This chapter outlines how the energy sector, as both the largest emitter of greenhouse gases and enabler of the clean energy transition, discloses material information regarding corporate sustainability, including GHG emissions and corporate governance.
Global Corporate Sustainability Report 2025
Abstract
The energy sector – encompassing oil, gas, coal and electric power industries – is both a major emitter of greenhouse gases and a pivotal actor for deploying clean energy technologies. As governments design strategies for net‑zero emissions by mid-century, understanding how energy companies are managing the transition is crucial. Investors, too, may demand transparency and credible action plans, given the financial risks and opportunities associated with, for instance, stranded assets or the need of countries to enhance their energy security.
The energy sector is the largest source of anthropogenic GHG emissions: electricity and heat production account for one‑third of global emissions (IPCC, 2022[1])). With global energy‑related CO₂ emissions climbing to an all‑time high of 37.8 Gt in 2024 (IEA, 2025[2]), the sector’s carbon footprint remains on an unsustainable trajectory. This underscores that without a major shift in energy systems, climate goals will be missed. At the same time, the energy sector is also an indispensable part of the solution: it marshals the capital, management expertise and technological know-how needed to deploy low-carbon alternatives at scale. This chapter focuses on the energy sector, specifically its disclosure of material information related to corporate governance and greenhouse gas emissions.
At the global level, listed energy companies disclosed around 23 350 MtCO₂e emissions (of which almost 13 400 MtCO₂e were disclosed by oil & gas companies), accounting for almost a third of total emissions disclosed by all listed companies (Figure 3.1, Panel A). Despite this substantial environmental footprint, the energy sector represents only 6% of total assets of listed companies and 9% of global market capitalisation (Figure 3.1, Panels B and C). Europe reports the highest volume of disclosed GHG emissions from listed energy companies, followed by the United States, although this may also be influenced by the number and size of listed companies in each region. In China, energy companies disclosed almost 1 950 MtCO₂e in GHG emissions, representing almost a third of the emissions of the country’s listed companies.
Listed energy companies account for 31% of disclosed GHG emissions by all listed companies but represent only 6% of assets and 9% of market value, led by Europe and the United States.
Source: OECD Corporate Sustainability dataset, LSEG, Bloomberg. See Annex A for details.
Global investment in clean energy has accelerated markedly in recent years, driven by falling clean technology costs and supportive policies. In 2024, worldwide energy investment was on track to exceed USD 3 trillion, with about USD 2 trillion (two‑thirds) going into clean energy technologies and infrastructure. Solar power is a standout example: since 2015, prices for solar photovoltaic systems have decreased by more than 50% for rooftop photovoltaic and about 40% for utility-scale, making them a cost-effective option, with investment reaching close to USD 95 billion in 2024 (IEA, 2025[3]). Investment in solar, both utility‑scale and rooftop, is expected to reach USD 450 billion in 2025, making it the largest single item in the IEA’s inventory of the world’s investment spending (IEA, 2025[3]).
Making deep emissions cuts will require rapid deployment of existing clean tech and the maturing of new solutions that are not yet market ready. In fact, almost 50% of the CO₂ reductions needed by 2050 in the IEA’s Net Zero by 2050 Roadmap rely on technologies currently at demonstration or prototype stage (IEA, 2021[4]). The biggest innovation opportunities identified include next-generation batteries (for grid storage and EVs), low-cost hydrogen electrolysers, and direct air carbon capture.
Energy companies have greater control, at least in the short and medium-term, over their scope 1 and 2 GHG emissions – those arising from their own operations and purchased energy. This includes CO₂ from fuel combustion at facilities and methane released in oil & gas extraction. However, scope 3 emissions – notably those from the use of their sold products – dwarf energy companies’ operational footprints and represent the biggest challenge of decarbonisation.
The latest data on corporate sustainability disclosures of energy companies reveals regional differences in the disclosure of GHG emissions. In the United States, more than half (57%) of all energy companies disclose scope 1 and 2 emissions, and 36% disclose at least one category of scope 3 emissions. In terms of market capitalisation, Europe leads with listed energy companies representing 99% of market capitalisation disclosing scope 1 and 2 emissions, and 98% at least one category of scope 3 (Figure 3.2).
The disclosure rates of China’s energy companies are lower, with 32% of companies reporting scope 1 and 2 emissions and 9% disclosing at least one category of scope 3. The Middle East and Africa shows the lowest levels of emissions disclosure: only 20% of energy companies report scope 1 and 2 emissions, and 9% disclose at least one category of scope 3.
