ConocoPhillips

ConocoPhillip’s scope 1 and 2 emissions intensity marginally decreased between 2017 and 2021. This does not align with the company’s 1.5°C pathway, which requires it to reduce its scope 1 and 2 emissions intensity by about 8% per year between 2021 and 2026. Moreover, ConocoPhillips invested around 2% of its total capital expenditure (CapEx) in low-carbon mitigation technologies in 2022, but does not project its low-carbon mitigation CapEx for the next five years. To meet the sectoral-level expectation, at least 77% of the company’s total CapEx should be dedicated to low-carbon technologies.

ConocoPhillips reports that it is investing in the demonstration and the commercial deployment of energy efficiency, methane detection and reductions, and other emissions reduction technologies. Although it discusses the use of carbon capture and storage (CCS), it does not detail all the technologies its R&D activities are funding. Thus, it is unclear whether and how much ConocoPhillips is investing in any associated mature or non-mature climate technologies. To meet the sectoral-level expectation, at least 77% of the company’s total R&D investments should be dedicated to low-carbon technologies.

ConocoPhillips provides monetary incentives to its corporate executive team and all its employees for performance against its climate-related operating plans. It also provides non-monetary rewards to all employees for activities related to efficiency projects. The executive team is eligible for the three-year Performance Share Program (PSP) and the annual Variable Cash Incentive Program (VCIP), and in 2023 will introduce a separately weighted metric for the company’s “Energy Transition Milestones”. All employees are eligible for non-monetary rewards, such as the company’s Spirit Award for efficiency project work. However, the company can improve the likelihood of a successful low-carbon transition by clearly decoupling incentives from fossil fuel volume growth.

ConocoPhillips’ business model for the production and sale of sustainable fuels relates to evaluating technologies to enable green hydrogen production. The company is also collaborating with Japanese energy company JERA to evaluate the development of green and blue ammonia. Further, the company is developing an offshore wind farm as a low-carbon electricity business model via a joint venture with CNOOC Renewables. However, the primary purpose of this venture appears to be to power its own operations in China.

ConocoPhillips has set a target to reduce its scope 1 and 2 emissions by 50-60% by 2030 compared to 2016. It also has a target to reduce its absolute scope 1 and 2 emissions by 100%. But both of these targets rely on the use of offsets. ConocoPhillips has low-carbon business models related to the production of sustainable fuels, such as green hydrogen and low-carbon ammonia production, along with the generation of low-carbon electricity through the joint development of an offshore wind farm.

ConocoPhillips aims to invest in voluntary offsets from 2022 to support the achievement of its scope 1 and 2 emissions reduction targets. The company aims to reduce its methane emissions intensity by a further 10% on its 65% methane reduction target by 2025 compared to 2019, along with achieving near-zero methane intensity emissions by 2030 and zero routine flaring by 2025. ConocoPhillips also discusses the use of carbon capture and storage (CCS) technologies and hydrogen production in the long term, but it has not yet set production targets for these.

ConocoPhillips reports reducing its methane emissions intensity and its scope 1 and 2 emissions intensity. In 2022, the company only invested about 2% of its total CapEx in low-carbon mitigation technologies and invested USD 71 million in its total R&D. In 2022, ConocoPhillips and Japanese energy company JERA announced a collaboration to evaluate the development of green and blue ammonia.

Between 2017 and 2021, ConocoPhillips’ scope 1 and 2 emissions intensity decreased by about 4% annually. ConocoPhillips’ scope 1, 2 and 3 emissions intensity was fairly static over this period, but this trend was influenced by the reduction in its scope 1 and 2 emissions in 2021. To align with its 1.5°C pathway, the company needs to decrease its scope 1 and 2 emissions intensity by about 8% annually, and its scope 1, 2 and 3 emissions intensity by about 4% annually.

ConocoPhillips has targets to reduce its scope 1 and 2 emissions intensity by 2030 and further by 2050. These targets are supported by the use of an unquantified amount of offsets. ConocoPhillips’ reported low-carbon business models related to the development of an offshore wind farm with CNOOC Renewables and evaluation of green hydrogen production through its collaboration with JERA. But the company is still engaging in the development of additional fossil fuel projects, such as the Willow Project in Alaska.

While the company mentioned the engagement with stakeholders on climate-related risks, 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 actions 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 offers on-the-job learning, formal training, regular feedback and mentoring to its employees. 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 commits to respecting human rights. However, no evidence was found that the company commits to respecting the ILO fundamental rights at work and that it expects its business relationships to demonstrate the same commitment. The company describes its process to identify its human rights risks and impacts. However, no evidence was found that it assesses its human rights risks and discloses what it considers to be its salient human rights issues. The company takes action to mitigate these risks in its own operations and in its supply chain. 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. No evidence was found of the company having 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 indicators of workforce diversity, including the age, gender and race/ethnicity of its workforce by employee category.

No evidence was found that the company commits to protecting personal data and that it has a privacy statement regarding the collection, sharing and access to personal data of all its stakeholders, including employees and customers. 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, and it includes corresponding clauses in its business relationship contracts. However, no evidence was found that the company has a lobbying and political engagement policy and that it specifies that it does not make political contributions. While the company discloses the amount of lobbying cost for its operations in the United States, no evidence was found that the company only lobbies in the United States.