Chevron announced Tuesday it expects to write down the value of its assets between $10B and $11B this quarter. The second-largest U.S. oil company blamed an age of abundant oil and gas, saying its holdings won’t be profitable anytime soon.
Spanish oil and gas company Repsol announced last week a write down of more than $5B. The difference between the two companies is that Respsol’s announcement was made in conjunction with a business plan for achieving net zero emissions by 2050. Repsol’s announcement not only acknowledged the need to keep global temperature rise well below 2 degrees Celsius, but provided a plan for how it would help the world make that transition a key to success in a radically changing market.
Investors have been increasingly concerned about the future of oil and gas companies, their massive contribution to climate change, and whether and how they will adjust their enterprises to succeed in a low-carbon economy.
Danielle Fugere, president of As You Sow, made the following statement:
“Chevron’s announcement demonstrates that companies must proactively address changing energy markets. Companies that fail to plan for a net-zero world will inevitably get caught — and investors will pay the price in unplanned write downs and an economy battered by massive climate impacts. Business as usual, even efficient business as usual, is wholly insufficient in a market that is, and must, fundamentally change.”
Lila Holzman, energy program manager of As You Sow, made the following statement:
“This write down is a signal of much greater troubles to come in the oil and gas industry. Energy companies must start demonstrating now how they are planning to fully align with the Paris agreement to proactively adapt to the transition.”
For more information on As You Sow’s work on energy, click here.
As You Sow is a nonprofit organization that promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, and innovative legal strategies. See our resolutions here.