Saudi Aramco: Drilling deeper into oil well or sustainability practices?
- uclimpactcareersso
- Jun 12, 2023
- 2 min read
Updated: Aug 25, 2023
Saudi Aramco is the world’s largest oil company according to Statista, as they produce over 10m barrels daily. Although the company’s website seems to boast about sustainability, Impaakt’s poor rating of -1.67 makes one question their intentionality.
Aramco strives to play a leading role in the energy transition through their aim of achieving net zero Scope 1&2 GHG emissions by 2050, with a focus on CO2 capture and sequestration. But their estimated emissions stood at 952 million tonnes in 2022 ,which contradicts their claim of supporting the Paris Agreement. The company’s website also provides surface-level information about their sustainability practices, indicating they are making statements but not making a positive impact.
Aramco recently bought a $3.4bn stake in Rongsheng Petrochemical Co, a Chinese company engaged in the development and distribution of petrochemicals and chemical fibers. Petrochemical production is typically used for plastic packaging, which in turn contributes to plastic waste and pollution. Aramco’s main intention for this investment was to establish a presence in the world’s top importer, with little consideration for environmental impact.
In comparison to ConocoPhillips, an American hydrocarbon corporation, Aramco is unable to provide concrete evidence of climate action. ConocoPhillips are currently in various partnerships to address climate issues e.g. Aris Water Solutions and Chevron to address water reuse. Whereas the Saudi Arabian oil company tends to partner up with countries like Pakistan and China, to expand rather than improve its operations. This is likely to affect the attitude of investors when creating sustainable portfolios.
Although Saudi Aramco may be contributing positively to Saudi Arabia’s economy through substantial corporate taxes, it is falling behind in serving the global society. As a fossil fuel company, it is Aramco’s responsibility to prove that it has a place in the world’s sustainable future and time is running out for such companies to do so.
Author: Safeena Khan, ICS Head of Research
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