Pemex

Pemex states it aligns with Mexico’s Nationally Determined Contribution, which includes a 14% reduction in greenhouse gas (GHG) emissions by 2030 compared to a business as usual (BAU) scenario, for the oil and gas sector. However, the company does not specify the scope of emissions or activities included in this target, meaning it cannot be assessed. Improved disclosure will allow for this assessment. Pemex has also set several annual emissions intensity targets between 2020 and 2027. However, the company’s reported emissions intensities for 2021 illustrate Pemex is not on track to meet these targets. To improve, 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 further intermediate targets at gaps of no more than five years to incentivise near-term action on longer-term goals.

Pemex’s current transition plan lacks significant detail. The company can improve by integrating climate change oversight and expertise at a strategic level and then developing a time-bound action plan that outlines how it will transition to a low-carbon economy. This should include medium and long-term targets, verifiable and quantifiable key performance indicators and financial commitments. The plan should be informed by scenario analysis to ensure that the plan’s ambition is sufficient for a 1.5°C pathway.

There is no evidence that Pemex is developing business activities that would enable the company to decouple financial results from greenhouse gas emissions. Pemex reports the implementation of operational controls and infrastructure maintenance programs to reduce fuel consumption; implementation of gas usage projects to reduce gas flaring; as well as rehabilitation and maintenance of infrastructure to reduce flaring. However, these all constitute modifications to the existing business model, resulting in reduced scope 1 and 2 emissions, but will not significantly reduce the bulk of the company’s emissions.

Pemex states it aligns with Mexico’s Nationally Determined Contribution, which includes a 14% reduction in GHG emissions by 2030 compared to a BAU scenario, for the oil and gas sector. However, the company does not specify the scope of emissions or activities included in this target. Between 2020 and 2027 the company also aims to reduce the emissions intensity of its upstream segment by 56%, the emissions intensity of its oil refining by 41% and the emissions intensity of its gas processing by 34%.

Pemex does not have a transition plan. It reports it plans to modernise its gas processing plants to reduce burning and venting of gas. The company has also evaluated whether it could start investing in carbon capture and storage (CCS), but no clear plans are in place to implement CCS.

There is limited evidence that Pemex is investing in research and development of climate change mitigation. The company does not report working with suppliers or clients to reduce value chain emissions. The company has not yet developed new business models that will substantively reduce its emissions.

Pemex’s scope 1, 2 and 3 emissions intensity increased between 2017 and 2021. The company’s emissions intensity is projected to remain static between 2021 and 2026. This is not aligned with the company’s 1.5°C pathway, which requires the company to decrease its scope 1, 2 and 3 emissions intensity by approximately 4% annually.

As a state-owned company, Pemex is aligned with Mexico’s oil and gas emissions reduction targets but has not set ambitious long-term targets of its own. The company lacks both a clear transition plan and viable business models to significantly reduce its emissions. Instead, Pemex is seeking to reverse its trend in product decline through the rapid development of new oil fields.

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 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. No public commitment by the company was found stating its intention to reskill and upskill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company reskills and upskills 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.

No evidence was found that the company commits to respecting human rights and the International Labour Organisation (ILO) fundamental rights at work and that it expects its business relationships to respect the ILO fundamental rights at work. Moreover, 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. 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.

While the company commits to respecting the health and safety of its workers, no evidence was found that it expects the same commitment of its business relationships. No evidence was found of 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. Moreover, no relevant disclosure was found of additional indicators of workforce diversity. No evidence was found that the company commits to gender equality and women’s empowerment.

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. No relevant disclosure was found of the company’s global tax strategy and the corporate income tax paid for each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. While the company specifies that it does not make political contributions, no evidence was found that it has a lobbying and political engagement policy. No relevant disclosure was found of the company’s expenditure on lobbying activities.