I was recently reading an article by the formidable Christiana Figueres on trust and couldn’t agree more about her thoughts on the importance of it for the future of industry. In fact the recently released 2022 Edelman #TrustBarometer, describes a world in a cycle of distrust, led by a diminishing faith in government and media. According to the report, business is the only trusted institution by the public with a 61 percent trust level globally, and the only institution seen as both ethical and competent. When the government is absent, people expect business to step in and have high expectations that it can address and solve today’s challenges.
But let’s be honest, our industry has been trying for years to build trust with society, whether it was because of climate impact, our safety performance, or how we share our revenues. And quite frankly, I’m not convinced we ever really landed trust with all our stakeholders. For me, more important, and ultimately an enabler for trust, is action.
On climate, the resources we need are becoming more readily available than ever before, we have technological advances, government commitments, but more important we’re seeing commitments from business in a way never seen before. Most of the world’s biggest oil and gas companies now have commitments to getting to net zero supported by clear measurable targets.
So are we in action or is it all talk? Let’s look at some examples. Just recently, US energy giant, ExxonMobil announced its ambition to achieve net zero greenhouse gas emissions for operated assets by 2050. Shell has a target to reduce absolute emissions by 50% by 2030, compared to 2016 levels. A real game-changer is China’s CNPC actively taking on climate change and pushing their low carbon transition, aiming to achieve near zero emissions around 2050, when coal is so critical to its economy; or major oil-producing Aramco announce its ambition to achieve net-zero scope 1 and scope 2 greenhouse gas emission across its wholly owned operated assets by 2050. We have seen more and more carbon capture utilization and storage (CCUS) investments and previous pure-play oil and gas companies have diversified their portfolios to include solar and wind energy and are now actively pursuing the potential of hydrogen as the next source of low carbon energy. These are great examples of an industry accelerating its action to address climate challenges, and there are many more of them. Trillions of dollars from the oil and gas industry are being directed to solving climate change. I think it would be fair to say that our industry accepts there is much more to do, but there’s no arguing that directions have been set, and change is happening. We just need to stay on track – we have to – for the sustainability of the industry and our futures.
So, for me action is key, to build trust there’s no other way. We cannot prove our sincerity with words – so far these have only served to proliferate accusations of the advancement of profit and greenwashing. The current crisis of doubt and suspicion about our industry and its perceived desire to effect change is a burden that we cannot afford to shoulder for much longer. There is no question that change has to happen, but we need to give the energy industry the chance to pivot from 100-year established practises of exploration and production, with clear road maps on how they will achieve net zero, a supportive policy environment and ultimately a society that gives industry both the license and the opportunity to decarbonize.
Let me try to illustrate. We all know that achieving our climate objectives is going to be very difficult. While it may be tempting for policy-makers to set a narrow pathway to focus on and encourage a small set of technologies and measures, this may not always be the best way to guarantee success. Countries’ starting points in the energy transition differ significantly. A technology-inclusive approach to policymaking can ensure they are able to use the broadest possible range of emission mitigation solutions possible. By picking winners early in the race and focusing public support on a small number of technologies, we are concentrating risk and increasing chances of failure. Policies need to ensure that all the appropriate carbon mitigation solutions can be scaled up to help reach our climate goals. Here, our industry’s desire to act to its fullest potential and more proactively is hampered.
But therein lies the rub, many don’t want the industry to act, they just want it to cease working altogether as they see that as the only solution to saving the future of the planet. Many blame the oil and gas industry for the situation we find ourselves in and don’t believe it will ever change. But despite this, the truth is we need energy and two-thirds of energy comes from fossil fuels, which means we cannot fix climate without fixing the energy system. Until we see a shift in the trust dial what do we do? Well, we prove what we are saying, we go into action, and we are transparent – consistently disclosing what we are doing. Only then will we be able to demonstrate our shared purpose with wider society and finally receive the trust we deserve.
This article is also published on LinkedIn.