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BP, Shell and co. hand bosses £15m in environmental bonuses

Aug 08, 2023

Revealed: Major oil companies rewarded bosses for hitting climate targets despite continuing to pump oil and gas

The 'big six' oil companies handed out £15m in bonuses to executives for hitting environmental targets last year

Andy Buchanan - WPA Pool/Getty Images

The world's biggest oil companies handed executives nearly £15m in bonuses for hitting climate targets last year despite continuing to pump fossil fuels, openDemocracy can reveal.

Not one of the ‘big six’ – US firms Chevron and ExxonMobil, UK-based Shell and BP, Italian company Eni and France's Total – failed to pay out the bonuses, which related to combating climate change and transitioning to greener energy.

The companies made a combined profit last year of hundreds of billions of pounds.

Think tank Common Wealth warned that Chevron, ExxonMobil and Total are the "biggest offenders when it comes to doubling down on oil and gas production", and accused all six of setting easily met sustainability targets that failed to acknowledge "the urgency of the climate crisis".

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Analysis by financial think tank Carbon Tracker in December found BP was the only fossil fuel company planning to cut back on oil and gas production by 2030, and even that target has now been scaled back from a 40% reduction to a 25% reduction.

In November, German NGO Urgewald warned that oil and gas companies’ plans for a "frightening" expansion of fossil fuel projects would result in 115 billion tonnes of CO2 being pumped out – equivalent to more than 24 years of US emissions.

BP awarded its executives – including CEO Bernard Looney – a bonus for reducing the company's in-house CO2 emissions by seven million tonnes. Although that target was achieved, it was almost exactly counterbalanced by an increase in the amount of CO2 emissions from the burning of the fossil fuels BP sells, meaning the firm's emissions were almost identical in 2021 and 2022 (340 million tonnes of CO2).

Levels of transparency on the size of bonuses varied. Total and Eni released a total figure paid to all its senior executives (but did not list how many there were), but Shell and BP seemingly only published figures for their chief executives and chief financial officers, not all senior executives.

This means that while openDemocracy's findings suggest £14.9m worth of bonuses were awarded to senior executives for environmental reasons, the true figure is likely higher.

By openDemocracy's count, ExxonMobil gave the most in environmental bonuses with roughly £5.4m split between three executives. It was followed by Eni, which reported £2.58m worth of bonuses between its executive team.

Next was Total on £2.2m, followed by Shell and BP, which gave £2.03m and £2.029m respectively to their CEO and CFOs. In last place was Chevron which split £721,000 between five senior executives for their efforts.

Common Wealth director of research Adrienne Buller told openDemocracy: "Three of these firms are among the biggest offenders when it comes to doubling down on oil and gas production at the expense of our prospects for meeting net zero. These firms’ investment plans flatly contradict the recommendations of the IEA and ignore the urgency of the climate crisis, while rewarding executives and shareholders."

Buller added: "Our energy system is geared toward extracting wealth, rather than sustainably meeting our energy needs. It needs to be radically reimagined."

Among the six companies, ExxonMobil's chief executive Darren Woods pocketed the biggest bonus of over £5.1m. A quarter of that, according to ExxonMobil's filings to the Securities and Exchange Commission, was for hitting green targets – the highest bonus of that kind.

Total's chief executive and chair, Patrick Pouyanné, came second. He netted a bonus worth more than £2.1m, £816,000 of which was for hitting green targets.

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Pouyanné was followed by the chief executives of Eni (£486,259 out of a total bonus of £1.7m), Shell (£466,200 of £2.6m total), BP (£343,070 of £2.3m total) and Chevron (£267,000 of £3.6m total).

Overall, the six firms gave their CEOs a combined bonus pot of £17.5m, of which more than £3.6m was for hitting goals nominally related to protecting the environment.

The world's major oil companies have been repeatedly lambasted for failing to adequately deal with the scale of CO2 they emit each year.

Shell was ordered by a Dutch court to cut carbon emissions by 45% by 2030 after its environment and sustainability policy was found to be insufficiently "concrete", but has lodged an appeal.

Common Wealth found in the first three months of 2023, Shell spent over 14 times as much on shareholder compensation as on investments in its ‘Renewable and Energy Solutions Division’. It revealed that Shell and BP together distributed £176bn to shareholders between 2013 and the first quarter of 2023.

BP and Shell responded to openDemocracy to confirm the accuracy of our figures, but did not comment on why they gave out the bonuses or how they decided on their targets, though the spokesperson for BP said this year's bonuses would be partly assessed on the company's progress toward net zero in-house emissions in 2050.

Chevron and ExxonMobil referred us to the annual accounts. At the time of publication, Eni and Total had not replied to our request for comment.

From coronation budgets to secretive government units, journalists have used the Freedom of Information Act to expose corruption and incompetence in high places. Tony Blair regrets ever giving us this right. Today's UK government is giving fewer and fewer transparency responses, and doing it more slowly. But would better transparency give us better government? And how can we get it?

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Hear from:

Claire Miller Data journalism and FOI expertMartin Rosenbaum Author of ‘Freedom of Information: A Practical Guidebook’; former BBC political journalistJenna Corderoy Investigative reporter at openDemocracy and visiting lecturer at City University, LondonChair: Ramzy Alwakeel Head of news at openDemocracy

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