by Sean Deresh Larin
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The complexities of Scope 3 greenhouse gas emissions disclosures in the oil and gas sector highlight significant regulatory challenges and varied corporate practices among industry leaders. Scope 3 emissions, which account for most of the sector’s carbon footprint, illuminate systemic barriers to achieving global climate goals. Analyzing major regulatory frameworks—including the SEC Climate Disclosure Rules, California’s SB 253, and the EU’s Corporate Sustainability Reporting Directive (CSRD)—reveals how jurisdictional differences and fragmented standards affect compliance and transparency. Corporate responses showcase innovative practices, persistent gaps, and the tension between decarbonization and greenwashing. Addressing these challenges through harmonized standards and technological innovation is essential to fostering meaningful emissions accountability and advancing the global energy transition.
The Role of Scope 3 Emissions in the Energy Transition
The evolving regulatory landscape surrounding emissions disclosures has profound implications for the oil and gas sector. Scope 3 greenhouse gas (GHG) emissions, encompassing indirect emissions across a company’s value chain, are particularly significant for oil and gas companies, as they often comprise between 80% and 95% of their total carbon footprint.[1] Unlike Scope 1 emissions, which originate directly from a company’s operations, and Scope 2 emissions, which result from purchased electricity or heat, Scope 3 emissions include upstream activities such as raw material extraction and transportation, as well as downstream emissions primarily associated with the combustion of sold energy products. These emissions are closely tied to emissions from energy combustion and industrial processes, which accounted for close to 89% of energy sector GHG emissions in 2021.[2] However, addressing Scope 3 emissions presents unique challenges for oil and gas firms. Scope 3 emissions span fragmented supply chains, diverse combustion scenarios, and multiple jurisdictions. In addition, their data collection often relies on proxy models and estimation methodologies, introducing variability and limiting comparability across disclosures. The absence of a unified global reporting standard further complicates compliance efforts.
BP, Chevron, ExxonMobil, Shell, and TotalEnergies represent five of the largest publicly traded energy firms by revenue, market capitalization, and operational scope, collectively accounting for a significant portion of global fossil fuel production. ExxonMobil and Chevron, for instance, are the two largest publicly traded oil and gas companies in the US, with combined revenues exceeding $500 billion in 2023 and operations spanning upstream exploration, downstream refining, and petrochemical production.[3] BP, Shell, and TotalEnergies, headquartered outside the US, have similarly massive footprints, ranking them among the top 15 global corporations in the energy sector by revenue.[4] Beyond financial metrics, these companies are central to the energy transition dialogue as they balance their traditional fossil fuel operations with increasing investments in renewable energy. Moreover, their geographical diversity captures the regulatory and market pressures across jurisdictions. These firms exert considerable influence over the oil and gas industry’s decarbonization trajectory, making them critical for understanding the dynamics of Scope 3 emissions reporting and compliance.
This blog evaluates the evolving regulatory frameworks, current Scope 3 disclosure practices, and compliance strategies of BP, Chevron, ExxonMobil, Shell, and TotalEnergies. By examining each firm’s alignment with major mandatory and voluntary disclosure frameworks such as the US Securities and Exchange Commission (SEC) Climate Disclosure Rules, California’s Climate Corporate Data Accountability Act (SB 253), the European Union (EU)’s Corporate Sustainability Reporting Directive (CSRD), and the Greenhouse Gas Protocol (GHGP), the analysis sheds light on the regulatory and operational barriers to comprehensive emissions in the oil and gas industry.
