Investors acting as part of Climate Action 100+ (CA100+) have welcomed the decision by Petrobas to join the Oil & Gas Methane Partnership 2.0 (OGMP), pledging to reduce its methane-emissions intensity by 55% across upstream operations by 2025.
The OGMP is an initiative coordinated by the UN Environment Programme and the Climate and Clean Air Coalition, and looks to drive the oil and gas industry to make deep reductions in methane emissions over the next decade. A key requirement of the OGMP is a commitment to a measurement-based reporting framework for methane emissions from the oil and gas sector.
Asset managers that have been engaging with Petrobas over its emissions include Federated Hermes, which reported in May 2022 that it is working with the firm on governance of its subsidiaries and joint ventures and issues such as board composition and effectiveness.
However, according to CA100+’s own net-zero company benchmark, Petrobas is still failing to hit key climate targets. Of the CA100+’s ten indicators of a net-zero pathway, the company has only achieved one, issuing reports aligned to the Task Force on Climate-Related Financial Disclosures (TCFD).
Petrobas has currently failed on three others: it has no full decarbonisation strategy, no capital alignment to net zero, and no concrete climate policy engagement, according to CA100+.
Erin Bigley, chief responsibility officer at asset manager AllianceBernstein, said: “Committing to the OGMP 2.0 was a key focus for our engagement with Petrobras in 2022, and it’s an area where the company clearly demonstrated to us that they are serious about making real, tangible progress in addressing material risks and opportunities to their business stemming from climate change.”
Petrobas is also developing a new Board of Renewable Energy, which will be considered “in due course” by the executive board. It has also set a commitment to become net zero in Scopes 1 and 2 by 2050.
Committing to the OGMP 2.0 was a key focus for our engagement with Petrobras in 2022.
OGMP
Data collected from the OGMP 2.0 framework will be integrated into the UN’s International Methane Emissions Observatory. This serves as the key implementing vehicle for the Global Methane Pledge, a major multinational agreement for methane-emissions mitigation that aims to reduce global methane emissions by 30% by 2030.
According to the Environmental Defense Fund, a partner of the OGMP, the oil and gas industry, which is responsible for 25% of global human-made methane emissions, also offers “straightforward and affordable” reduction opportunities.
Petrobras is one of the largest producers of oil and gas in the world, primarily engaged in exploration and production, refining, energy generation and trading. The Brazilian state holds 36.75% of the share capital, but 50.50% of the voting rights.
Harry Granqvist, senior climate analyst at Nordea Asset Management, said: “Nordea will, along with other key investors as part of ClimateAction 100+, continue to closely follow the company’s [Petrobas’s] implementation of the OGMP 2.0 framework.”
In October last year, the Australian government announced that it would be joining the “Global Methane Pledge”. The pledge is a voluntary commitment to reduce methane emissions in sectors such as energy, waste management and agriculture. While not a signatory to the pledge, the nation of Brazil has set its own methane reduction pledge following the COP 26 climate conference in Glasgow in 2021.