Scope 1 and 2 disclosures are relatively high, but many energy companies – especially in Emerging Asia, the Middle East and Africa – lag behind in scope 3 emissions disclosure.
Source: OECD Corporate Sustainability dataset, LSEG, Bloomberg, MSCI. See Annex A for details.
Globally, listed energy companies reported 5 622 MtCO₂e in scope 1 emissions (among which oil & gas companies disclosed 27% of the total emissions), almost 450 MtCO₂e in scope 2 (49% for oil & gas companies), and 17 285 MtCO₂e in scope 3 (67% for oil & gas companies) (Figure 3.3, Panels A, B and E). Total disclosed emissions by energy companies across all scopes were the highest in Europe, driven largely by scope 3 emissions, with: 596 MtCO₂e in scope 1, 55 MtCO₂e in scope 2, and 6 033 MtCO₂e in scope 3. The United States followed a similar pattern, with energy companies disclosing 1 242 MtCO₂e in scope 1, 104 MtCO₂e in scope 2, and 5 182 MtCO₂e in scope 3.
Important nuances appear in the disaggregation of GHG emissions, whether in distinguishing the individual greenhouse gases reported under scope 1, in the methodological approaches applied to scope 2 calculations, or in the breadth of value-chain activities encompassed within scope 3.
Scope 2 GHG emissions can be calculated using two methodologies under the GHG Protocol. Location‑based scope 2 reflects the average grid emissions where electricity is consumed. Market‑based scope 2 reflects the emissions associated with the specific electricity products a company has procured (e.g. Power Purchase Agreements and Energy Attribute Certificates). While virtually all energy companies disclose location-based Scope 2 emissions, only a minority also disclose their market‑based scope 2 emissions (Figure 3.3, Panels C-E).
Scope 3, category 11 (“Use of sold products”) covers downstream emissions from customers’ use of a company’s products. In the energy sector, this category is typically the most significant for oil and gas companies, as it includes GHG emissions released when end-users combust fuels such as gasoline, diesel, and natural gas. As expected, listed energy companies’ scope 3 emissions are largely driven by category 11, yet other categories remain material – exceeding 4 400 MtCO₂e – reflecting supply-chain emissions from energy companies outside the oil and gas industry as well (Figure 3.3, Panels E and F).
Unlike scope 1 and 2, scope 3 GHG emissions cannot be reduced by the company alone; they depend on the global demand for fossil fuels and the availability of cleaner end-use technologies. This creates a dilemma: an oil company can reduce its direct emissions, but if it continues to sell oil, the CO₂ from customers’ combustion remains. This may explain why some companies have been reluctant to set quantitative scope 3 reduction targets, as such targets may not actually curtail demand or global emissions and might simply shift market share rather than achieve climate benefits. For instance, listed companies may be compelled by investors to divest carbon-intensive assets (mature oilfields, coal mines, etc.) to non‑listed operators. While this can lower a company’s reported emissions, it does not necessarily help the climate – the pollution is simply transferred to another legal entity.
Listed energy companies’ total disclosed GHG emissions are largely driven by scope 3 emissions, with wide discrepancies in disclosure rates among regions.
Source: OECD Corporate Sustainability dataset, LSEG, Bloomberg. See Annex A for details.
Governments have a significant role to play in enabling or curbing sector emissions. They not only issue the permits for exploration and production, but they also often have significant ownership stakes in companies that account for 32% of the energy sector listed companies’ GHG emissions.
At the global level, listed state-owned enterprises (SOEs) – defined in this report as companies in which the state exercises control or holds more than 25% of the shares – are responsible for 3 132 MtCO₂e in scope 1 emissions and almost 4 250 MtCO₂e in scope 3 emissions, underscoring their dominant role in operational and upstream activities. Non-SOEs report lower scope 1 emissions at 2 490 MtCO₂e, but disclose substantially larger scope 3 emissions, totalling 13 037 MtCO₂e (Figure 3.4).
In China, SOEs are the primary source of emissions among listed companies in the energy sector. They account for 1 426 MtCO₂e in scope 1 and 100 MtCO₂e for scope 2 emissions, whereas non-SOEs only contribute 27 MtCO₂e in scope 1 and 57 MtCO₂e in scope 2. Similarly, in the Middle East and Africa, SOEs contribute nearly all reported scope 1 and 2 emissions.
