Graduates in gown and caps celebrate their graduation at the HHL Leipzig Graduate School of Management on August 30, 2014 in Leipzig, Germany. (Photo by Jens Schlueter/Getty Images)
A new Thomson Reuters/BSD Consulting “Global 500 Greenhouse Gas Report: The Fossil Fuel Energy Sector” shows that energy companies emitted 31 per cent of total GHG emissions globally from their operations as well as the use of the products further down the value chain on an annual basis. As the title of this study indicates, the focus was solely on energy companies from a set of the 500 largest companies in the world.
This study is a follow-up to the “Global 500 Greenhouse Gases Performance 2010-2013: 2014 Report on Trends”, published in December 2014, which looked at the corporate levels of greenhouse gas (GHG) emissions around the globe. Emissions data from the world’s 500 largest businesses showed that these companies were collectively responsible for more than 10 per cent of the world’s GHG emissions.
In particular, emissions from the top 50 companies accounted for 79 per cent of all Global 500 emissions. However, the new study is interesting because it includes in the emissions count “emissions from the overlapping networks of upstream suppliers or downstream value chains (“Scope 3”)” – i.e. specifically emissions from the use of “fossil fuel products” from the energy sector by the end user – of the largest fossil fuel producers by market capitalization and reserve size. The authors – John Moorhead (BSD Consulting) and Tim Nixon (Thomson Reuters) – provide more insight on two fundamental questions “based on GHG emissions and fossil fuel production data reported by the companies themselves, or on secondary source estimates”:
- “Who are these companies of the Global 500 at the source of this energy pipeline on which the world relies for its energy needs?”
- “How much of the world’s GHG do these companies and their value chains emit?”
As reflected in the table below – arranged in alphabetical order – analysis by the authors shows that the total – i.e. Scopes 1 (emissions through operations directly), 2 (emissions indirectly through energy procured for operations) and 3 (emissions as a result of the use of the ‘fossil fuel product’ by the end user) – GHG footprint of all companies collectively amounts to 11,747,149,883.25 metric tonnes of carbon dioxide.
Source: Thomson Reuters/BSD Consulting; please click here to enlarge table.
Gazprom (Russia) takes the cake among its energy industry peers in terms of total GHG emissions. What also stands out is that in terms of “Scope 3” inventories and thus mostly estimated emissions – the result of the combustion of fossil fuel products from sales in the past – Gazprom is held responsible for more than twice the amount of carbon dioxide emissions (1,132,907,074 metric tonnes of carbon dioxide) than, for example, ExxonMobil (529,368,800 metric tonnes of carbon dioxide).
In all 32 cases, however, energy end users will have a hard time claiming that all emissions should be attributed the energy companies and that they themselves bear no responsibility for burning fossil fuels. Obviously, examples in this respect are plentiful. Moreover, remember that it is demand in a market that creates supply because the supply curve can be interpreted as a demand curve for inputs.
Also, to put the above into context, check out the table below from Next 10’s new “California Green Innovation Index – International Edition”. This report tracks California’s economic and environmental progress by examining key economic and climate-related indicators of the top 50 GHG emitters around the globe at the country level.
Source: Next 10
