GHG Emissions - February 9, 2021
Marathon Oil cuts emissions intensity 20%, unveils new executive compensation framework
Marathon Oil announced that it cut its emissions intensity by 20% between 2019 and 2020 and revealed its plan to restructure its executive compensation to better reflect ESG goals.
The oil and gas company, in addition to seeing a 20% cut in emissions intensity over the past year, improved its total gas capture to 98.5% for the fourth quarter of 2020.
The company now set a new target to increase its emissions intensity reduction relative to 2019 levels to 30% in 2021 and 50% in 2025. It plans to achieve this target through continued replacement of pneumatic controllers with lower-emitting technology, connecting additional sites to utility power, and investing in soil carbon sequestration to offset emissions.
Another key part of today’s announcement was a reduction of CEO and Board compensation by 25%, in addition to a 35% reduction to long-term incentive awards. A new short-term incentive annual cash bonus scorecard was also created to reflect five key ESG areas: safety, environmental, capital efficiency, capital discipline, and financial strength, while production and growth metrics were removed from the scorecard. Marathon Oil said it intends for this change to better encourage behaviors that maximize shareholder value in the long-term by implementing major governance and committing to better equity within the company.
“To realize improved outcomes for all stakeholders, we believe energy companies must deliver competitive financial results relative to the S&P 500 while simultaneously driving meaningful improvement to all elements of ESG performance,” President, CEO and Chairman Lee Tillman said in a statement. “We believe oil and gas will be an essential contributor to the transition to a lower carbon future and it is imperative that the Company and our industry address the dual challenge of meeting the world's growing energy demand while also responding to the risk of climate change.”