State-owned enterprises account for one-third of the emissions disclosed by energy sector listed companies, while seemingly underreporting their scope 3 emissions.
Note: The SOE categorisation corresponds to companies that are either owned or controlled by the government or any governmental body, if the latter has more than 25% of shares, or 50% of votes or has a golden share in the company giving it veto power.
Source: OECD Corporate Sustainability dataset, LSEG, Bloomberg. See Annex A for details.
The quality of corporate emissions targets – their ambition, feasibility and comprehensiveness – varies widely across the energy sector. Many large companies now advertise net-zero emissions by 2050 ambitions. However, the fine print matters: whether net-zero covers only their own operations (scope 1 and 2), or also customer use (scope 3); and if it is to be achieved with actual emission reductions or also by buying carbon offsets. Targets to 2030 or 2035 are arguably even more critical, as they translate ambition into near-term action (or lack thereof).
To conduct a more in-depth analysis, a sample of 100 energy companies was selected to examine their sustainability reports and assess the disclosure of key environmental and corporate governance information. This sample consists of 34 large companies, 33 medium-sized companies and 33 small-sized companies, grouped according to their total assets. The sample was selected among the 2 475 listed companies from the energy sector, of which the “large” group (779 companies) amounts to USD 18 trillion in total assets and has an average total asset size per company of USD 23 billion. The “medium” group (779 companies) amounts to USD 618 billion in total assets and has an average total asset size per company of USD 794 million. The “small” group (780 companies) amounts to USD 46 billion in total assets and has an average total asset size per company of USD 59 million.
Large companies demonstrate the highest overall climate disclosure and target-setting. While 94% of the large companies disclose their current emissions, only 44% disclose baseline emissions (Figure 3.5, Panel A). Interim target-setting among large firms is moderate, with around one‑fourth having established such targets. The average number of years between the baseline year and the interim target (which is set between 2025 and 2035) stands at 11 years. Long-term target-setting is more prevalent, with 35% of large companies committing to scope 1 and scope 2 emission reduction though not always aiming for net zero.
Regarding medium-sized companies, 52% disclose current scope 1 and 2 emissions, while only 15% disclose baseline emissions (Figure 3.5, Panel B). In terms of target‑setting, only three companies out of 33 adopted interim targets (with 12 years between the baseline year and the interim target), and five set long-term net-zero goals. Small companies lag behind in both emission disclosure and target-setting. While one-third of small companies reported current scope 1 and 2 emissions, only 6% disclosed baseline emissions (Figure 3.5, Panel C). Target-setting remains sparse, with only one company reporting interim (with eight years against the baseline year) or long-term targets.
Large energy companies lead in emissions disclosure and target-setting, while medium and small companies disclose far less often and rarely set emission targets.
Source: OECD compilation based on each company’s publicly available disclosure. See Annex A for details.
With regards to scope 3 emissions disclosure and target-setting, 29% of large companies disclose scope 3 baseline emissions, compared to one medium-sized company and one small. Seventy-one per cent of large companies (24 out of 34) disclose their current scope 3 emissions, while 24% (8 out of 33) of medium‑sized and 21% of small companies do (7 out of 33) (Figure 3.6). When it comes to target‑setting, only four large companies (12%) have established an interim target for scope 3 emissions with an average period of 10 years against the baseline value, and seven (21%) have set long-term targets. No medium nor small companies have disclosed interim nor long-terms targets reduction for scope 3 emissions.
Disclosure of scope 3 emissions is mostly limited to large companies, which rarely set reduction targets for this scope – and when such targets are set, their interim targets tend to remain limited.
Source: OECD compilation based on each company’s publicly available disclosure. See Annex A for details.
Globally, among the 924 listed energy companies that disclosed their GHG emissions, an external service provider assures the emissions of 512 of them. One-fifth of the companies disclosed a limited level of assurance, while 11% disclosed their emissions were subject to a reasonable level of assurance. In Europe and Latin America, 34% and 32% of the companies assured their emissions with a limited level of assurance, respectively (Figure 3.7, Panel A). Among the large companies’ sample, more than 75% of the GHG emissions disclosed are assured externally: 59% are subject to limited assurance and 18% to reasonable assurance. Most medium-sized companies (85%) do not undergo any form of external assurance, with 6% disclosing a reasonable assurance of their GHG emissions and 9% opting for a limited assurance. For small companies, the vast majority of the GHG emissions disclosed are unassured, with only 3% assured with reasonable level (Figure 3.7, Panel B).
