Energy companies are advocating for LNG terminals across the EU and Africa.
Investors have been urged to demand increased transparency from companies on engagements with key climate-related policies to combat the global nature of anti-climate lobbying.
Using LNG advocacy in Europe and Africa as a case study, InfluenceMap noted the assessed companies have lobbied for gas exploration and LNG infrastructure in Africa, advocated for LNG imports and transportation in Europe, and weakened EU climate policies that would reduce gas demand across the bloc.
The findings are “shining a light on the need for greater transparency in regions such as Africa”, Vivek Parekh, Senior Analyst on Oil and Gas and Climate Change at InfluenceMap, told ESG Investor.
“While headquartered in Europe, many of the companies covered in the report have global business operations and strategies.
“As part of their engagement with companies around climate policy lobbying, investors should look to eliminate any direct policy engagement that seeks to weaken or undermine ambitious climate policy,” he said.
As of May 2023, BP, Eni, Equinor, GALP, Shell and TotalEnergies have collectively invested over US$80 billion in newly proposed and in-construction LNG infrastructure across several African countries, including Mozambique, Tanzania, and Nigeria. These terminals are scheduled to be completed in or after 2025, with the operational lifeline of LNG terminals in Mozambique and Tanzania expected to reach 30 years, and 25 years in Nigeria, the report said.
“InfluenceMap recognises that this represents only the ‘tip of the iceberg’ and that companies frequently engage in undisclosed ‘behind closed doors’ advocacy,” it added, noting there is “limited transparency” of policy engagement activities by European energy companies looking to promote fossil fuel investments in Africa due to the absence of effective disclosure frameworks at the public sector level.
“Currently, it is clear from the research that these companies are not providing full accounts of their advocacy and climate policy engagement across these regions in their disclosures to investors,” said Parekh.
The think tank identified “significant access” to African policymakers from members of the European oil and gas industry.
This included Eni CEO Claudio Descalzi meeting with African policymakers from Algeria, Côte d’Ivoire, Egypt, and Republic of Congo between January 2022 to January 2023. There is no publicly available record of the positions Eni lobbied for during these meetings, the report said.
From Africa to the EU
Corporates’ lobbying activities serves as a barrier to Africa’s climate transition, according to InfluenceMap.
Last year, a report by think tank Carbon Tracker noted that African countries are too dependent on fossil fuel exports. As a result, they are exposed to longer-term energy insecurity and economic instability, as profits from fossil fuels will halve by 2040, due to the world’s transition to clean energy, Carbon Tracker said.
In contrast to the continued investment in fossil fuels, Africa is only receiving 12% of the finance is needs to transition to net zero, research by think tank Climate Policy Initiative (CPI) warned, noting that the continent requires around US$250 billion a year to install the necessary greener technologies and climate resilient infrastructure.
Alongside securing LNG terminals in Africa, the 15 European energy companies analysed by InfluenceMap are lobbying to secure new long-term LNG infrastructure and supply contracts across the EU, collectively investing at least US$13 billion on LNG import infrastructure across the bloc.
These EU-based lobbying efforts from energy companies targeted Germany, prompting the country to introduce the LNG Acceleration Act, which has enabled 12 new LNG projects to be approved, the InfluenceMap report said.
Only E.ON and Enel – both of which have ownership shares in new LNG terminals in Europe – have focused some advocacy efforts on supporting ambitious EU climate policy to transition away from fossil gas solutions to renewable energy solutions, it added.
The International Energy Agency’s (IEA) Net Zero by 2050 roadmap has stated there must be no fossil fuel gas fields beyond those already committed to from 2021, with global demand for fossil gas needing to fall by more than 5% per year on average during the 2030s, if the world is to limit global warming to 1.5°C.
The whole picture
“They have asked companies to provide detailed disclosures of their direct and indirect corporate lobbying on climate change,” said Parekh.
“That ask is not limited to Europe.
“Investors only looking at a company’s European climate lobbying may miss a significant part of the picture.”
Last year, the Global Standard on Responsible Climate Lobbying framework was developed and launched by a group of asset owners and managers, including Swedish pension scheme AP7 and the Church of England Pensions Board.
The standard introduces a 14-point plan for corporates, including assigning responsibility at a board level for oversight of climate-related lobbying.
The InfluenceMap report noted that the standard’s ‘Indicator 6’ requests an annual review of policy engagement “across all geographies”.