A Fragmented, Uncertain Landscape: Key Regulatory Frameworks Governing Scope 3 Emissions
US Securities and Exchange Commission Climate Disclosure Rules
- Under the SEC’s final climate disclosure rules, adopted on March 6, 2024, all public companies registered in the US must disclose Scope 1 and 2 emissions. Still, the final regulations do not mandate the disclosure of Scope 3 emissions.[5]
California’s Climate Corporate Data Accountability Act
- California’s SB 253, signed into law on October 7, 2023, mandates that all companies with annual revenues exceeding $1 billion and operating in California disclose their Scope 1, Scope 2, and Scope 3 emissions. Unlike the SEC’s conditional approach, SB 253 requires Scope 3 emissions disclosures for all covered entities.[6]
EU Corporate Sustainability Reporting Directive
- The CSRD, effective January 2024, requires large companies and listed small and medium enterprises operating in the EU to disclose comprehensive GHG emissions data, including Scope 1 and Scope 2 emissions, as part of their annual management reports. Scope 3 emissions must be reported if deemed material from both an impact and financial perspective (double materiality).[7]
Greenhouse Gas Protocol
- The GHGP is the most widely used voluntary framework for GHG emissions reporting, providing foundational guidance for Scope 3 emission disclosures. The GHGP subdivides Scope 3 emissions into fifteen categories. Category 11 (use of sold products) is particularly significant for oil and gas companies.[8]
Impending Regulatory Changes in the US
The return of Donald Trump to the presidency could significantly alter the regulatory landscape for federal climate-related disclosures in the US. During his previous administration, Trump rolled back environmental protections, withdrew the US from the Paris Agreement, and limited the powers of agencies like the EPA. A similar trajectory in a second term could lead to the potential repeal of the SEC’s climate disclosure rules. Such deregulation would likely result in inconsistencies and reduced transparency, hindering investors’ ability to assess climate risks effectively. While this may provide short-term compliance relief for US-based companies like Chevron and ExxonMobil, it could weaken their competitiveness in global markets, especially as investors increasingly favor robust international ESG disclosures.
Federal deregulation in the US would not directly affect state-level frameworks like California’s SB 253. However, a Trump administration could indirectly challenge such laws by undermining funding for enforcement or supporting industry lawsuits. Without federal harmonization, companies operating under SB 253 would face an even wider compliance gap, making alignment with state mandates more challenging. Simultaneously, international frameworks like the EU CSRD could become essential for US-based firms to maintain access to global ESG investment funds and markets. EU-based companies that already align with these stricter international standards would gain a competitive edge over their US counterparts.
Corporate Practices: Case Studies of Scope 3 Disclosures
BP
- BP discloses Scope 3 emissions associated with the combustion of sold products. For 2023, BP reported 314.9 million metric tons of CO₂ equivalent for Scope 3 emissions, an increase from 306.7 million metric tons in 2022.[9] In addition to Category 11 disclosures, BP includes lifecycle emissions intensity metrics, reporting an average carbon intensity of 77 grams CO₂e per megajoule for sold energy products in 2023.[10] Deloitte LLP provides limited assurance for selected sustainability indicators, including Scope 3 emissions from sold products.
Chevron
- Chevron’s Scope 3 emissions disclosures emphasize the combustion of sold products. Based on Chevron’s 2023 disclosures, the equity-based Scope 3 emissions related to the use of sold products were approximately 406 million metric tons of CO₂e under the throughput method.[11] This figure aligns with Chevron’s broader carbon accounting framework, incorporating a Portfolio Carbon Intensity (PCI) methodology. This PCI metric, targeting a reduction to 71 grams of CO₂e per megajoule by 2028, aggregates Scope 1, 2, and 3 emissions, providing a holistic view of the company’s lifecycle carbon intensity.[12] Chevron also emphasizes transparency and external verification, providing third-party assurance for its GHG emissions data, particularly for Scope 1 and 2 emissions, with limited extension to Scope 3 data.[13]
ExxonMobil
- ExxonMobil estimates its Scope 3 emissions associated with the combustion of its crude oil and natural gas production at 530 million metric tons of CO₂-equivalent for 2021, making it one of the most significant contributors to indirect emissions among global oil majors.[14] However, ExxonMobil’s Scope 3 disclosures are limited to Category 11 and exclude other significant categories such as upstream emissions (e.g., from purchased goods and services or capital goods) and downstream activities beyond combustion. ExxonMobil supplements its Scope 3 data with lifecycle emissions analyses, albeit with a narrow focus on operational and end-use phases. It acknowledges the need for broader transparency but emphasizes the complexity of Scope 3 data collection and the risk of double counting in value chain emissions.
Shell
- In its 2023 reporting, Shell disclosed Scope 3 emissions across all fifteen categories outlined by the GHGP, with a notable emphasis on downstream emissions from the use of sold products. This category accounted for an estimated 319 million metric tons of CO₂-equivalent emissions from Shell’s own production and 559 million metric tons from third-party products.[15] Shell’s reporting also includes upstream categories, such as emissions from purchased goods and services (70 million metric tons CO₂e), capital goods (20 million metric tons CO₂e), and upstream transportation and distribution (10 million metric tons CO₂e).[16] The company further discloses emissions from employee commuting and business travel. Shell subjects its Scope 3 data to third-party assurance processes and publishes detailed methodologies for calculating emissions.
