YPF

YPF has set targets to achieve zero scope 1 and 2 emissions by 2050 and to reduce its scope 1 emissions intensity by 30% by 2026, compared to 2017. Additionally, it has targets to reduce its methane emissions by 10% by 2026 and by 30% by 2030, compared to 2021. However, the company should also set clear targets covering scope 3 emissions, as well as interim targets no more than five years apart leading up to a net-zero target covering all emission scopes. Setting regularly spaced intermediate targets will help the company incentivise near-term actions on its long-term goals

YPF operates a profitable low-carbon business model through its renewable energy subsidiary YPF-Luz. Nevertheless, this business accounts for only 0.2% of the company’s revenue. The company should continue to invest in its solar and wind activities, while scaling down its oil and gas operations, to allow for a successful low-carbon transition aligned with a 1.5°C scenario.

YPF has not committed to stopping oil and gas exploration and expansion. In fact, the company plans to double its crude oil production and increase fossil gas production by 1.5 times between 2021 and 2026. The company has been listed in the ‘Investing in Disaster’ report by Oil Change International, which names the companies involved in projects with the greatest current and projected emissions from extraction. This does not align with the International Energy Agency’s (IEA) Net Zero Emissions (NZE) by 2050 Scenario, which does not allow for any expansion of producing assets beyond those sanctioned earlier than 2022. Furthermore, the company is already set to exceed its 1.5°C carbon budget by over 20% between 2022 and 2050.

YPF has set a target to achieve zero scope 1 and 2 emissions by 2050 compared to 2017. The company has set an interim scope 1 emissions target of a 30% reduction in intensity by 2026 compared to 2017. YPF also has methane targets, aiming for a 10% reduction by 2026 and a 30% reduction by 2030, compared to 2021. Additionally, it has set a target for zero routine flaring by 2030.

YPF’s strategy centres on the monetisation of crude oil until 2035. The company views fossil gas as a transition fuel and plans to focus revenue generation on fossil gas from 2027 to 2050. From 2030 onwards, the company plans to focus on hydrogen using renewable energy (green hydrogen), lithium and “other clean energies”. Although the company does have renewable energy operations, they are not central to YPF’s transition plan. YPF also does not disclose its current or planned investment in green hydrogen and lithium.

YPF invested USD 70 million into low-carbon technology in 2021, focused on solar and wind energy projects. However, in the same year it also invested USD 2.5 billion into fossil fuel expansion. To reduce its scope 1 emissions, YPF has focused on reducing methane venting and flaring, as well as deploying methane emissions detection pilot projects. It also has a 397 megawatt (MW) capacity of renewable energy from solar and wind projects. However, this forms a negligible share of its energy mix.

YPF’s scope 1 emissions intensity and absolute scope 1 and 2 emissions have decreased between 2018 and 2021. However, the company’s absolute scope 3 emissions have increased by 13% between 2020 and 2021. YPF is also expected to exceed its 1.5°C carbon budget by over 20% between 2022 and 2050 due to locked-in emissions. The company has not reduced either its scope 1 and 2 or its scope 1, 2 and 3 emissions intensity in line with its 1.5°C pathway.

YPF’s transition plan is undermined by the lack of a scope 3 emissions reduction target and net-zero targets. This is especially pertinent as the company’s scope 3 emissions were almost four times higher than its combined scope 1 and 2 emissions in 2021. YPF does have profitable activities in renewable energy, but these constitute a negligible amount to its overall business. Critically, YPF views fossil gas as a long-term transition fuel and plans to double its crude oil production between 2021 and 2026. This shows a critical lack of urgency on the company’s part to transition.

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 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 actions 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 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. However, no evidence was found that it commits to respecting the ILO fundamental rights at work and that it expects the same commitment of its business relationships. 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. Furthermore, 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. 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 discloses some indicators of workforce diversity, including the age and gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. The company commits 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. No relevant disclosure was found of the company’s global tax strategy and 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. While the company specifies that it does not make political contributions, no evidence was found that the company has a lobbying and political engagement policy. No relevant disclosure was found of the company’s expenditure on lobbying activities.