to climate change from all sectors of society. This attention has led, and we expect
it to continue to lead, to additional regulations designed to reduce greenhouse gas
(GHG) emissions.
We expect that a growing share of our GHG emissions will be subject to regulation,
resulting in increased compliance costs and operational restrictions. If our GHG
emissions rise alongside our ambitions to increase the scale of our business, our
regulatory burden will increase proportionally.
We also expect that GHG regulation, as well as emission reduction actions by
customers, will continue to focus more on suppressing demand for fossil fuels, either
through taxes, fees, incentives to promote the sale of electric vehicles or even
through the future prohibition of sales of new diesel or gasoline vehicles. This could
result in lower revenue and, in the long term, potential impairment of certain assets.
Additionally, some groups are pressuring certain investors to divest their
investments in fossil fuel companies. If this were to continue, it could have a material
adverse effect on the price of our securities and our ability to access equity capital
markets. The World Bank has also announced plans to stop financing upstream oil
and gas projects in 2019. Similarly, according to press reports, other financial
institutions also appear to be considering limiting their exposure to certain fossil fuel
projects. Accordingly, our ability to use financing for future projects may be
adversely impacted. This could also adversely impact our potential partners’ ability
to finance their portion of costs, either through equity or debt.
Further, in some countries, governments, regulators, organisations and individuals
have filed lawsuits seeking to hold fossil fuel companies liable for costs associated
with climate change. While we believe these lawsuits to be without merit, losing any
of these lawsuits could have a material adverse effect on our earnings, cash flows
and financial condition.
In addition, physical effects of climate change such as, but not limited to, rise in
temperature, sea-level rise and fluctuations in water levels could adversely impact
both our operations and supply chains. If we are unable to find economically viable,
as well as publicly acceptable, solutions that reduce our GHG emissions and/or GHG
intensity for new and existing projects or for the products we sell, we could
experience additional costs or financial penalties, delayed or cancelled projects,
and/or reduced production and reduced demand for hydrocarbons, which could have
a material adverse effect on our earnings, cash flows and financial condition.
Also, if we are unable to keep pace with society’s energy transition or we are unable
to provide the desired low GHG emissions products needed to facilitate society’s
energy transition, it could have a material adverse effect on our earnings, cash flows
and financial condition.”248
248
Id., p. 16.
Annex D: Corporate Statements on Climate Change and Human Rights | 65
Select target paragraph3
Connect to a paragraph
Connect to an entity
Disable highlights
Add to table of contents