A detailed analysis of a sample of 100 companies confirms what widely used commercial databases also suggest: external assurance of GHG emissions disclosure is common only among large energy companies.
Source: OECD Corporate Sustainability dataset, LSEG, Bloomberg, OECD compilation based on each company’s publicly available disclosure. See Annex A for details.
Several market mechanisms aiming to reduce greenhouse gas emissions exist. Carbon offsets and allowances are two important ones. Carbon offsets are certificates companies can buy from actors conducting projects to avoid or capture GHG emissions. The buyer can then claim that the emission reduction that it financed by buying the certificate partially offset its own emissions. Carbon offsets are typically traded on a voluntary basis. Allowances are certificates giving companies the right to emit a certain amount of greenhouse gases. They exist under emission trading schemes, which are in place in jurisdictions where allowances are required to be able to emit greenhouse gases without paying fines.
Both these instruments are referred to as carbon credits. Figure 3.8 presents the total GHG emissions against carbon credit retirement rates. Globally, around 1 000 listed companies disclosed carbon credits corresponding to 258 MtCO₂e, of which 116 are energy companies amounting to 174 MtCO₂e (Figure 3.8, Panel A). These 174 MtCO₂e represent 0.7% of total reported emissions by these companies. European companies disclosed the highest ratio of carbon credit retirements to emissions (1.9%). When examining the sample of 100 companies, large firms disclosed 26 MtCO₂e in carbon credits, representing 0.6% of their total emissions.
Retired carbon credits account for only a negligible share of total GHG emissions among energy companies across all sizes and regions, with Europe standing out as the exception.
Source: OECD Corporate Sustainability dataset, LSEG, OECD compilation based on each company’s publicly available disclosure. See Annex A for details.
One area where energy companies’ commitment to addressing GHG emissions can be tested is lobbying and influence activities. Some companies are under scrutiny to ensure their lobbying and influence activities are consistent with their commitments and goals on responsible business conduct matters (OECD, 2024[5]). For example, companies that have a net-zero-by-2050 pledge that includes scope 3 emissions could be expected to advocate for aggressive climate policies that reduce fossil fuel demand (e.g. carbon pricing, efficiency standards, subsidies for electric vehicle adoption). In practice, however, short-term profit increases may incentivise companies to lobby against or weaken climate regulations, which would be a misalignment with their sustainability goals.
Sub-Principle VI.C.1 of the G20/OECD Principles of Corporate Governance recommends that the corporate governance framework should ensure that boards oversee whether companies’ lobbying activities are coherent with their sustainability-related goals and targets. According to the annotations to the principle, boards should effectively oversee the lobbying activities management conducts and finances on behalf of the company, in order to ensure that management gives due regard to the long-term strategy for sustainability adopted by the board.
An increasing number of countries are establishing a lobbying regulatory framework that clearly specifies definitions and transparency requirements for lobbying activities. Currently, around half of OECD countries have defined lobbying activities and which actors are considered lobbyists in their regulatory framework, and 17 OECD countries have a publicly available lobbying register (OECD, 2024[6]).
These frameworks are not intended to restrict or discourage lobbying, but rather to establish safeguards and standards that ensure interests are represented fairly, and that citizens can understand who is seeking to influence policy decisions. However, experience from these countries has found that, providing effective definitions remains a challenge, in particular because those who seek to influence the policy making process are not necessarily what might typically be considered lobbyists. Indeed, lobbying and influence landscape has evolved in recent years, not only the actors and practices involved but also the context in which these activities operate (OECD, 2021[7]). The definitions of “lobbying” and “lobbyist” may need to be tailored to the specific context and sufficiently robust, comprehensive and explicit to avoid misinterpretation and to prevent loopholes. This includes clarifying:
1. “who” carries out the lobbying and “on behalf of whom”
2. “who” are the public officials lobbied
3. “what” matters are lobbied about (i.e. the objective pursued and the specific public decision that was targeted) and
4. “how” is the lobbying taking place.
The OECD Recommendation on Transparency and Integrity in Lobbying and Influence upholds lobbying and seeking to influence government decisions as legitimate ways in which stakeholders participate in public decision-making processes. It defines lobbying and influence activities as “actions, conducted directly or through any other natural or legal person, targeted at public officials carrying out the decision‑making process, its stakeholders, the media or a wider audience, and aimed at promoting the interests of lobbying and influence actors with reference to public decision-making and electoral processes.” (OECD, 2024[5]).
