Tuesday 12 February 2019

Oil giant Chevron ties executive pay to emissions reductions

Oil giant Chevron has announced plans to set greenhouse gas emissions targets and tie compensation for executives and “nearly all other employees” to the reductions.

It is the latest energy company to bow to pressure from investors and provide more insight on climate change governance.

Chevron aims to reduce methane emissions by 20% to 25% and flaring intensity by 25% to 30% between 2016 and 2023 – the intensity will be measured based on the company’s equity ownership of oil and gas assets, not just the projects over which it has operational control.

The company has also created an Environmental, Social and Governance (ESG) team, which regularly engages with investors and other key stakeholders to understand and respond to ESG reporting preferences.

Michael Wirth, Chevron’s Chairman and CEO said: “This update highlights work we are doing to address climate change risks to our business and new opportunities we’re pursuing. It incorporates responses to some of the thoughtful insights stockholders have shared with us during our engagements.

“We look forward to ongoing conversations on how we are managing climate risks to our business and taking on new opportunities to reduce greenhouse gas emissions and develop lower carbon energy.”

Last year, the company joined the Oil and Gas Climate Initiative, a global collaboration focused on industry’s efforts to address climate change issues.

BP also recently pledged to add emissions reductions as a factor in the reward of 36,000 of its employees, including executive directors.