of a time-bound target for paying all workers a living wage. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company’s required working hours. The company discloses some indicators of workforce diversity, including the gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. No evidence was found that the company commits to gender equality and women’s empowerment.

No evidence was found that the company commits to protecting personal data. While the company discloses corporate income tax paid for each relevant jurisdiction, no relevant disclosure was found of its global tax strategy. The company does have a policy prohibiting bribery and corruption, yet it is unclear whether the company includes corresponding clauses in its contracts with business relationships. While the company has a lobbying and political engagement policy, no evidence was found that it specifies that it does not make political contributions. No relevant disclosure was found of the company’s expenditure on lobbying activities.