Table 3.1 provides an overview of four selected legislative frameworks governing lobbying activities in Australia, Chile, the European Union, and the United States. It outlines the scope of each legislation by identifying the individuals and entities to whom the rules apply and details the types of information that must be disclosed under each regime. It also indicates whether the jurisdiction has designated a competent authority or institution with the legal capacity to monitor and enforce compliance with lobbying rules. This comparative approach aims to highlight key similarities and differences in transparency requirements across jurisdictions.
Note: Bullet-points correspond to a positive answer; blank cells correspond to a negative answer.
Sources: OECD (2021[7]), Lobbying in the 21st Century: Transparency, Integrity and Access, https://doi.org/10.1787/c6d8eff8-en; OECD (2022[8]), Regulating Corporate Political Engagement: Trends, challenges and the role for investors, https://doi.org/10.1787/8c5615fe-en; OECD (2024[9]), The Regulation of Lobbying and Influence in Chile: Recommendations for Strengthening Transparency and Integrity in Decision Making, https://doi.org/10.1787/e84a846f-en.
The United States and the European Union stand out for fulfilling all six criteria. Chile fulfils all the criteria but the obligation to disclose lobbying expenditures. Australia fulfils only three categories, and most importantly, its framework does not cover companies lobbying on their own behalf.
These corporate disclosure requirements support transparency of lobbying activities by providing information about who is doing the lobbying, on whose behalf, and with what resources. Such disclosures enable investors, stakeholders and oversight bodies to assess the scale of lobbying efforts and compare the relative influence of various actors. This can also show whether public commitments or sustainability goals and actual lobbying practices are aligned.
At the global level, 7% of listed energy companies (representing 35% of market capitalisation) publicly disclose their position on climate-related public policy and regulation (Figure 3.9, Panel A). Membership in business associations is more commonly disclosed, with 15% of companies by number and 51% by market capitalisation reporting such affiliations (Figure 3.9, Panel B). However, only 6% of companies by number – and 24% by market capitalisation – assess whether their climate policies are consistent with those of the associations to which they belong (Figure 3.9, Panel C). Europe and the United States lead across all three measures.
With regards to the 100-company sample, large companies disclosed allocating USD 3.5 million on average to lobbying activities in 2024. In comparison, medium-sized companies disclosed an average of USD 120 000, and no small companies disclosed this information. These figures are shaped by limited disclosure: only 12 out of 34 large firms (35%) disclosed lobbying expenditures, 3 out of 33 among medium‑sized companies (9%) and no small firm (Figure 3.9, Panel D).
Globally, 7% of listed energy companies disclose climate policy positions and 15% report business association memberships, with large companies disclosing on average USD 3.5 million in lobbying.
Source: OECD Corporate Sustainability dataset, LSEG, OECD compilation based on each company’s publicly available disclosure. See Annex A for details.
In the 100-company sample, 68% of large companies disclosed their lobbying activities, and half disclosed the goal of their lobbying activities. Indirect lobbying activities (encompassing a wide range of activities to influence public policies through third parties, such as trade associations memberships, social media, and grassroots movements, among others) were disclosed by 71% of large companies, while 35% disclosed both funds dedicated to lobbying, and jurisdictions in which they operate. A code applicable to both in‑house and external lobbying exists in 38% of large companies, and 15% provide training for employees involved in lobbying. Annual reviews of lobbying activities are conducted by 47% of large companies. Among medium-sized companies, 12% disclosed lobbying activities, but none disclosed the goal of their lobbying activities. Small companies show uniformly low levels of disclosure, with each of the indicators ranging between 0% and 9% (Figure 3.10).
In the 100-company sample, large companies' disclosure of lobbying practices varies widely across activities, while medium companies disclose little and small companies almost none.
Source: OECD compilation based on each company’s publicly available disclosure. See Annex A for details.
Tackling GHG emissions will require massive investment in alternative technologies to replace the combustion of fossil fuels. In the private sector, many companies have considerable technical expertise and R&D capacity that could be directed to climate solutions.
Environmental R&D and environmental CapEx figures reported by companies do not adhere to a harmonised classification system such as a taxonomy for sustainable activities; instead, they are based on company-specific disclosure, which limits the comparability of the data.
