Our business needs to be resilient to multiple risks including those posed by climate change. These risks are related to both the energy transition and the physical effects of changes in climate. Equinor assesses both the upside and downside risks and determines how these can influence the company.
What are the direct climate-related risks?
Investment criteria and capital allocation
To ensure that we have a robust portfolio, we address climate-related risk in our decision making. Scenario analysis informs our economic planning assumptions and break-even targets, and an internal CO₂ price helps us assess the robustness of investment proposals.
When a project is sanctioned, it is assessed on multiple criteria:
The break-even price and the CO₂ intensity metrics are only applicable for upstream oil and gas projects. The carbon pricing metric is applicable for both upstream and downstream oil and gas projects as well as electrification projects.
Additional criteria evaluated in an investment decision include safety, security and sustainability, optionality, strategic value, country risk, operational capacity and capability.