We recognize the scientific consensus related to human influence on climate change and the dual challenge of providing affordable energy to a growing global population while transitioning to a lower-carbon future. We see natural gas as a fundamental component within this transition, and aim to support our customers in meeting their climate and environmental goals.

In line with our vision to provide clean, secure and affordable energy to the world, we aim to engage in business activity that can support this transition while preserving shareholder value.

Understanding, managing and reporting on climate-related financial risks and opportunities is critical for our business.

We have listened to feedback from our stakeholders on the importance of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) and transparent reporting. In response, we are pleased to voluntarily share several TCFD disclosures in our inaugural CR report, and to be one of the first LNG companies globally to do so.

Resilience in a low-carbon future: five trends

The five trends outlined below affirm our view that natural gas is and will be a critical component in the low-carbon energy transition and future global energy supply.

Over a billion people will transition from being poor or vulnerable to the middle class or higher by 2030, adding to a growing middle class, primarily in Asia. Higher levels of development correlate to higher energy consumption, as developing economies grow their modern sectors — industry, motorized transport and urbanization — spurring growth in energy demand.

As global energy demand grows, so do concerns about climate change. Policymakers have recognized the need to limit temperature rise to less than 2°C (3.6°F) above pre-industrial levels by the end of the century.

While modern renewable energy sources have seen tremendous growth globally with falling costs, it remains unclear how quickly renewables will be able to significantly penetrate global supply to meet growing demand. Other energy sources, including natural gas, are projected to continue to play a significant role in the global energy mix. At the same time, natural gas will continue to help enable the adoption of renewables. The transition to sources such as wind and solar require balancing supply and demand to overcome challenges related to limitations in output and reserve requirements. The growth of renewables has been, in part, aided by fast-cycling natural gas plants, which are vital to smoothing out intermittency in solar and wind power.

We believe that energy transition scenarios that combine environmental considerations, current energy business models and low-carbon technology investments are likely to require natural gas to continue to play a key role in the future low-carbon energy mix. The IEA forecasts that, even under a 2°C warming carbon-constrained scenario,17 natural gas will provide nearly a quarter of global energy demand in 2040. LNG facilities will remain critical to meeting future demand and the risk of stranded LNG export facilities appears limited. In fact, under IEA’s Sustainable Development Scenario (SDS), LNG trade grows by 81% by 2040 relative to 2018 levels, implying an important role for LNG in a low carbon transition pathway.

Natural gas can provide significant emissions reductions to meet the Paris Agreement’s 2°C goal. In fact, the International Energy Agency (IEA) estimates that switching to natural gas has already helped limit the rise in global emissions since 2010 and has avoided over 500 million metric tons of CO 2 emissions between 2010 and 2018. According to the IEA, there is a near-term potential to reduce ~4% of current energy-related CO2 emissions by fuel displacement to natural gas in the power sector, which could provide 8% of the reductions needed under the IEA’s SDS.