Transatlantic divide in oil and gas companies leaves European firms better prepared to weather low-carbon economy than those from US

Francesca Washtell
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European companies have embraced alternative energy investments more than US firms (Source: Getty)

European oil and gas majors are significantly more prepared for a low-carbon future than their US counterparts, according to CDP.

A shift towards gas, investments in alternative energy sources and wider climate governance has created a transatlantic divide, a report from the not-for-profit group, which works with corporations to disclose their carbon emissions, found.

In an analysis of a $1.4 trillion (£1.1 trillion) grouping of publicly-listed oil and gas companies, the best-performing firms on carbon-related measures were Norwegian group Statoil, Italian Eni and French oil major Total.

Read more: Oil major Total pumps $300m into solar power at its service stations

Canadian group Suncor and US oil behemoths ExxonMobil and Chevron were the worst-performing, in a wider trend that CDP warned could leave US companies "left behind".

Saudi Aramco, Rosneft and PetroChina did not respond to CDP's climate survey.

"On both sides of the Atlantic international oil and has majors need to look at how they fit into an energy system which achieves the climate goals laid out in the Paris Agreement," said Tarek Soliman, senior analyst in investment research at CDP.

Our research shows that European companies have been more active in developing transition strategies for the coming decade – which is expected to feature peak oil demand – and are starting to implement these.

But more needs to be done across the board by oil and gas companies in exploring their future options, and investors will want to monitor this through more thorough and consistent disclosure.

Read more: Autumn Statement: What's in store for energy, fuel duty and North Sea oil

The oil and gas industry accounts for approximately 50 per cent of global carbon emissions. As international efforts to halt climate change intensify, companies in the sector will need to implement drives to diversify their asset mix and/or managed declines in the coming decades, CDP said.

Last week, the International Energy Agency warned the world could reach peak oil and face a supply shortage within years, leaving undiversified companies more vulnerable.

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