Globally, only 1% (381) of all listed companies by number disclose environmental R&D, though this figure rises to 5% when considered by market capitalisation (Figure 3.11). In the energy sector, 2.5% (61) of companies disclose such R&D, and these represent 24% of the sector’s market capitalisation.
In the Middle East and Africa, while few companies (3 companies, corresponding to 1.8% of listed companies in the region) report environmental R&D, they account for 80% of market capitalisation – the highest share globally. Latin American companies from the energy sector present the highest share in disclosure of environmental R&D (7% of companies), representing 43% of the sector’s market capitalisation.
Environmental R&D and CapEx disclosure is rare and non-harmonised – only 2.5% of listed energy companies report globally, with figures reaching 7% of energy companies in Latin America and just 1.8% of firms in the Middle East and Africa, yet covering 80% of the region’s market cap.
Source: OECD Corporate Sustainability dataset, LSEG. See Annex A for details.
Environmental R&D accounts for 6% of total R&D costs among energy companies globally (Figure 3.12, Panel A). This share is considerably higher in Europe in where it amounts to 46%. In Emerging and Developing Asia excl. China, and Latin America, more than 20% of the R&D costs are oriented towards the development of products and services focusing on improving the environmental impact reduction and innovation.
In the 100-company sample, environmental R&D accounted for 24% of total R&D investments among large companies (Figure 3.12, Panel B). This metric could not be computed for medium and small companies, given the scarce availability of data on research and development for these companies.
Except in Europe, reported R&D dedicated to environmentally friendly technologies remains low, suggesting either weak disclosure or limited long-term ambition by energy companies in transitioning to a low-carbon economy.
Source: OECD Corporate Sustainability dataset, LSEG, OECD compilation based on each company’s publicly available disclosure. See Annex A for details.
Where and how a company directs its capital expenditures (CapEx) can reveal its strategic priorities more tangibly than pledges. If a company continues to invest heavily in exploring new oil fields or building new coal power units, it indicates an expectation of continued fossil fuel business. Conversely, significant and growing green CapEx may signal a pivot to a low-carbon future. The availability and transparency of such capital expenditure plans are therefore of interest to investors and policymakers alike.
The disclosure of environmental CapEx remains limited across global markets. Globally, only 3% of all listed companies report environmental CapEx, yet these represent 16% of total market capitalisation (Figure 3.13). In the energy sector, disclosure is more prevalent, with 7% of companies reporting, accounting for 42% of the sector’s market capitalisation. China and Europe lead in terms of the share of energy companies disclosing environmental CapEx in the energy sector, with 12% and 10% of companies respectively, corresponding to 47% and 59% of market capitalisation.
An investor assessing companies’ preparedness for a Paris-aligned transition would find environmental CapEx disclosure for only 7% of energy companies globally, with more substantive reporting largely concentrated in Emerging Asia and Europe.
Source: OECD Corporate Sustainability dataset, LSEG. See Annex A for details.
In the 100-company sample, large companies reported USD 267 billion in CapEx, of which USD 114 billion (43%) was directed towards low-carbon assets and projects. Figure 3.14 reveals that environmental CapEx accounted for less than 1% of total CapEx for medium and small‑sized companies.
While disclosure from medium and small companies is limited, the 43% of CapEx that large energy companies report allocating to low-carbon assets may indicate expectations of a gradual transition to a low-carbon economy.
Note: Environmental CapEx displayed in Figure 3.13 refers to whether the company has disclosed environmental CapEx; however, the actual value of environmental CapEx is not available.
Source: OECD compilation based on each company’s publicly available disclosure. See Annex A for details.
In addition to missing information from many companies, another major complication in the analysis above is the lack of standardised disclosure. An investor trying to compare how “green” different energy companies’ R&D and CapEx is will struggle, because definitions vary, and many companies do not break out low-carbon spending at all
IFRS S1 does not explicitly require the disclosure of green or environmental CapEx as a standalone metric. However, it mandates that companies disclose material information about sustainability-related risks and opportunities, including how these are integrated into governance, strategy, and resource allocation. GRI Standards, particularly GRI 302 (Energy) and GRI 305 (Emissions), do not mandate specific disclosures on green CapEx. However, they encourage organisations to report on investments in energy efficiency, renewable energy, and emissions reduction initiatives.
