Shaping sustainability strategies: A comprehensive analysis of greenhouse gas reporting in the oil and gas sector and its strategic implications

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Insinööritieteiden korkeakoulu | Master's thesis
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Date

2023-10-09

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Heat and Power Engineering

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Nordic Master Programme in Innovative and Sustainable Energy Engineering (ISEE)

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en

Pages

70+1

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Abstract

The oil and gas (O&G) industry is one of the major contributors to greenhouse gas (GHG) emissions. Some companies voluntarily disclose their carbon footprint and environmental impact in their annual sustainability reports. We investigate the emission reduction targets, system boundary approaches, product mix, the scope of emissions reporting and the reported net carbon intensity (NCI) by eight O&G companies, ranging from large multinational firms to smaller regional companies. Specifically, we analyze the carbon intensity of each reported scope of emissions and 15 categories of value chain emissions (also known as Scope 3) as recommended by the GHG Protocol Standard. Our study reveals a lack of comparability in emission reporting, especially concerning emissions across the value chain. No company has reported all categories of Scope 3 emissions, and there is a great disparity in the categories reported and the progress of Scope 3 reporting among the eight companies. Category 11, involving emissions from the use of sold products, emerged as a prominent focus among the reporting entities. There is also a notable difference between the overall product mix of large multinational and smaller regional companies, in which the former has a more diversified product mix. A Strength, Weakness, Opportunities, and Threats (SWOT) analysis is conducted to unpack companies’ motivations for reporting value chain emissions. We notice that there is a lack of discussions in the company’s sustainability reports regarding the weaknesses and threats associated with GHG reporting. This research contributes to the limited literature on the comparability of emissions reporting of the O&G industry. Our study creates an inventory of GHG emission reporting of O&G companies, highlighting the need to harmonize reporting practices to facilitate comparability and enable informed decision-making by stakeholders. This thesis aims to inform reporting practices, align targets, and enhance transparency. The findings promote accountability and progress towards a sustainable energy future.

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Supervisor

Järvinen, Mika

Thesis advisor

Yeh, Sonia

Keywords

GHG emissions, oil and gas companies, value chain, net carbon intensity

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https://urn.fi/URN:NBN:fi:aalto-202310156414

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[dipl] Insinööritieteiden korkeakoulu / ENG