TotalEnergies
- TotalEnergies reports Scope 3 emissions across all fifteen categories outlined in the GHGP. Key categories include emissions from the use of sold products (Category 11), which totaled approximately 355 million metric tons of CO₂ equivalent in 2023.[17] In addition to Category 11, TotalEnergies discloses upstream emissions, such as those from purchased goods and services and capital goods, as well as emissions from downstream activities like investments and waste treatment. TotalEnergies has set a target to reduce the carbon intensity of its sold energy by 25% by 2030 compared to 2015 levels.[18] TotalEnergies enhances the credibility of its disclosures through third-party assurance.
Challenges and Opportunities in Scope 3 Emissions Accountability
BP, Chevron, ExxonMobil, Shell, and TotalEnergies provide illuminating examples of the complexities of Scope 3 emissions accountability and the broader energy transition. As some of the most prominent players in the oil and gas sector, they are responsible for a substantial share of global fossil fuel production and, by extension, greenhouse gas (GHG) emissions. The challenges and strategies these firms face in managing Scope 3 emissions highlight systemic barriers and opportunities that define the energy transition. Their responses to regulatory frameworks, data transparency demands, and stakeholder pressures reveal both progress made and hurdles remaining in achieving meaningful decarbonization. These companies provide a valuable lens for assessing the effectiveness of regulatory interventions and the role of corporate accountability in advancing global climate goals.
The regulatory landscape for Scope 3 emissions reporting remains fragmented and uneven, creating significant challenges for multinational corporations. BP, Shell, and TotalEnergies, operating within or near the European Union, face stringent Scope 3 disclosure requirements under the Corporate Sustainability Reporting Directive (CSRD), based on the principle of double materiality. These standards have led EU-based companies to adopt advanced emissions reporting methodologies, including detailed lifecycle analyses and category-specific breakdowns. By contrast, US-based companies such as Chevron and ExxonMobil operate under the more lenient requirements of the SEC’s climate disclosure rules, which may face changes under a potential second Trump administration. California’s SB 253 adds another layer of complexity for these companies, mandating unconditional Scope 3 disclosures for entities meeting specific revenue and operational thresholds within the state. These jurisdictional variations compel companies to navigate a maze of regulatory expectations, often requiring customized compliance strategies to address overlapping and conflicting mandates.
The diversity in regulatory frameworks underscores a critical challenge in achieving global comparability and consistency in Scope 3 emissions reporting. TotalEnergies exemplifies a proactive approach, leveraging digital tools and supply chain partnerships to enhance the granularity and reliability of its emissions data. This level of transparency positions TotalEnergies as a leader in emissions accountability but also highlights the resource-intensive nature of comprehensive reporting. In contrast, ExxonMobil and Chevron rely heavily on proxy data and spend-based accounting, reflecting the absence of stringent federal mandates in the United States. The Greenhouse Gas Protocol (GHGP), a cornerstone of voluntary emissions reporting, emphasizes the importance of primary data collection and methodological rigor. However, its flexibility allows for significant variability in how companies calculate and disclose emissions, undermining comparability and enabling selective reporting that complicates the regulatory landscape.
These companies also expose the persistent tension between corporate accountability and greenwashing in the oil and gas sector. BP and Shell position themselves as leaders in Scope 3 disclosures, setting ambitious reduction targets and aligning their reporting practices with global standards. However, these companies continue to invest heavily in fossil fuel infrastructure, raising questions about the credibility of their net-zero commitments. Similarly, ExxonMobil and Chevron’s limited engagement with Scope 3 emissions reporting—focusing primarily on Scopes 1 and 2—reflects a broader resistance to downstream accountability. This selective approach underscores the need for stricter enforcement mechanisms and third-party verification to align corporate practices with stated climate goals.
Despite these challenges, technological innovation and stakeholder engagement offer promising pathways for addressing Scope 3 emissions. Digital tools, such as blockchain and advanced analytics, can enhance data transparency and accuracy, particularly in complex supply chains. TotalEnergies’ real-time data integration into its reporting practices demonstrates how technology can bridge gaps in emissions accountability. Investor pressure further amplifies this dynamic, with shareholders increasingly demanding robust climate strategies and transparent reporting. These developments underscore the critical role of market forces in complementing regulatory efforts and driving corporate accountability.
Systemic barriers, however, hinder progress toward comprehensive Scope 3 accountability. High costs for data collection and third-party verification, coupled with the lack of harmonized global standards, remain significant obstacles. As evidenced by the companies studied, industry leaders face difficulties aligning their operations with diverse requirements from frameworks such as the CSRD, SB 253, and the SEC’s rules. Addressing these challenges will require coordinated action from regulators, corporations, and stakeholders. Harmonized reporting standards, supported by technological innovation and enhanced collaboration, are essential for closing gaps in Scope 3 emissions accountability and accelerating the energy transition.
