On Tuesday, the board of the Extractive Industries Transparency Initiative (EITI) attempted to finalize changes to its Standard—the set of rules to which its members are bound. Its decisions may determine the world’s climate future.

The EITI is an international organization promoting good governance in oil, gas, and mining.

At issue is whether oil, gas, and mining companies need to disclose their greenhouse gas (GHG) emissions at a project level. The board seems locked in a stalemate.

BEHIND THE TIMES

The EITI is a multi-stakeholder organization that includes 57 implementing countries, 67 supporting companies, and civil society. It is led by a global board that includes equal representation from these constituencies and supporting countries. The board’s decision-making requires agreement—usually consensus—across these constituencies.

The EITI is the leading organization devoted to governance of fossil fuels and mining, the two central pillars of the transition to cleaner energy. Yet, it is far behind the times—and risks losing further ground.

For more than eight years, civil society has been urging the EITI to address the climate crisis. Despite clear global consensus that the world is at a climate breaking point, the organization is poised to delay action for at least another three to four years, when it will next revisit its Standard.

Perhaps no element of extractive-sector transparency is more critical and basic to informing the energy transition than GHG emissions data. Yet, the EITI Board and its Secretariat are failing to incorporate this essential disclosure.

Why isn’t the EITI making progress on this key climate issue?

EMISSIONS DISCLOSURES ARE CRITICAL—AND MANAGEABLE

EITI-supporting companies have thus far failed to agree to any rule on reporting their GHG emissions.

Oxfam and civil society organizations represented on the EITI board (like NRGI) have been emphatic about the need to require companies to disclose granular, project-specific GHG emissions data. This data is critical for holding companies accountable for reducing their emissions and for supporting governments in addressing climate change.

Just 100 fossil fuel companies, including several represented on the EITI board, have been responsible for 71 percent of global industrial GHG emissions since 1988. Governments cannot mitigate or address industrial emissions they cannot account for; emissions data–or lack thereof–can also affect their project-investment decisions and assessment of stranded asset risks.

Emissions data will have significant impacts on projects that governments and citizens depend on for revenues, employment, and business opportunities. These stakeholders need emissions data to plan for and scrutinize the risks they are facing.

One of the biggest concerns for countries engaging in negotiations around the EITI Standard is whether or not the reporting would be burdensome. But the burden of reporting of GHG emissions would fall squarely on the shoulders of the extractive companies. Some EITI countries have already been taking matters into their own hands, proving that emissions disclosures are achievable. For example, two years ago, Trinidad and Tobago, a country represented on the EITI Board, successfully launched a robust carbon-emissions tracker to collect and analyze GHG emissions; they reported their results, and they are using the data to target and reduce emissions.

In addition to implementing countries, the United States, Canada, Belgium, France, Switzerland, and Finland also hold board seats and, given their own national policies, should be strongly supportive of GHG emissions disclosures.

In the US, the Biden administration is currently waging its own battle to push for GHG disclosures and has assembled a climate task force with ambitious goals for the country’s emissions reduction.

Belgium, Canada, and France themselves require disclosures aligned with the Task Force on Climate-Related Financial Disclosure, a market-led emissions-disclosure standard. Switzerland recently adopted a law requiring mandatory climate reporting for its own large companies and financial institutions. Finland boasts the world’s most ambitious climate target, aiming to hit net zero emissions by 2035.

GHG emissions are clearly well in line with supporting countries' own national priorities. We assume these countries' representatives on the board are also acting in line with their own national priorities and requirements, and thus encouraging EITI to adopt aligned, project-level disclosures.

Civil society members are supportive of an emissions-reporting requirement. Implementing and supporting countries should be, as they stand to benefit from companies’ disclosures and see alignment with other policies.

Less clear is the interest of the third constituency: extractive companies.

COMPANIES ARE FAILING TO BE ACCOUNTABLE

Despite the outsized role of energy companies in both creating and potentially helping solve the climate crisis, the EITI-supporting companies’ strategy seems to have been to run out the clock on the inclusion of GHG emissions data in the 2023 Standard. Civil society began formally proposing that GHG emissions data be included in the new Standard beginning in April 2022, and have repeatedly brought the issue up in committee and board meetings.

Companies have been reluctant to accept any GHG reporting requirements. The EITI Secretariat—which has previously been accused of corporate capture for its failures to hold companies accountable—has structured a revisions process that defaults to no change if companies refuse to compromise on this issue. And it has left discussions on GHG emissions to the last possible minute.

EITI-supporting companies have thus far presented a united front on withholding GHG emissions data, but it is unclear whether better-performing companies will continue to risk their own reputations to protect their laggard counterparts. Of the ten oil, gas, and mining companies represented on the EITI board, three—Anglo American, BHP, and Newmont—already disclose project-level data. A further three—Equinor, Kosmos Energy, and Royal Dutch Shell—provide country-level emissions data that in some instances are close to project-level in detail. The remaining board members—ExxonMobil, Rio Tinto, TotalEnergies, and BP—do not break down emissions data in a way that is usable by citizens or policy makers. It remains to be seen whether all companies will block progress, or whether those who are already engaging in emissions disclosure may help move their colleagues toward greater transparency.

In discussions with Oxfam, a common reason that EITI-supporting companies have offered for not supporting GHG reporting requirements is that there are other standards that already exist for GHG disclosures. While it is true that some companies publish GHG data in their own sustainability reports or report through the CDP, an EITI Standard requirement wouldn’t create any additional burden for those already engaging in robust reporting because they could simply link to existing disclosures in their EITI reporting. For those who are disclosing GHG data in the aggregate, they would only need to disaggregate to the project level.

However, other initiatives and standards seeking to capture GHG data do not do so at the level of granularity that would be present in an EITI Standard requirement. The EITI Standard would require GHG emissions reporting at a project level, which would provide critical data on the emissions burden of single projects. This would allow investors—who are demanding this data en masse—to see how companies work to curtail their emissions by project, and for citizens and governments to see what climate and financial risks specific communities will be facing.

We cannot wait any longer to demand transparency from some of the world’s largest GHG contributors. We need direct and indirect emissions data provided on a project level so we can figure out where the greatest emissions are coming from and how they can be reduced.

Just this week, EITI board chair Helen Clark wrote about the critical need for transparency in the energy transition, saying, “Collective action is needed now to ensure that the fight against climate change is managed in an open, inclusive and responsible way that works for people and the planet.”

Her words are a call to action. There is not a moment to lose.