* Repsol targets net zero carbon emissions by 2050
* Investors urge other energy firms to follow suit
* Oil majors' carbon emissions: https://tmsnrt.rs/2l6A9v0
By Ron Bousso and Simon Jessop
LONDON, Dec 4 (Reuters) - Investors cheered Spanish group
Repsol's pledge to slash net carbon emissions to zero
by mid-century, saying they hope it will pile pressure on rival
oil and gas companies to follow suit in the fight against
climate change.
The world's top oil and gas companies are under heavy
pressure, not only from environmental groups but also from
institutional investors, to fall in line with targets set in the
2015 Paris climate agreement to limit global warming.
Repsol on Monday became the first leading energy firm to
commit to a net-zero emission target, outdoing Royal Dutch Shell
that had set out an ambition to halve emissions by
2050.
"It is clear that this is a very significant commitment from
Repsol that raises the bar across the oil and gas sector," said
Adam Matthews, Director for Ethics and Engagement at the Church
of England Pensions Board, who co-led discussion between a major
group of investors with Shell on a climate resolution last year.
Several companies set short-term targets to reduce emissions
by limiting gas leaks and burning of excess gas, but none have
set out long-term reduction targets before Repsol.
"We have been pressing fossil fuel companies to commit to
align with a net zero emissions pathway by 2050 for some time.
It is good to see Repsol showing this leadership, including
clear milestones along the way," said Natasha Landell-Mills,
head of stewardship, Sarasin & Partners.
"In the end, shareholders need to know their companies are
looking forward, not back, when it comes to the energy
transition." Sarasin & Partners manages 14.3 billion pounds
($18.35 billion) in assets.
For a Factbox on current targets of the largest oil
companies, click here
CARBON STORAGE
Repsol's targets encompass 95% of all its emissions,
including from fuels sold to clients. It also wrote down 4.8
billion euros ($5.3 billion) in the value of its oil and gas
assets to reflect its lower oil and gas price outlook.
Net-zero targets are generally expected to be achieved by
offsetting emissions through investments in carbon storage
technology or in natural sinks such as forests.
Companies are also increasing production of natural gas, the
least polluting fossil fuel, as well as renewable power such as
solar and wind, whose consumption is expected to
jump in coming decades as demand for electricity grows.
Repsol said it would sharply increase its low-carbon power
generation capacity by 2030, partly by expanding its renewables
business.
Mark van Baal, head of investor advocacy Follow This, which
has taken part in a number of shareholder climate resolutions,
said Repsol was the first oil major to be "truly aligned" with
the Paris goals.
"This decision will result in a complete turnaround in
investments from exploring for more oil and gas to exploring for
new business models in renewable energy," van Baal said.
Fossil fuel burning accounts for around two-thirds of global
greenhouse gas emissions. Energy-related emissions rose by 1.7%
in 2018, according to the International Energy Agency.
"It's brilliant to have a poster child because we can all
point to that and say 'well, if they can do it, why can’t
you?'," said the head of corporate governance at a leading UK
asset manager.
($1 = 0.7794 pounds)
(Reporting by Ron Bousso and Simon Jessop; Editing by Emelia
Sithole-Matarise)
