The energy transition offers oil and gas companies an opportunity to shift to new business areas such as renewable energy. New research looking at four oil majors finds limited investments in and revenues from renewable energy, despite ambitious climate strategies.
Li et al. Adopt a three-step approach to their analysis, allowing them to systematically track the evolution of a company’s transition over time. They first analyze annual reports for relevant keywords. They then build upon this by examining the evolution in the strategies communicated in annual sustainability and energy-transition reports. Finally, the researchers explore financial data, including CAPEX, for clean energy production and technologies, and for upstream fossil-fuel activities. Examining these companies over a 12-year period, between 2009 and 2020, the researchers conclude that there has been an increasing focus on climate and decarbonization-related issues in firms’ annual reports and strategies. However, they find that this shift towards sustainability in companies’ discourse is not necessarily matched by comparable investments in clean energy, which still range between only 0.2% to 2.3% of companies’ total CAPEX.