Targa Resources Corp: Report on Operational Greenhouse Gas Emissions Reductions

November 18, 2024 As You Sow

WHEREAS: The Intergovernmental Panel on Climate Change reports that immediate and sustained reductions in greenhouse gas (“GHG”) emissions are required to align with the Paris Agreement’s 1.5°C goal and limit the worst consequences of climate change.[1] Reducing emissions from fossil fuel operations is a critical part of decarbonizing the global economy, and investors are increasingly demanding that companies establish climate transition plans to mitigate risk.[2]

Targa Resources Corp, one of the largest midstream natural gas operators in the United States, faces increasing risks from its lack of operational GHG emission reduction targets. In its most recent annual report, the Company identifies “a number of risks arising out of the threat of climate change” including growing emissions regulations, decreasing demand for natural gas products, and rising stakeholder sustainability demands.[3] By setting Paris-aligned emissions reduction targets, Targa can increase its operational efficiency, prepare for growing climate-related regulations, and increase its competitive position amongst peers, all of which are important steps to mitigate climate-related risk.

Targa has made significant progress in reducing its operational methane emissions, guided by segment specific methane emissions intensity targets.[4] These targets are an important first step, but methane comprises only 5% of Targa’s operational GHG emissions footprint.[5] By setting GHG emissions reduction targets for the full range of its operations, Targa can expand its emissions and risk mitigation strategy beyond methane, maximizing the benefits associated with proactive carbon management.

Leading midstream players Enbridge and The Williams Companies have set near-term Scope 1 and 2 operational emissions intensity targets and disclosed net zero emissions strategies.[6] Notably, Enbridge provides a detailed breakdown of the emissions mitigation levers it will use to meet its goals, providing shareholders with valuable insight into its ongoing efforts to mitigate risk. [7] While reducing methane emissions is an important part of any climate strategy, Targa’s midstream peers have more complete emissions reductions goals that will serve them in meeting climate regulations and competing against peers.

By setting science-aligned operational emissions reduction targets and providing a comprehensive transition plan, Targa can mitigate climate-related risk, capitalize on climate-related opportunities, catch up to its more sustainable peers, and ensure long-term, sustainable value creation.

BE IT RESOLVED: Shareholders request that Targa issue a report, at reasonable expense and excluding confidential information, disclosing how the Company intends to reduce its full range of Scope 1 and 2 operational greenhouse gas emissions in alignment with the Paris Agreement’s goals.

SUPPORTING STATEMENT: Proponents suggest, at Company discretion, that the report include: