Internal and external factors affecting oil and gas companies' climate change performance

Details

Supervisors

Aust, Ina ; Luisi, Angelo

Faculty

Louvain School of Management

Degree label

Master [120] en sciences de gestion, à finalité spécialisée

Abstract

This master thesis investigates the internal and external determinants of oil and gas companies’ climate change performance for the period 2019-2021. We use resource-based theory, resource dependence theory and institutional theory as a theoretical framework for our analysis. By conducting a random effect model, we find that internal factors such as financial strength, gender diversity among executives, innovation competency and climate change policy elaboration negatively affect oil and gas companies’ GHG emissions. Moreover, this thesis provides evidence of a non-linear relationship between sales growth and GHG emissions – initially, this relationship is negative, but after reaching a critical threshold it becomes positive. As for the external factors, only energy transition regulations appear to be a significant factor, being negatively related to GHG emissions and showing that coercive pressures influence the climate-related performance of this industry. We find a positive correlation between the combined oil and gas reserves of integrated oil and gas companies and their GHG emissions. Furthermore, the results show that the companies that are members of the Oil and Gas Climate Initiative, have on average lower total GHG emissions, Scope 1 emissions and energy consumption than their comparative non-members counterparts. Finally, the difference between the climate-related performance of leaders and laggards of OGCI members is lower than the one of non-members, indicating a possible effect of mimetic isomorphism on oil and gas companies’ climate change performance.