Oil companies aren’t cleaning up their act fast enough on climate
Based on Jessica Green, Jennifer Hadden, Thomas Hale and Paasha Mahdavi. 2021. "Transition, hedge, or resist? Understanding political and economic behavior toward decarbonization in the oil and gas industry." Review of International Political Economy + Jessica Green, Jennifer Hadden, Thomas Hale and Paasha Mahdavi. 2022. "Using earnings calls to understand the political behavior of major polluters." Global Environmental Politics.
Most firms are greenwashing at worst or hedging at best, investing marginally in green energy to minimize risk from stringent policy or future shareholder pressure.
The Policy Problem
Oil companies have been touting their commitments to renewables, pledging to become “net zero” – not adding greenhouse gases to the atmosphere on balance. Are these companies willing to decarbonize, or is this more greenwashing? And what is the oil industry’s long-term viability in a carbon-constrained world?
Key Findings and Proposed Solutions
Little connection between what oil firms tell their investors on climate policy and what they do in their business operations.
Not all firms are alike: European firms like Shell and BP are less opposed to climate policy than American firms like Chevron and Exxon, though there are important exceptions like Italy’s Eni and Spain’s Repsol.
“Legacy pressure” matters: oil companies with assets that are more vulnerable to climate policy (such as refineries and fracking wells) are feeling more decarbonization resistance from internal departments.