MOL Magyar Olajes Gazipari Nyrt

MOL has set new emissions targets since the previous benchmark assessment. The company plans to reach net zero across scope 1, 2 and 3 emissions by 2050. It has also set an interim target for its scope 1 and 2 emissions, which it aims to reduce by 30% by 2030 compared to 2019, as well as specific scope 1 and 2 targets for its upstream and downstream segments. However, MOL does not quantify its use of offsets and could therefore not be assessed for alignment with a 1.5°C pathway. In addition to providing information on any use of offsets, the company should set sufficient interim targets no more than five years apart to drive near-term action towards its long-term goals. Moreover, it should include scope 3 emissions in its interim targets.

Between 2017 and 2021, MOL’s scope 1 and 2 emissions intensity has declined. However, this emissions intensity decline does not align with the company’s 1.5°C pathway, which requires a much steeper decrease of 7% annually until 2026. Additionally, MOL is predicted to exceed its scope 3 carbon budget by around 30% between 2022 and 2050.

MOL does not publicly report its total or planned research and development (R&D) spending for low-carbon mitigation or carbon removal technologies. The company can improve its performance in relation to intangible investment by providing further financial disclosure and more detail about the renewables projects for which it is investing in R&D. Additionally, it should invest in R&D for carbon removal technologies (CDR) and carbon capture, use and storage (CCUS) technologies, with the aim to meet the sectoral expectation of 77% R&D spending in these areas.

MOL has not developed a strategy to influence its clients to reduce their emissions. However, it has developed several activities related to alternative mobility that can help its customers reduce emissions. For instance, in 2018 MOL launched a car-sharing service and electric vehicle (EV) charging point business. By 2021, the company had expanded this business to 178 EV charging points across its MOL Group service stations. The company should turn these actions into a clear strategy to increase its reach.

MOL has set a target to reach net zero across its scope 1, 2 and 3 emissions by 2050. It has also set several overlapping interim targets to reduce its scope 1 and 2 emissions across all its business sectors by 30%, from its downstream operations by 20%, and from its upstream operations by 100%, by 2030 taking 2019 as the baseline. The company also aims for zero routine flaring by 2030.

The company’s low-carbon transition strategy focuses on plans to align with the European Green Deal. MOL has a vision to play a key role in the circular economy across Central and Eastern Europe. MOL plans to invest USD 3.5 billion into petrochemical transformation and low-carbon technologies between 2022 and 2026; however, it is not clear what proportion of this spending will go towards low-carbon technologies. MOL also plans to increase operational energy efficiency, further expand its low-carbon mobility services and solar and geothermal capacity, and diversify into renewable hydrogen and first-generation biofuels.

In 2022, MOL built one of the largest green hydrogen plants in Hungary with a production capacity of 1,160 tonnes per year. In 2021, the company began producing first generation biofuels at its Danube refinery. MOL purchased an ownership stake in ALTEO in 2022, a company with a diverse renewable portfolio. In 2021, the company expanded its EV charging service MOL Plugee to 178 installed charging points across its service stations.

MOL’s scope 1, 2 and 3 emissions intensity has slightly decreased since 2017. In contrast to its 1.5°C pathway, the company’s emissions are projected to remain static for the next five years. To align with its 1.5°C pathway, MOL needs to decrease its scope 1, 2 and 3 emissions intensity by approximately 4% annually. The company’s scope 3 locked-in emissions are projected to exceed its 1.5°C carbon budget by around 30% between 2022 and 2050.

MOL is developing several low-carbon business activities that can help the company transition away from fossil fuel activities. However, MOL’s commitment to a low-carbon transition must be reinforced with sufficient interim targets with short-, medium- and long-term horizons, which include scope 3 emissions reduction measures.

The company publicly discloses a commitment to engaging in social dialogue with workers and unions. However, no relevant disclosure was found regarding the categories of stakeholders it engages with on a just transition. Nor was there any evidence to show 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.

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 that the company has actions to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found to display that the company assesses employment dislocation risks. No public commitment by the company was found stating its intention to re- 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 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. There is evidence that the company discloses the stakeholders whose human rights have been affected by its activities. The company also has 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. 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 does not disclose indicators of workforce diversity. Furthermore, the company does not commit to gender equality and women’s empowerment.

The company commits to protecting personal data. However, no evidence was found of the company having 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, and it includes corresponding clauses in its business relationship contracts. Furthermore, the company has a lobbying and political engagement policy, and it specifies that it does not make political contributions. Yet, no relevant disclosure was found of the company’s expenditure on lobbying activities.