ESRS E1, aligned with the EU Taxonomy, explicitly requires companies to disclose the proportion of CapEx and OpEx that is aligned with the EU Taxonomy’s environmental objectives, including climate change mitigation and adaptation. This includes reporting on the share of green CapEx as a percentage of total CapEx and providing details on how these investments contribute to the transition to a climate‑neutral economy.
Another challenge in the engagement between companies and investors is the capacity of energy companies to invest in CapEx and R&D – regardless of whether green or not – in light of competing priorities. Panel B of Figure 3.15 shows that from 2015 to 2024, the cash used by listed energy companies to pay dividends and repurchase shares has tripled, reaching a peak of USD 671 billion in 2024. Panel C shows that, over the same period, net cash used in investing activities has increased by less than 5%. In 2022, for the first year in this period, more cash was used to repurchase shares than cash received from issuing shares.
Since 2022, energy companies’ net cash flows from operating activities have been falling, but dividends paid and net shares repurchased, and net cash used in investing activities have remained stable (Figure 3.15, Panels A, B and C). Meanwhile, R&D expenses fell by 14% between 2023 and 2024 (Figure 3.15, Panel D).
Rising operating cash flows enabled energy companies to triple dividend payments and share buybacks between 2015 and 2024, while investment activities grew by less than 5%.
Source: OECD Corporate Sustainability dataset, LSEG. See Annex A for details.
In energy companies, traditional executive remuneration metrics have included reserves replacement, production growth, and short-term financial returns – factors which, if left unchanged, could motivate behaviour that does not align with decarbonisation objectives. Globally, 23% of companies link executive pay to performance metrics, representing 90% of market capitalisation. In the energy sector, 34% of companies by number and 89% by market capitalisation link remuneration with performance (Figure 3.16, Panel A).
Principle VI.C. of the G20/OECD Corporate Governance Principles recommends that “the corporate governance framework should ensure that boards adequately consider material sustainability risks and opportunities when fulfilling their key functions […]”. Boards can take into consideration sustainability matters when establishing key executives’ compensation.
At the global level, 10% of all listed companies disclosed linking their executives’ remuneration to sustainability-related metrics. These companies represent 60% of global market capitalisation. In the energy sector, 21% of companies by number and 77% by market capitalisation have established such remuneration linkages (Figure 3.16, Panel B). Europe leads in both the number and in market capitalisation for all listed companies: 23% incorporate sustainability into executive remuneration, covering 89% of the region’s market capitalisation. In the energy sector, 31% of companies – representing 92% of market capitalisation – have adopted such practices. The United States has the highest percentage of energy sector companies (48% by number) disclosing having such remuneration arrangements. In contrast, in Emerging and Developing Asia excl. China, only 6% of companies by number and 18% by market capitalisation disclose sustainability-linked remuneration (Figure 3.16, Panel B).
Across all listed companies, only 3% (representing 32% of market capitalisation) disclosed linking CEO and executive remuneration to climate-related performance indicators. In the energy sector, these figures increase to 9% of companies and 56% of market capitalisation (Figure 3.16, Panel C). When focusing specifically on the integration of GHG reduction targets as a remuneration KPI, disclosure remains limited: 2% of companies (17% of market capitalisation) disclosed such practices, compared with 4% of companies (25% of market capitalisation) in the energy sector (Figure 3.16, Panel D).
Globally, only 10% of listed companies link executive pay to sustainability metrics – rising to 21% in the energy sector – while explicit climate- or GHG-related remuneration linkages remain far less common.
Source: OECD Corporate Sustainability dataset, LSEG, Bloomberg. See Annex A for details.
Energy companies’ non-financial performance indicators in their remuneration policies most typically take the form of metrics tied to health, safety and environment (HSE), or carbon emissions reduction and energy transition (Figure 3.17). Other common KPI categories related to non‑financial issues include matters tied to governance, ethics, risk management and compliance, but also topics linked to diversity, equity and inclusion (DEI) or employee engagement and culture.
In energy companies’ executive remuneration, KPIs related to “Health, Safety and Environment” and the energy transition are by far the most common.
Note: The figure displays sustainability-related KPIs, excluding financial KPIs, for the 100-company sample used in previous figures.
Source: OECD compilation based on each company’s publicly available disclosure. See Annex A for details.
The year 2025 marks the first wave of corporate disclosures aligned with the EU’s Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS). The ESRS draw on international standards on responsible business conduct (RBC) in several ways. First, several disclosure requirements pertain directly to the measures and steps outlined in the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (OECD MNE Guidelines) and the related Due Diligence Guidance for Responsible Business Conduct, including by requiring undertakings to disclose information related to their due diligence process (GOV-3). In addition, undertakings are also required to conduct their impact materiality assessment in accordance with this risk-based due diligence approach.
