Assessment of oil and gas company emissions targets evaluates their potential alignment with the goals of the Paris Agreement, providing an indication of strategic compatibility with the energy transition.
Investors must rapidly come to grips with climate-related risk on multiple fronts. As average global temperature rise approaches 1.5°C, the physical impacts of climate change are becoming increasingly apparent—with significant costs to investment portfolios and the broader economy. Meanwhile, the 2026 energy crisis is further incentivising the global shift to clean energy systems on economic and energy security grounds—weakening the long-term investment outlook for fossil fuels.
Against this backdrop, investors must be able to decipher which oil and gas companies aim to be compatible with a future energy system vastly different to the status quo. An oil and gas emissions target analysis provides decision-useful information for both climate and financial risk perspectives:
- For investors with a climate mandate or other climate interests, this analysis provides a view of potential Paris alignment of emissions targets for a sector that must reduce emissions significantly if society is to limit average global warming to well below 2°C.
- For those without a climate mandate, targets can signal exposure to declining demand for oil and gas (and associated commodity price impacts) over the long term, as the energy transition unfolds. Oil and gas emissions targets can be viewed as a proxy for oil and gas production plans, where strong and credible targets suggest production depletion over time. Additionally, targets can signal the extent to which a company is contributing to global temperature rise and, by extension, lower returns across the broader investment portfolio via climate-related physical impacts.
Absolute Impact 2026 offers a current view on the greenhouse gas (GHG) and methane-specific targets of 30 of the world’s largest oil and gas companies:
- Assessing targets against Carbon Tracker’s Hallmarks of Paris-Aligned Emissions Targets framework for potential Paris alignment.
- Ranking against peers.
- Identifying recent updates and trends since Q4 2024.
- Shining a light on the delivery gap between emission reduction targets and strategies.
The analysis provides decision-useful information to portfolio managers, analysts, policymakers, standard-setters, and regulators, investigating how targets stack up against peers and where they fall short. It is particularly relevant for investors attending the 2026 annual general meetings (AGMs) of companies such as bp and Shell, where shareholder resolutions examine how the companies are preparing for a scenario of declining long-term demand for oil and gas.
Investors should view this emissions targets analysis alongside analyses of metrics such as production and investment plans, commodity price/demand forecasts, and remuneration plans:
- To test whether a company’s targets are consistent with its actions and broader strategy—as discussed in Carbon Tracker’s Oil and Gas Transition Plans User Guide.
- To holistically understand a company’s transition risk profile and Paris alignment—the latter of which has been assessed by Carbon Tracker’s Paris Maligned series in previous years.
