Oil and Natural Gas Corporation

As of this reporting year, ONGC had not set any emissions reduction targets and outlined no plans to develop any. However, in May 2023 ONGC revealed a new climate investment plan which includes a 100% scope 1 and 2 emissions reduction target by 2038. The company should develop a long-term target that aligns with its 1.5°C pathway and covers its scope 1, 2, and 3 emissions. Additionally, the company should set intermediate targets at gaps of no more than five years to incentivise near-term action on longer-term goals.

ONGC’s scope 1 and 2 emissions intensity remained static between 2017 and 2022 and is projected to remain static until 2027. This contrasts with the company’s 1.5°C pathway which requires it to reduce its emissions intensity by over 10% annually. The company has not committed to stop oil and gas exploration and expansion. This does not align with the International Energy Agency (IEA) Net Zero Emissions by 2050 (NZE) Scenario, which does not allow for any expansion of producing assets beyond those sanctioned earlier than 2022. Consequently, ONGC is projected to exceed its 1.5°C carbon budget between 2022 and 2050.

ONGC has established a carbon management and sustainability group, but there is no evidence that the company has board-level oversight of climate change issues or that its board members have any significant expertise in the low-carbon transition. The company’s limited consideration of climate change at the executive level is reflected in its strategy, which is focused on nearly doubling upstream production and quadrupling its refining capacity by 2040. ONGC has not conducted climate change scenario analysis to understand how transition risks such as oil and gas demand or carbon pricing will impact its business.

ONGC’s plan to develop low-carbon business activities lacks ambition. ONGC is targeting 10 gigawatts (GW) of renewable energy capacity by 2040, with an intermediate target of 2 GW of onshore wind energy and 1.5 GW of solar energy by 2030. While this is an improvement on its previous target of 5 GW, a 10 GW capacity developed over a 20-year time frame is unlikely to considerably change the company’s sold energy portfolio at the pace required by the low-carbon transition. The company does not appear to be sufficiently growing its green hydrogen business model, which will limit its ability to capitalise on its existing upstream and refining competencies.

ONGC’s Energy Strategy 2040 outlines its targets for renewable energy generation including a 2030 target of 2 GW of wind energy and 1.5 GW of solar energy. This is a significant scale up from the combined 0.18 GW of solar and wind energy that ONGC reported in 2022. ONGC has scaled up its ambition for 2040 by 50%, with the aim of achieving 10 GW of renewable energy capacity. ONGC has not committed any planned future capital expenditure (CapEX) or research and development (R&D) investment towards the low-carbon transition. However, the company has outlined its aim for a 10% contribution from its non-oil and gas business to its profit after tax in 2040.

ONGC discloses some elements of transition planning. The company has created a strategy for 2040 which outlines its 2030 and 2040 renewable energy targets. However, specific short- or long-term actions are not included and little financial content related to the low-carbon transition is included. ONGC has not set any emissions reduction targets and does not report its scope 3 emissions. ONGC’s strategy also focuses on the company’s expansion of its upstream, refining and petrochemical businesses.

ONGC currently has an installed solar and wind renewable energy capacity of 184 MW. ONGC is currently exploring the feasibility of offshore wind power and geothermal energy, to power low-carbon aspirations. However, ONGC is solely reliant on its fossil-based activities and this trend is expected to continue. In 2022, ONGC spent USD 3.5 million on low-carbon CapEX and R&D investment. However, this figure represents less than 0.1% of the company’s total CapEX and R&D spend in 2022.

ONGC has not committed to stop oil and gas exploration and expansion. ONGC reports its standalone emission intensities, which does not include data from its subsidiaries or joint ventures. In the last five years, ONGC’s upstream scope 1 and 2 oil emissions intensity has increased by around 1% annually, while its upstream gas intensity has remained static. ONGC’s scope 1, 2 and 3 emissions intensity has remained static over the last five years. This is far from the required 4% annual decrease needed to align with a 1.5°C pathway.

ONGC is expected to exceed its carbon budget by approximately 20% just based on its current reserves. As ONGC is targeting an increase in its oil and gas production, this figure is likely to be an underestimation. ONGC is targeting an expansion of its upstream production from 65 to 110 MMTOE, an increase in its refining capacity from 25 to 100 million metric tonnes per annum (MMTPA), and an increase its in petrochemical capacity from 3.8 to 9.5 MT, all by 2040. This is majorly inconsistent with a 1.5°C decarbonisation 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 low-carbon 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 educational opportunities for workers and affected stakeholders. For instance, it contributes to training teachers to benefit youth, and has a range of training opportunities for staff. 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 training programs that aim to include women and supporting education for students with economic needs. 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. 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 of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and supply chain. Moreover, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities.

The company commits to respecting the health and safety of its workers. Additionally, it discloses some information about the diversity of its workforce and has a public commitment to women’s empowerment. However, the company can strengthen its disclosure on most decent work issues including its living wage practices and working hours practices.

The company commits to protecting personal data, and it specifies that it does not make political contributions. Additionally, the company has a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. However, the company can strengthen its disclosure on these and other key ethical business topics.