2020 was a monumental year for just about every kind of news, and climate news was no exception. As the world reeled from the shocks of the coronavirus pandemic, racial tension, and economic collapse, it also dealt with deadly heat, hellacious wildfires, and the most active Atlantic hurricane season in recorded history.
We may also remember 2020, however, as the year the world started to reverse centuries of damage to the climate. Just before the start of the year, European Commission President Ursula von der Leyen announced a new Green Deal, which would go on to become the centerpiece of the European Union’s economic recovery plan. Several more of the largest global economies—including China, which is responsible for more greenhouse gas emissions than any other country—also came out with net-zero pledges. As oil and gas prices plunged due to the pandemic, NextEra Energy Inc., the world’s largest supplier of wind power, overtook Exxon Mobil Corp. and Chevron Corp. to become the world’s most valuable energy company, bar none. And in November, the U.S. voted to make Joe Biden, who adopted climate change as one of his signature campaign issues, its next president.
Disasters got worse
Oil and gas companies took heat from investors over emissions
In August, Exxon Mobil disappeared from the Dow Jones Industrial Average; it had been a member since the company was Standard Oil of New Jersey in 1928. That same month, energy (read: oil and gas companies) shrunk to become the lowest-weighted component of the S&P 500; in 2008, it was the component’s second-largest sector, right after information technology. In obvious way, this is the bottom for the oil and gas sector. More important to me is what its path up from the bottom—if there is one—will look like. For European supermajors, it runs through commitments to significantly or even wholly reduce greenhouse gas emissions while also coming to terms with a future of falling oil demand. For U.S. oil majors that path is less clear, but capital is having its say. Exxon, long dismissive of both specific emissions reduction strategies and climate change in general, now faces two activist campaigns calling for, among other things, a reckoning with what investors see as an unsustainable emissions trajectory. The company is listening—this month it announced plans to significantly reduce its upstream emissions intensity. —Nathaniel Bullard, Sparklines columnist/BloombergNEF chief content officer