The company, which is one of Europe's largest independent oil producers, said Monday that it will achieve carbon neutrality by 2030 by reducing emissions from operations, improving energy efficiency and developing carbon capture mechanisms.
It comes as oil and gas companies face intensifying pressure from investors and climate activists over the role they play in greenhouse gas emissions.
The move has been sharply criticized by Greenpeace Sweden, with the climate activist group accusing the energy company of hypocrisy.
"We have a target of 2030 to reach carbon neutrality across our operations and we have set out a realistic and deliverable pathway towards this, which clearly differentiates us as an independent oil and gas producer in our industry," Alex Schneiter, President and CEO of Lundin Petroleum, said in a statement published Monday.
The board of Lundin Petroleum has also proposed changing the firm's name to Lundin Energy, as part of a broader so-called 'decarbonization strategy."
The suggested name change is subject to shareholder approval at the company's annual general meeting on March 31.
"It represents our ambition to become carbon neutral, our position as a leading provider of oil and gas in the future and recognition of our role in the changing energy mix."
On a down day for wider markets, shares of Lundin had slipped almost 3% by early Monday afternoon.
Isadora Wronski, head of Greenpeace Sweden, told CNBC via email on Monday that the "only real answer" to the climate emergency is to quickly phase out all extraction and burning of fossil fuels.
"There is an inherent paradox in Lundin Petroleum setting a goal of 'carbon neutrality' while their ambition is being a 'leading provider of oil and gas in the future,'" Wronski said.
"Ridding 'Petroleum' from the company name does not change the fact that Lundin is in the oil business and their product is one of the environmentally most harming products there is. The Lundin Petroleum proposed name change and 'decarbonization strategy' reflects that oil companies understand that they are a dying breed."
"Lundin simply has to pivot or die," Wronski said.
An intensifying climate crisis was placed top of the agenda in Davos, Switzerland last week.
The annual gathering of the world's decision-makers and business leaders at the World Economic Forum followed a 12-month period that saw the hottest year on record for the world's oceans, the second-hottest year for global average temperatures, and large wildfires in the U.S., Amazon region and Australia.
Last month, Spain-based Repsol became the first oil company to give a date by which it will become carbon neutral, pledging to achieve this goal by 2050 to comply with environmental goals set by the Paris Agreement.
The United Nations has recognized climate change as "the defining issue of our time," with a recent report calling the crisis "the greatest challenge to sustainable development."