Oil company admits climate risks in financial returns
Chevron has admitted that future regulations on climate change could lead to legal action and stranded assets, and pose significant risks to financial returns.
In its financial performance review, the energy multinational Chevron said that regulation of greenhouse gas (GHG) emissions could increase its operational costs and reduce demand for hydrocarbon and other products.
It states: ‘In the years ahead, companies in the energy industry, like Chevron, may be challenged by an increase in international and domestic regulation relating to GHG emissions. Such regulation could have the impact of curtailing profitability in the oil and gas sector or rendering the extraction of the company’s oil and gas resources economically infeasible.’
It notes that international agreements such as the Paris Agreement, and national, regional and state-level legislation that aim to limit or reduce GHG emissions are in various stages of implementation. Many have yet ...