Equinor

Equinor states in its Integrated Report that it is aiming for net-zero emissions by 2050. In line with this, the company mentions that it aims for a 50% emissions reduction in operations (scopes 1 and 2) by 2030, which is aligned with its 1.5°C pathway. The company also aims for 40% emissions intensity reduction from operations and use of sold products (scopes 1, 2 and 3) by 2035. Equinor is on track to achieve its aim to reduce emissions from operations and to reduce its upstream emissions intensity. However, the company is not on track to achieve its scope 1, 2 and 3 emissions intensity goals. The company should set more interim targets, no more than five years apart, to incentivise near-term actions on its long-term goals.

Equinor invested only 3% of its total capital expenditure (CapEx) in renewables and less carbon-intensive low-carbon solutions in 2019. This rose to 14% in 2022. The company expects to invest 50% of its CapEx in renewables and less carbon-intensive solutions by 2030. However, Equinor does not provide sufficient details of these solutions to allow for an assessment of their alignment with a low-carbon transition. To align with a 1.5°C pathway, the oil and gas sector is expected to allocate 77% of investment to low-carbon technologies. A more rapid reallocation of investment would help the company become a leader in its low-carbon business areas.

Equinor has a review process for its trade associations. However, the company continues to be a member of trade associations that hold negative stances on climate policies. The company provides between USD 1 to 3.5 million to the American Petroleum Institute, which strongly opposes efforts to restrict further development of oil and gas. The company also provides between USD 100,000 to 500,000 to the Natural Gas Supply Association, Eurogas and the National Association of Manufacturers, which strongly support further development of fossil gas infrastructure. Equinor can increase its credibility by withdrawing membership from associations that oppose climate-positive policies.

Equinor is expected to exceed its 1.5°C carbon budget by approximately 30% between 2022 and 2050. This does not account for its development of new (unsanctioned) oil and gas fields. Yet, over half of Equinor’s CapEx for 2024-2026 is linked to unsanctioned projects. According to the International Energy Agency (IEA), no new oil and gas fields can be approved for development under a 1.5°C scenario. Equinor should commit to no further exploration to increase the credibility of its transition to a 1.5°C pathway.

Equinor has set a net-zero by 2050 aim with group-wide interim goals. The company is aiming to reduce scope 1 and 2 emissions by 50% by 2030 compared to 2015, as well as reducing its scope 1, 2 and 3 emissions intensity by 40% by 2035 compared to 2019. Equinor is also aiming for an upstream carbon intensity of 6 kilograms of carbon dioxide per barrel of oil equivalent (kg/boe) and a near-zero methane intensity by 2030.

Equinor plans to expand its renewable energy capacity to 12-16 gigawatts by 2030. The company’s CCS activity is set to expand to 15-30 million tonnes per annum (mtpa) of carbon dioxide transport and storage capacity by 2035. At the same time, the company plans to supply hydrogen to 3-5 major industrial areas. It is unclear what proportion of this hydrogen will be created using low-carbon production methods. To support its transition plan, Equinor will be investing USD 23 billion between 2021-2026 in renewables. Equinor’s ambition is to reach a 40% share of research and development (R&D) expenditure committed to energy efficiency and less carbon-intensive projects by 2025.

In 2021, 33% of Equinor’s total R&D budget was spent on less carbon-intensive technologies. However, Equinor does not provide sufficient details of these technologies to enable an assessment of their alignment with the low-carbon transition. In 2022, the company spent USD 1.3 billion of CapEx on its renewables business. However, Equinor generated only USD 185 million in revenue from renewables, which was less than 1% of its total revenue in 2022.

Equinor’s scope 1, 2 and 3 emissions intensity decreased marginally between 2017 and 2022, though not at the rate required by its 1.5°C pathway. The company is still expanding its fossil fuel activities. As a consequence, Equinor is projected to exceed its scope 3 carbon budget by approximately 30% between 2022 and 2050.

Although Equinor has developed a plan for energy transition, it continues to develop its fossil fuel activities, which can be noted in its acquisition of Suncor, a company strategically focused on oil sands. The company shows no indication of abating its exploration activities now and in the future. Equinor needs to step up investment and ambition for its new less carbon-intensive business models and increase the rate of emissions reduction to align with its 1.5°C pathway.

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 just 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 just transition planning.

The company discloses the actions it takes to create new jobs. It partners with several organisations that deliver jobs in the areas of decarbonisation and generation of renewable energies. However, no public commitment 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. No public commitment by the company was found stating its intention to re-skill and up-skill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company re- and up-skills workers in a way that ensures gender balance and inclusion of vulnerable groups.

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 and the ILO fundamental rights at work, and it expects its business relations to do the same. Furthermore, the company discloses a human rights due diligence process that includes the identification and assessment of salient human rights risks, such as forced labour conditions throughout its supply chain. However, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. Nevertheless, the company does have a grievance mechanism available to workers and external stakeholders.

The company commits to the health and safety of its workers and expects the same commitment of its business relationships. The company also discloses indicators of workforce diversity, including age, gender, region and education. Furthermore, the company discloses that 36% of its board is composed by women. The company does have a commitment regarding living wages, and it has achieved paying all its workers a living wage, but it can expect the same commitment from its suppliers. Additionally, the company can strengthen its disclosure on subjects such as working hour practices. The company can also disclose the proportion of its direct workforce covered by collective bargaining agreements and describe how it promotes freedom of association and collective bargaining within its business relationships.

The company commits to protecting personal data; however, it can disclose a privacy statement regarding the use of personal data. The company discloses its global tax strategy and board accountability for the strategy as well as reporting income tax paid in each relevant jurisdiction. Furthermore, the company has a policy prohibiting bribery and corruption, and includes corresponding clauses in its business relationship contracts. The company also has a lobbying and political engagement policy, and it specifies that it does not make political contributions. However, the company can expand its disclosure of its expenditures on lobbying activities.