Occidental Petroleum

The company has set an ambitious target to achieve zero scope 1 and 2 emissions by 2040. It also has a comprehensive net-zero target for scope 1, 2 and 3 emissions by 2050. However, these targets could not be assessed as it is unclear what percentage of the targets the company plans to achieve through offsets. Occidental has not set any interim targets to reduce its scope 3 emissions. The company should set intermediate targets no more than five years apart to incentivise near-term action on its long-term goals and ensure that it is aligned with a 1.5°C scenario.

Occidental has made some progress in reducing its scope 1, 2 and 3 emissions intensity, having increased the proportion of gas in its production from 2018 to 2021. However, the rate of reduction does not align with the company’s 1.5°C pathway, and the company is not projected to see significant reductions in its intensity over the next five years. To align with its 1.5°C pathway, the company should aim to reduce its scope 1, 2 and 3 emissions intensity by an average of around 4% per year between 2021 and 2026.

Occidental is making significant investments in carbon removal technologies. In many 1.5°C scenarios, carbon removals play an important role in reaching net zero by 2050. The company has one DAC plant currently under construction, which will be operational by mid-2025 and is expected to be the largest such facility in the world with the capacity to capture 500,000 tonnes of carbon dioxide per year. The company states that it plans to build up to 100 plants by 2035. It can improve the credibility of its plans by providing further details of the deployment schedule of future facilities as well as quantified targets for annual capture capacity and financial commitments.

Occidental has set a target to reach net-zero scope 1, 2 and 3 emissions by 2050. The company has also set a target to eliminate its scope 1 and 2 emissions by 2040. Further, Occidental has set interim targets for its scope 1 and 2 emissions, but it has not set any interim scope 3 targets.

Occidental’s plan identifies four levers for the company to achieve its transition. The company plans to reduce its operational emissions by installing renewable capacity, reducing methane leakage and flaring, and putting in place efficiency measures. Next to this, it plans to develop its DAC business to sell carbon credits and to produce “net-zero oil” and other low-carbon products. The company also plans to implement and provide advice on point-source CCS projects for its clients.

Occidental is currently constructing a DAC facility which it expects to be the largest in the world when it is completed in 2025. It is also developing CCS projects for its partners, reducing both routine and non-routine flaring, using hydrogen (produced as a byproduct from chemical processes) as fuel at its chemical facilities and implementing other methane reduction and energy efficiency measures.

There is no evidence to suggest that Occidental has reduced its scope 1 and 2 emissions intensity over the last three years. The company has made some progress in reducing its scope 1, 2 and 3 emissions intensity. This is likely due to an increase in the proportion of gas in the company’s energy mix. In May 2023, the company started work on its new DAC facility, Stratos.

Occidental has ambitious plans to position itself as an expert in carbon management through its investments in DAC and the expansion of its business models to offer CCS services and consultation to clients. However, the company is currently expanding its oil and gas production and continues to explore for new oil and gas. The company is projected to exceed its 1.5°C carbon budget by over 70% for the period 2022 to 2050.

The company commits to engaging in social dialogue with workers and unions. It also discloses the categories of stakeholders it engages with on a just transition, including low-income consumers, energy workers and energy-producing communities. However, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in just transition planning.

The company discloses the actions it takes to invest in hiring and developing a diverse workforce for its low-carbon businesses. However, no public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company discloses the actions it takes to provide training opportunities for workers and affected stakeholders. For instance, it provides a variety of computer skills training for its engineers. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to reskill or upskill.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

While the company commits to respecting human rights and the ILO fundamental rights at work, no evidence was found that it expects its business relationships to respect the ILO fundamental rights at work. No evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and in its supply chain. Moreover, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders.

While the company commits to respecting the health and safety of its workers, no evidence was found that it expects the same commitment of its business relationships. Further, no evidence was found of the company having a time-bound target for paying all workers a living wage. No evidence was found that the company discloses the proportion of its direct workforce covered by collective bargaining agreements or its required working hours. The company discloses the race/ethnicity of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. No evidence was found that the company commits to gender equality and women’s empowerment.

The company commits to protecting personal data. However, no evidence was found of the company having a privacy statement regarding the collection, sharing and access to personal data. No relevant disclosure was found of the company’s global tax strategy and the corporate income tax it pays in each relevant jurisdiction. While the company has a policy prohibiting bribery and corruption, no evidence was found that it includes corresponding clauses in its business relationship contracts. No evidence was found that the company has a lobbying and political engagement policy and that it specifies that it does not make political contributions. Moreover, no relevant disclosure was found of the company’s expenditure on lobbying activities.