Press release
Net zero roadmap: committing to an absolute emissions target for the oil and gas sector
London – Standard Chartered provides an update to its net zero roadmap, committing to an absolute emissions target and trajectory for the oil and gas sector. This target sets a carbon budget that requires a 29% reduction in absolute financed emissions for the sector by 2030, when calculated from a 2020 baseline.
Our impact is greatest when we prioritise emissions reduction in those sectors with the highest carbon emissions. To achieve this, we have set an absolute financed emissions target and trajectory for the oil and gas sector, given its significance to the energy transition. This approach ensures we focus our effort in those areas most meaningful for the environment and most relevant to the Group.
Our oil and gas absolute emissions target
Our oil and gas sector target aligns with the International Energy Agency Net Zero Emissions (IEA NZE) scenario. This science-based scenario is consistent with the Paris agreement commitment to limit global temperature rises to within 1.5°C and is a recognised market standard. Employing the IEA NZE guidelines results in a target reduction in absolute financed emissions of 29% by 2030. When using 13.1 MtCO2e as the 2020 baseline data, this equates to a required reduction of 3.8 MtCO2e by 2030 for us to be in line with the trajectory.
Marisa Drew, Chief Sustainability Officer at Standard Chartered, commented, “This is an important step towards delivering on our net zero commitment. Setting this absolute sector target and supporting our clients in their transition journey are critical sustainability priorities for Standard Chartered. We believe that setting a defined intermediate goal for our oil and gas financed emissions will best help us to accelerate the energy transition, while ensuring that the transition accompanies economic development and the orderly adoption of new green solutions in our markets.”
The role of natural gas in the transition
In setting a target, it is important that we support our oil and gas clients on their transition. Transition readiness across our markets is varied, with related environmental and social challenges being particularly acute in emerging markets. To address this, we look to balance energy sustainability, security and resilience considerations, alongside affordability, as a means to support a transition that is orderly and just.
We will prioritise renewable or green energy sources wherever practical. Where the market context does not allow for a direct green transition, we will support and encourage lower emission intensity alternatives. Specifically, we believe that natural gas, including liquefied natural gas (LNG), has a role to play where it supports a reduction in overall carbon emissions. Our natural gas position is aligned with the IEA’s NZE scenario, that acknowledges the potential benefits of a switch to less emissions-intensive fuels. Specifically, the IEA point to an estimated 500 million tonnes of CO2 saved from coal to gas switching since 2010.
Facilitated emissions disclosure
Our balance sheet lending, or ‘financed emissions,’ cover the vast majority of our carbon emissions exposure. However, the additional disclosure of our capital markets activity, ‘facilitated emissions,’ will help to provide a holistic picture of our emissions profile. To that end, we are a working group member of the Partnership for Carbon Accounting Financials (PCAF). As a member we are actively involved in the development of the PCAF methodology and guidelines for facilitated emissions disclosures. The final methodology is not yet available. Once published, we intend to report on our facilitated emissions.
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For further information please contact:
Robbie Sommerville
Global Head of Sustainability Communications
Standard Chartered
+44 (0)7990 784478