The experiences of BP, Chevron, ExxonMobil, Shell, and TotalEnergies offer a microcosm of the broader discourse on decarbonization and sustainability. These companies’ varied approaches to regulatory compliance, data transparency, and corporate responsibility reflect the complexities of transitioning to a low-carbon economy. As stakeholders demand greater accountability, the lessons from these case studies highlight the urgent need for systemic reforms and collective action. By aligning corporate strategies with regulatory frameworks and leveraging technological innovations, the oil and gas sector can play a pivotal role in achieving global climate goals and advancing a sustainable energy future.
About Sean Deresh Larin
Sean Deresh Larin is a second-year law student at Columbia Law School. He has keen interests in transactional energy law and corporate sustainability. He received a Bachelor of Arts in Earth Sciences and a Bachelor of Science in Engineering in Chemical & Biomolecular Engineering from the University of Pennsylvania, where he graduated from the Vagelos Integrated Program in Energy Research. LinkedIn
[1] Few Oil and Gas Companies Commit to Scope 3 Net Zero Emissions. Wood Mackenzie, 2022. Available at https://www.woodmac.com/press-releases/few-oil-and-gas-companies-commit-to-scope-3-net-zero-emissions-as-significant-challenges-remain/.
[2] Global Energy Review: CO2 Emissions in 2021 (p. 11). International Energy Agency, 2021. Available at https://iea.blob.core.windows.net/assets/c3086240-732b-4f6a-89d7-db01be018f5e/GlobalEnergyReviewCO2Emissionsin2021.pdf.
[3] Forbes Global 2000: The World’s Largest Public Companies. Forbes, 2023. Available at https://www.forbes.com/lists/global2000/.
[4] Fortune Global 500: Top Energy Companies by Revenue. Fortune, 2023. Available at https://fortune.com/ranking/global500/.
[5] Item 1506, SEC Final Rules on Climate-Related Disclosures (p. 21744). US Securities and Exchange Commission, 2024. Available at https://www.govinfo.gov/content/pkg/FR-2024-03-28/pdf/2024-05137.pdf.
[6] California Legislative Information, SB 253, Climate Corporate Data Accountability Act, Section (c)(1)(A)(ii) (2023). California Legislative Information, 2023. Available at https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB253.
[7] Sustainability Reporting Standards, Chapter 6a, Article 29b, Section (2)(a)(i). Corporate Sustainability Reporting Directive (CSRD). European Commission, 2022. Available at https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022L2464.
[8] Greenhouse Gas Protocol: Corporate Value Chain (Scope 3) Accounting and Reporting Standard (p. 48). World Resources Institute and World Business Council for Sustainable Development, 2011. Available at https://ghgprotocol.org/sites/default/files/standards/Corporate-Value-Chain-Accounting-Reporing-Standard_041613_2.pdf.
[9] BP 2023 ESG Data Sheet (p. 3). BP, 2023. Available at https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/sustainability/group-reports/bp-esg-datasheet-2023.pdf.
[10] Id, p.3.
[11] Chevron 2023 Performance Data (p. 6). Chevron, 2023. Available at https://www.chevron.com/-/media/shared-media/documents/chevron-sustainability-report-2023.pdf.
[12] Id., p. 3.
[13] Id, p. 6.
[14] Scope 3 Emissions. ExxonMobil, 2023. Available at https://corporate.exxonmobil.com/-/media/Global/Files/Advancing-Climate-Solutions-Progress-Report/2022-July-update/Scope-3-emissions.pdf.
[15] Shell 2023 Scope 3 GHG Emissions Summary (p. 2). Shell, 2023. Available at https://www.shell.com/sustainability/transparency-and-sustainability-reporting/performance-data/greenhouse-gas-emissions/_jcr_content/root/main/section_1654294871/text_625214062_copy.multi.stream/1724059220539/5ac74b121026aa654e5bff7a0be354d21385d5a3/scope-ghgemissions-summary-final.pdf.
[16] Id., p. 1.
[17] Sustainability & Climate 2024 Progress Report (p. 28). TotalEnergies, 2024. Available at https://totalenergies.com/system/files/documents/2024-03/totalenergies_sustainability-climate-2024-progress-report_2024_en_pdf.pdf.
[18] Id., p. 14.