Santos

Santos aims to reach zero scope 1 and 2 emissions by 2040. With interim targets to reduce absolute scope 1 and 2 emissions and intensities by 2030. Santos’s targets include an undisclosed level of offsets and could therefore not be assessed. Santos plans to use CCS to achieve its targets. Santos can strengthen its targets by reducing emissions through direct actions, rather than offsets. Santos should set specific scope 1, 2 and 3 emission targets to achieve its aim to reduce customer emissions by at least 1.5 million tonnes per year by 2030.

Santos is one of the few companies that has publicly reviewed the alignment of trade associations with its own climate ambitions. Santos states that it uses its position in trade associations to evolve the association’s stance on climate change and policy. However, despite these claims, Santos’s CEO is on the board of directors of the Australian Petroleum Production and Exploration Association (APPEA), which holds climate-negative positions. Santos can show leadership in this area by withdrawing from trade associations known for climate-negative positions or by actively using its position to drive support for climate policy.

Santos’ low-carbon transition plan relies on CCS in particular the completion of the Moomba CCS project in the Cooper Basin Australia by 2024. The plant is expected to capture 1.7 million tonnes of CO2 per year and produce renewable hydrogen. Santos should look to further diversify their core business to move the energy mix to low-carbon and reduce energy demand. Despite having a robust climate scenario analysis, Santos is continuing to expand hydrocarbon production, including increasing crude oil production in Alaska by 80,000 barrels a day by 2026 at its Pikka Unit.

Santos has set a target to achieve zero scope 1 and 2 emissions by 2040. The company also aims to reduce Santos and Oil Search combined scope 1 and 2 emissions by 40% by 2030. With aims to reduce its emissions intensity of scope 1 and 2 emissions by 26-30% by 2030. Santos plans to reduce customers’ emissions by 1.5 million tons of CO2 per year by 2030 through the sale of clean fuels. The company has not set any scope 3 targets.

Santos’s low-carbon transition plan focuses on emissions reductions and plans to increase the delivery of cleaner energy and fuels. Santos aims to have its large-scale carbon capture project, Moomba, online from 2024, capable of storing 1.7 million tons per year. Santos, through conversion of over 24 oil wells to solar and battery storage, will reduce operational emissions in the Cooper Basin and Queensland by 5% by 2025 (compared to 2016-2017).

The company’s investment strategy remains focused on producing clean fuels, CCS and offsetting. The company is executing phase 1 of a large-scale CCS project and plans to develop several further CCS projects. The company has introduced a combined renewable capacity of solar, wind and battery storage to increase energy efficiency across some of its Australian facilities in 2022.

Santos’s scope 1, 2 and 3 emissions intensity has declined between 2017 and 2022. In contrast to its 1.5°C pathway the company’s emissions are projected to increase over the next five years. To align with its 1.5°C pathway Santos needs to decrease its scope 1, 2 and 3 emissions intensity by approximately 4% annually. Santos’s locked-in emissions are projected to significantly exceed its scope 3 carbon budget.

Santos has set an ambitious target to achieve zero scope 1 and 2 emissions by 2040. However, the company has not committed to stop oil and gas exploration or expansion and is heavily reliant on CCS to address its emissions. The company’s CEO is on the board of directors of the Australian Petroleum Production and Exploration Association, which lobbied against requirements to report scope 3 emissions under the Environment Protection and Biodiversity Conservation Act and advocates for increased subsidiaries for exploration.

The company discloses the categories of stakeholders it engages with on a just transition, including employees, employee representative bodies and relevant government bodies. Furthermore, the company demonstrates ongoing social dialogue and meaningful engagement with affected stakeholders, through community liaisons and community forums. However, no evidence was found of the company’s commitment to engage in social dialogue with workers and unions. No evidence was found of the company undertaking low-carbon 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 its just transition planning.

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 create jobs such as apprenticeship programs and a CCS project. The company also discloses the measures it takes to ensure that these jobs embed equality of opportunity for women and vulnerable groups. It does this through programs targeted towards the indigenous population that provide jobs, and efforts to include more women in their graduate programs. However, 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 has graduate programs as well as training that targets local communities. 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 offering their training programs particularly for the local indigenous population. 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 that this extends to the ILO fundamental rights at work. Furthermore, 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 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 discloses some statistics of its workforce. However, no other evidence of the company’s policies or commitments related to key decent work issues were found in the public domain. These issues include the provision of secure, safe and healthy workplaces, where workers are fairly renumerated and have a meaningful say in decision-making.

The company has a policy prohibiting bribery and corruption and includes corresponding clauses in its contracts with business relationships. Additionally, the company discloses the income tax paid for each relevant jurisdiction. However, the company can strengthen its disclosure on these subjects as well as other ethical business topics including personal data protection and lobbying and political engagement.