Transparency is the only way for oil and gas companies to regain trust

For the oil and gas industry, transparency is its last hope of regaining the trust it has hemorrhaged for 50+ years. Its role in causing the climate and broader sustainability emergency is epic. Its attempts to greenwash and cover up that role have been despairing. The industry’s lack of transparency and humility constrains collaboration beyond its walls, limiting its vital role in the systemic change sustainability demands.

Instead of fearing the backlash from transparency, oil and gas leaders should see the potential

There is potential for an ecosystem of partners to coalesce around one major oil and gas firm that discloses its imperfect transition plan and says, “We need help.”

The transparency of a single, bold oil and gas major may be the last chance to trigger a transition to decarbonized energy at anything resembling the speed and systems level that the 17 UN Sustainable Development Goals (SDGs) need—across all environmental, social, and governance (ESG) factors (see Exhibit 1). That transparency and trust hinge on the most senior industry leaders making brave calls to outline their imperfect and incomplete roadmaps for decarbonization and all SDGs.

Exhibit 1: The oil and gas industry must realize the opportunities and responsibility for internal, customer-facing, and systems-changing sustainability

Source: HFS Research, 2023

Few people or organizations globally trust the oil and gas industry, given all that lies hidden from public, financial, and regulatory scrutiny throughout its value chain. The industry’s track record includes actively campaigning against its discovery of the link between emissions and climate change as far back as the 1970s. Oil and gas firms might not know the complete picture (a visibility problem itself). But humbly disclosing the gap between current best plans and the global sustainability context will give weight first to the (limited) good currently being done through investment and innovation and second to the (vast) potential good of working “all-in” with the ecosystem to transition. Transparency will let those who want to help do so with more confidence that there is a genuine industry desire to change.

This is predominantly a call to bp, Shell, and TotalEnergies

The three European firms, bp, Shell, and TotalEnergies, are the only oil and gas majors that have acknowledged (if not met) their opportunity and responsibility to systemically change. They also have the public profiles necessary to collaborate and enact a systems-level change through transparency.

Smaller energy firms like Enel and utilities firms like NextEra have been more public and transparent with their roadmaps—and good on them. Smaller firms have a role and must keep pushing the majors, but that won’t be enough alone.

Exxon Mobil and Chevron, the two US oil and gas giants, are lost causes. They have very publicly discounted their value chain (Scope 3) emissions and impact—widely acknowledged to be 80% or more of that impact—leaving the effects of their fuels, chemicals, and supply chains as society’s responsibility. The US oil twins eventually must come to the party, but they won’t be the triggers of change.

National oil companies (NOCs) are enormous and make up a frightening share of global activity; for example, Saudi Aramco has a market cap of approximately ten times and production four times larger than Exxon. Similar to the US supermajors, there has been no sign one of them will be the catalyst for change.

This is also a call to the industry’s current partners like universities, consultancies, or anyone who influences their activities. All must play a role in helping oil and gas firms choose transparency.

The oil and gas industry’s lack of transparency and humility holds back the collaboration we need

Collaboration toward the energy transition and sustainability is lacking within organizations and throughout ecosystems. Only 44% in Exhibit 2 collaborate with others in their organization. It’s worse when considering any potential ecosystem partner. The oil and gas industry’s lack of transparency remains a fundamental barrier to the open and ambitious collaboration we need—holding back many in the ecosystem, including politicians, activists, and experts.

Exhibit 2: Collaboration on the energy transition and global sustainability context is shocking; oil and gas majors must give their ecosystems a reason to trust and coalesce around them to change systems

Sample: 313 senior energy transition leaders
Source: HFS Research, 2023

Oil and gas industry leaders must make brave decisions to drive transparency

There’s no question that transparency is a tough call. Oil and gas is a brutal and volatile industry at the mercy of (while also significantly impacting) global politics, economics, and events. Secrecy and hesitancy are understandable, perhaps inevitable. But unless one oil and gas firm big enough to trigger momentum cracks the transparency angle soon and pulls the industry along, the energy transition and many SDGs are lost.

The silence from major oil and gas firms is telling—and deafening

It speaks volumes that no oil and gas major has disclosed a roadmap—whether aligned or falling short of the global sustainability context. They haven’t figured it out. They can’t. They need help.

Oil and gas majors can’t get to a point of confidence and diligence in translating both the global context and opportunity to move first and replumb the global energy system into business models and roadmaps that work for them. I don’t buy that they’re keeping their master plans secret for competitive advantage. Prove me wrong. The sheer scale of opportunity in being the firm that triggers the industry’s transition at the level we need is too big not to know that one or more of them have worked it out.

There is noise that the oil and gas industry wants to be transparent, even from those who work with the CEOs and C-suites at the biggest global majors (behind the scenes, obviously). Still, nothing makes it public beyond rhetoric, uncontextualized “green” investments (i.e., quoting large sums, in absolute terms, of investments that are relatively tiny in the grand scheme of fossil fuel investment), and net-zero emissions goals without the roadmap underpinning them.

What are oil and gas majors scared of?

There will be a long list of fears and constraints with which some will attempt to counter that statement. But I challenge anyone inside or associated with the oil and gas industry to keep pushing themselves and think back to the opportunities of transparency: a new level of industry trust and ecosystem collaboration. These opportunities remain untaken.

The Bottom Line: Oil and gas majors must overcome their fear of transparency by acting on what success would mean to the boldest firm, the industry, and all of us.

Oil and gas firms have an immense impact on all three spheres of sustainability influence in Exhibit 1. They have far larger internal impacts through their operations than most. But given the scale of the climate s***storm they helped cause, their opportunity and responsibility for systems change is enormous. To realize it, oil and gas majors need help. And they need others to coalesce around them, believing in their ambition and their ongoing pitfalls. Transparency on where they are and how far they’ve got to go is the only chance the oil and gas industry has of regaining the trust it has continuously vaporized by its own hand for over 50 years.