Repsol To be a net zero emissions company by 2050
Repsol’s Board of Directors has analyzed the role of the company in the fight against climate change and took a new step in its commitment to leading the energy transition in line with the objectives of the Paris Agreement and the Sustainable Development Goals of the United Nations.
Accordingly, Repsol will direct its strategy towards achieving net zero emissions by 2050. The company is the first in its industry to set this ambitious goal, which aims to limit planetary warming to less than 2 degrees centigrade compared with pre-industrial levels.
To achieve this objective, Repsol is setting new goals for the reduction of its carbon intensity indicator from a 2016 baseline: 10% by 2025, 20% by 2030, 40% by 2040, and net zero CO2 emissions by 2050. It is possible to achieve at least 70% of this target with the technology that can currently be foreseen, and the company is committed to applying the best available technologies to increase this figure, including carbon capture, use and storage. Repsol would, if necessary, aditionally offset emissions through reforestation and other natural climate sinks to achieve zero net emissions by 2050.
These figures will form the basis for the 2021-2025 Strategic Plan, which will be presented to the market and investors in the first half of 2020.
The new strategic focus in the context of new dynamics in the oil and gas markets and in policies that target decarbonization of the economy, Repsol has revised the valuation hypotheses for investments assuming a scenario compatible with the climate goals of the Paris Agreement and the United Nations.
As a consequence of the application of this new scenario Repsol expects to adjust the accounting value of some assets, with a post-tax accounting charge of approximately 4.8 billion euros. This adjustment will reduce specific reported income for 2019 but does not alter the company’s cash flow for the year nor the announced proposal to increase shareholder remuneration.
Cash flow from operations in 2019, which increased 22% in the nine months to September compared to the same period of 2018, will allow the company to achieve shareholder remuneration of one euro per share, formulate the proposal to the next Annual General Shareholders’ Meeting to buy back 5% of the outstanding share capital (in addition to the redemptions of the shares issued in the flexible dividend programs), and consider further stock buy-backs when cash surpluses are not applied in the short term to investment opportunities with the requisite return.
Repsol’s remuneration policy is among the most attractive of the Spanish stock market and of its sector worldwide.
“We are convinced that we must set more ambitious objectives to fight climate change. We believe now it is the right time for Repsol. We do it with the utmost confidence that we invest for the future. Addressing the significant challenges that lie ahead with strategic clarity is what will allow us to turn them into opportunities. We are convinced that this strengthens our project that is sustainable, attractive and profitable for all our stakeholders” said Chief Executive Officer Josu Jon Imaz.
Source / More : Repsol
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