PEMEX Lowers Emissions but Faces Investor Environmental Pressure

PEMEX has released its Sustainability Report 2024, headlined by a 5.5% reduction in direct (Scope 1) greenhouse gas (GHG) emissions. According to the report, emissions dropped to 57.6 million metric tons of carbon dioxide equivalent (MMt CO₂e), driven by increased gas use in exploration, production, and processing, along with the integration of energy efficiency projects across its operations.

Indirect (Scope 2) emissions—those from electricity and steam purchased from third parties—rose slightly, from 1.98 MMt CO₂e in 2023 to 2.17 MMt CO₂e in 2024. While indirect (Scope 3) emissions from domestic sales of petroleum products, natural gas, and LPG increased by 9.87 MMt CO₂e, this was offset by a 33.47 MMt CO₂e drop in Scope 3 emissions related to crude oil exports.

Methane emissions fell 12.4% compared to 2023. PEMEX reiterated its target of reducing methane emissions by 30% by 2030, relative to 2020 levels.

The report claims PEMEX remains on track to reach net-zero emissions by 2050. However, a 2024 investigation by Mexico Evalúa  found the company invests just 4.3% of its annual revenue in sustainability—well below what is required to meet its goals. The watchdog also noted PEMEX projects stable oil production until at least 2030 and has not embraced clean energy integration.

Still, some ESG investors, including those aligned with Climate Action 100+ (CA100+), responded positively to recent initiatives. These include the formation of an internal Sustainability Committee in 2023 and the company’s first-ever Sustainability Plan in 2024. CA100+ also highlighted PEMEX’s methane reduction and routine gas flaring elimination targets (both by 2030) as encouraging steps. 

Mexico Evalúa attributed these moves largely to regulatory pressure from the U.S. Securities and Exchange Commission (SEC), which requires bond-issuing companies like PEMEX to disclose their climate impacts and outline mitigation strategies.

Investor skepticism deepened in May, when the Norwegian Government Pension Fund (GFP)—the world’s largest sovereign wealth fund—excluded PEMEX from its portfolio due to concerns over its sustainability commitments. While this decision is not expected to have a short-term financial impact, it remains unclear whether the 2024 report will be enough to restore confidence among institutional and ESG-focused investors.