Chevron

Chevron aims to reduce its scope 1 and 2 emissions intensity from upstream oil by 40% and upstream gas by 26% by 2028 compared to 2016. The company has also set emissions intensity reduction targets for its upstream methane, flaring and refining activities. Chevron aims to reduce its PCI by 5% by 2028 compared to 2016, with some reliance on offsets. Chevron’s 1.5°C pathway requires a reduction of its PCI by nearly 5% annually between 2022 and 2027. The company’s aspiration to reduce its upstream scope 1 and 2 emissions by 100% by 2050 is not supported by sufficient intermediate targets. Setting regularly spaced intermediate targets will help incentivise near-term actions towards its long-term goals.

Chevron’s low-carbon investments amounted to USD 4.8 billion during 2021-2022, with USD 2.9 billion associated with the acquisition of REG. This is far below the sectoral expectation of 77% CapEx for low-carbon activities under a 1.5°C scenario, indicating a strong focus on traditional oil and gas operations. Several expansion projects by the company in the US have been approved or are expected to be approved. Chevron’s carbon budget between 2022 and 2050 is projected to exceed its total 1.5°C carbon budget by about 70%.

Chevron claims to discuss climate change and energy transition with suppliers, but there is no evidence that it integrates emissions reduction into its supplier engagement. The company does not require suppliers to publicly report on their greenhouse gas (GHG) emissions, nor does it include emissions reduction criteria in the selection or renewal of supplier contracts. Chevron’s collaboration with suppliers on emissions reduction can have a substantial impact on the company’s scope 3 emissions.

Chevron has taken steps to reduce its emissions, including implementing board-level oversight of climate issues, developing a strategy to reduce emissions from operations by 2028, and expanding low-carbon businesses such as renewable fuels, waste-to-hydrogen, and CCS by 2030. The company incorporates a carbon price into its business planning. Although Chevron has considered the International Energy Agency (IEA) Net Zero Emissions by 2050 and other scenarios, it has not used the results to inform its strategy. Chevron needs to establish a time-bound action plan outlining how it will transition to a low-carbon economy.

Chevron aims to reduce its PCI by 5% by 2028 compared to 2016, with reliance on offsets. The company also aims to reduce its emissions intensity from upstream oil by 40% and from upstream gas by 26% by 2028 compared to 2016. Chevron has not set any formal emissions reduction targets beyond 2028. The company has communicated an aspiration to reduce its upstream scope 1 and 2 emissions by 100% by 2050 with reliance on offsets; however, this has not been set as a target.

Chevron places CCS, offsets and renewable fuels, as well as hydrogen produced from waste and gas with CCS technology, at the centre of its strategy to address climate change. The company has committed to invest approximately USD 1.25 billion annually between 2021 and 2028 to lower the carbon intensity of its traditional oil and gas operations and advance its low-carbon strategy.

Chevron has acquired REG and become the second-largest producer of bio-based diesel in the US. At the same time, the company aims to grow its traditional oil and gas business. In 2022, Chevron increased upstream CapEx by over 40% relative to the previous year. By 2026, Chevron’s Gulf of Mexico production is expected to increase by about 50%.

Chevron’s midstream oil refining emissions intensity has increased between 2017 and 2022. The company saw some decline in its upstream oil and gas emissions intensity between 2017 and 2022. However, this is not sufficient to align with the company’s 1.5°C pathway, which requires Chevron to deliver a 9% annual decrease in its scope 1 and 2 emissions intensity between 2022 and 2027.

While developing new low-carbon capacities, Chevron is increasing its upstream oil and gas CapEx and plans to grow its oil and gas production. Chevron has not set ambitious emissions reduction targets and is on the board of multiple trade associations that have been identified as having negative climate positions. Chevron lacks a consistent approach to a low-carbon transition.

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 on just transition. 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.

No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, 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 and education opportunities for workers and affected stakeholders. For instance, it has a portfolio of learning and development programmes, including human rights training. Furthermore, the company discloses the measures it takes to embed equality of opportunity for women and vulnerable groups in these actions. It does this through its partnership with academic institutions to provide scholarships for underrepresented minorities. However, no evidence was found of the company having a process for identifying skills gaps for workers and stakeholders affected by the low-carbon transition 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 to address the impact of the low-carbon transition. The company discloses the process by which it aligns its lobbying activities with policies and regulations that support the just transition. However, 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 commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. However, no evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and in its supply chain. Moreover, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. However, no evidence was found of the company having a time-bound target for paying all workers a living wage. Furthermore, there is no evidence the company discloses the proportion of its direct workforce in all operations covered by collective bargaining agreements or the company’s required working hours. The company discloses some indicators of workforce diversity, including gender and race/ethnicity of its workforce by employee category. The company commits to gender equality and women’s empowerment.

The company commits to protecting personal data. However, no evidence was found of a privacy statement regarding the collection, sharing and access to personal data. While the company discloses its global tax strategy, no relevant disclosure was found of the corporate income tax it pays in each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption. Furthermore, the company has a lobbying and political engagement policy. However, no evidence was found that the company does not make political contributions and that it discloses its expenditure on lobbying activities across all its operations.