ExxonMobil appointed a climate-minded activist investor to its board of directors after investment firm Engine No. 1 called on the American oil and gas giant to overhaul its board with expertise on climate change to drive its industrial transformation. The current business model is exposed to “immense risk” in the global realignment toward cleaner energies, Engine No. 1 said. In Europe, British oil and gas firm BP aims to become an “integrated energy company” and pledged to reduce its oil and gas production by over 40% by 2030.

There has been no such comparable trend in the Gulf. Saudi Aramco, the region’s largest state-owned oil company, did not include emissions from many refineries and petrochemical plants in its self-reported carbon footprint, misleading investors’ climate risk assessments. Aramco is “one of the few large, listed oil companies” that does not disclose Scope 3 emissions — produced when customers use its fuels — which typically account for “more than 80%” of oil companies’ total emissions,” Bloomberg reported. The emission rates make Aramco a world leader in carbon emissions.

Saudi Aramco did not respond to a request for comment..

“I have no regrets; it is a minor factor about how I think about Aramco,” said Saleh Al Omar, a Saudi retail investor who bought shares of Saudi Aramco during its initial public offering in 2019.

He told Al-Monitor carbon disclosures are “really not a factor” for Saudis who invest in the local stock market. Moreover, the government sponsoring the IPO had convinced him that shares would be “protected” from any significant downtrend.

Aramco’s disclosures nonetheless exceed the standards for regional and non-Western producers. “There is way more transparency from Aramco than any of the other oil and gas companies in the Gulf,” Jim Krane, energy fellow at Rice University’s Baker Institute, told Al-Monitor. Oman’s largest oil producer, Petroleum Development Oman, did not respond to a request for comment.

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“Saudi oil is cleaner than oil produced in America.”

Saudi Aramco and other Gulf producers are unlikely to face pressure from the US administration for further disclosures despite US President Joe Biden’s pledge to “lead the world to address the climate emergency.”

Indeed, the Saudi oil giant could reply that its oil is “probably the cleanest source of petroleum on earth,” implying that “Saudi oil is cleaner than oil produced in America,” Krane said.

Despite Saudi Aramco having produced 4.38% of the world’s carbon emissions since 1965, drilling a barrel of Saudi oil generates significantly fewer emissions than other producers — half that in the United States — Aramco’s IPO prospectus shows.

“It is not something I would expect the Biden administration to highlight,” Krane said.

A US State Department spokesperson told Al-Monitor the United States is “engaging the rest of the world — bilaterally and multilaterally — to step up climate action” and will therefore also “engage with the Kingdom of Saudi Arabia” on this issue.

Saudi Aramco was added in November 2020 to a list of 167 companies targeted by Climate Action 100+, one of the world’s leading investor groups. It aims to push companies responsible for much of the world’s greenhouse gas emissions to take action on climate change, including emissions cuts and improved climate-related disclosures.

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