Oil majors responsible for half of global output are investing a mere three per cent of their combined capital expenditure on renewable energy sources.
According to a new report by law firm CMS, fifteen of the world’s largest oil companies, including Shell, BP, Exxon Mobil, and Saudi Aramco spent approximately $6.6bn of a combined $228bn into renewables in 2018.
European companies lead the way in terms of investment, spending an average 6.2 per cent per company, compared to 0.8 per cent from the rest of the world.
Spain’s Repsol, which announced that it would aim to reduce its emissions to net zero by 2050 in December, leads the way, investing 16.7 per cent into renewables in 2018.
The rest of the top five biggest investors are all European oil companies, with Malaysia’s Petronas sixth on the list with investments of 3.3 per cent.
The highest ranked US major is Chevron, which sits in ninth place with an investment of 1.5 per cent.
Wind and solar are by far the most common forms of renewables in which companies invest, accounting for 96 per cent of all investment.
Only the US’ Conoco Phillips has failed to invest in either.
CMS’ report, which was conducted in partnership with Capital Economics, identifies that a total $209bn could be invested by oil and gas majors by 2030 if policies and commitments to the energy transition ramp up.
Under this model, majors’ share of all investment in renewables would rise from the current 2.3 per cent to 5.9 per cent by 2030.
Munir Hassan, head of CMS energy group, said: “Oil and gas majors understand that they need to transform their business models as part of a global shift towards a more sustainable future.
“Energy transition now dominates conversations at board level. Whether it is de-carbonising their own operations or investing in alternative energy, the transition will happen. It will take time, but time is something that is in short supply.”
The report also highlights a number of factors that might limit investment in the future, including changing regulatory environments, changing technologies, and growing competition from renewable energy firms.