Rosneft

Rosneft has improved its targets since the last benchmark assessment; however, the company still has not set any scope 3 emissions reduction targets. The company aims to reduce its scope 1 and 2 emissions by 5% by 2025 and by 25% by 2035 compared to 2020 levels and to achieve zero scope 1 and 2 emissions by 2050. Additionally, the company aims to reduce its exploration and production scope 1 and 2 emissions intensity by 33.5% by 2030 compared to 2020. Other company targets include methane intensity reduction and zero routine flaring by 2030. The company can improve further by setting scope 3 reduction targets as well and by disclosing the proportion of offsets it plans to use to achieve its targets.

Rosneft saw only a marginal decline in its scope 1 and 2 emissions intensity between 2017 and 2022. However, the company needs to deliver a nearly 9% annual decrease in scope 1 and 2 emissions intensity between 2021 and 2026 to align with its 1.5°C pathway. The company is planning to expand its upstream production by 330 million metric tonnes of oil equivalent (mmtoe) by 2030 (from 245 mmtoe in 2021). This does not align with the International Energy Agency (IEA) Net Zero Emissions (NZE) by 2050 Scenario, which does not allow for the expansion of producing assets beyond those sanctioned prior to 2022.

Rosneft has signed agreements with electric power companies for electric vehicle (EV) charging infrastructure development until 2024. The company assesses the potential of using underground storage facilities in Russia for carbon storage solutions. Additionally, it conducts feasibility studies for the use of renewable energy sources for power generation at existing and new facilities. Regardless, none of these activities is currently shaping up as a plausible new low-carbon business model for the company.

Rosneft’s scope 1, 2 and 3 emissions intensity increased between 2017 and 2021. However, to align with its 1.5°C pathway, Rosneft needs to decrease its scope 1, 2 and 3 emissions intensity by about 4% annually between 2021 and 2026. Rosneft’s locked-in emissions from current and planned assets are expected to exceed its 1.5°C carbon budget for the period 2022-2050 by about 50%.

Rosneft has set targets to reduce its scope 1 and 2 emissions by 5% by 2025, by over 25% by 2035, and by 100% by 2050, compared to 2020. The company also aims to reduce its exploration and production scope 1 and 2 emissions intensity by 33.5% (to below 20 kilograms of carbon dioxide equivalent per barrel of oil equivalent (kgCO2e/boe) by 2030 or sooner compared to 2020. It is also committed to zero routing flaring by 2030. However, Rosneft has not set any reduction targets for scope 3 emissions which account for more than 80% of the company’s total emissions.

To achieve its targets, Rosneft plans to implement its energy efficiency programme and gas investment programme focused on associated gas reinjection and utilisation. Rosneft plans to increase the share of fossil gas to 25% of the company’s total hydrocarbon production. Additionally, it plans to establish a methane emissions management system.

Rosneft states that it evaluates the possibilities of developing new technologies and low-carbon solutions. The company is engaged in some initiatives to develop biofuels and is building its EV charging infrastructure. However, the company does not report any investments in low-carbon technologies or in low-carbon research and development (R&D). Rosneft is one of the 20 companies worldwide responsible for the most oil and gas expansion from potential 2023-2025 Final Investment Decisions, by cumulative carbon dioxide emissions.

Rosneft saw only a marginal decline in its scope 1 and 2 emissions intensity between 2017 and 2022. Moreover, the company’s scope 1, 2 and 3 emissions intensity increased between 2017 and 2021. Rosneft is currently projected to exceed its total 1.5°C carbon budget by about 50% for the period 2022-2050.

Rosneft is almost completely reliant on high-carbon activities for its profits and sees the whole climate agenda as a strategic threat to its business model. The company’s chief executive officer argues that the responsibility for emissions associated with fossil fuels should not be placed on oil and gas producers. Rosneft plans to increase its oil production by 330 mmtoe. Further exploration of fossil fuel assets is unsanctioned under the IEA NZE Scenario and is inconsistent with a 1.5°C pathway.

The company commits to engaging in social dialogue with workers and unions. It also discloses the categories of stakeholders it engages with on a just transition, including employees, trade unions, suppliers and contractors, investors, and representatives of the Indigenous Peoples of the North. However, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders.

The company has a commitment to create and support access to green and decent jobs as part of the low-carbon transition. Furthermore, it discloses the actions it takes to support the employment of the indigenous population. However, no evidence was found that the company discloses the measures it takes to ensure that these jobs embed equality of opportunity for women and vulnerable groups. Moreover, 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 an in-house training system, corporate training centers and a mentoring programme 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 and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. The company also discloses a human rights due diligence process that includes the identification and assessment of salient human rights risks, such as accidents and environmental damage, violation of the employee’s labour rights, and gaps in the system of cybersecurity, reliability and security of IT systems. However, 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. The company discloses that it has managed to pay all workers a living wage and that its remuneration is based on the principles of a decent standard of living for its employees. The company also expects its suppliers to provide its employees with living wages. Furthermore, the company discloses the proportion of its direct workforce covered by collective bargaining agreements and the company’s required working hours. However, while the company discloses the gender of its workforce by employee category, 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. The company discloses its global tax strategy and the corporate income tax it pays in each relevant jurisdiction. The company also has 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. However, no relevant disclosure was found of the company’s expenditure on lobbying activities.