Specifically, as part of the CSRD reporting process, companies are required to perform a double materiality assessment (DMA) to identify and disclose material impacts (positive and negative), as well as material financial risks and opportunities (IROs) associated with their operations and value chains. Companies are expected to disclose IROs against a list of ten sustainability topics, and potentially sub-topics (as outlined in the ESRS AR 16).
Against this background, Figure 3.18 and Figure 3.19 analyse the outcome of double materiality assessments performed by 42 listed energy companies that reported under the CSRD’s first reporting cycle. The primary objective is to identify which topics are most and least frequently associated with material negative impacts and risks respectively, and to assess the extent to which these two assessments overlap. Where companies’ material negative sustainability impacts exceed their material sustainability risks, this may be an indication that companies may lack incentives to improve their sustainability performance. Identifying these gaps can help policy makers assess where further market-based or regulatory incentives may be relevant in order to improve the sustainability impact of business.
The 42 energy companies in the analysis have identified material sustainability impacts on a wide range of topics, and 9 of the 10 ESRS topics are considered to be material impacts by at least half of the companies in the energy sector (Figure 3.18). The only topic not considered a material negative impact by most companies is consumers and end-users (S4), which is considered a material impact by approximately one third of companies (36%). By contrast, only 4 of the 10 topics are considered a material financial risk by more than half of the companies. These are climate change (98%), own workforce (81%), workers in value chain (52%), and business conduct (52%).
Two topics are considered as both a material impact and a material financial risk by a large majority of the companies. Climate change (E1) is the most consistently identified material topic across both types of materiality assessment (see Figure 3.18). All but one company (98%) considered climate change a material negative impact as well as a material financial risk. Negative impacts related to companies’ own workforce (S1) are the second-most frequently reported material impact, considered a material negative impact by 88% of energy companies and a financial risk by 81% of the companies.
All other topics display significant differences across the two materiality assessments. The gap is most pronounced for biodiversity and ecosystems (E4), which is considered a material impact by 86% of the companies, but only considered a material financial risk by 36% of the companies, resulting in a difference of 50 percentage points (p.p.). Other topics with particularly significant gaps are pollution (E2, 31 pp), water and marine resources (E3, 31 pp), and workers in the value chain (S2, 26 pp).
Notably, for 8 out of 10 topics, the impact materiality exceeds the risk materiality, implying that generally companies in the sector may lack financial incentives to improve their sustainability performance and risk management in relation to these topics. This gap is generally wider for environmental issues than for social issues. The only topic for which the financial risk materiality exceeds the impact materiality is business conduct (G1), relating to issues such as corruption, political influence or lobbying activities. This is considered a material impact by 52% of the companies, whereas 67% consider it a material risk, possibly reflecting that corruption risks can be associated with significant legal and financial liability.
For 8 out of 10 topics, the impact materiality exceeds the financial risk materiality, implying that generally companies in the energy sector may lack financial incentives to improve their sustainability performance.
Note: Based on a sample of 42 double materiality assessments by energy companies reporting under the CSRD, as listed by Accounting for Transparency’s Sustainability Reporting Navigator.
Source: OECD compilation based on each company’s publicly available disclosure. See Annex A for details.
The majority of reported material impacts and risks are associated with companies’ value chains. Overall, 58% of reported material negative impacts are associated with companies’ value chains, including both the upstream (32%) and downstream (25%) segments (Figure 3.19). The identification of negative impacts in the value chain is more pronounced for workers in the value chain (S2), consumers and end users (S4), climate change (E1), and business conduct (G1). On the contrary, topics for which negative impacts have been primarily identified in companies’ own operations are own workforce (S1), water and marine resources (E3), and biodiversity and ecosystems (E4). Considering material financial risks, the share of risks associated with the value chain is only slightly lower, at 53%, and the distribution across ESRS topics is broadly similar. While this distribution appears to vary with the topic, it will likely also reflect factors specific to the energy industry as well as the availability and quality of companies' data on value chain impacts and risks.
In the energy sector, 58% of material sustainability impacts and 53% of material sustainability risks are linked to companies’ value chains.
Source: OECD compilation based on each company’s publicly available disclosure. See Annex A for details.
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