The COVID-19 pandemic significantly strengthened the energy sustainability trend, placing it at the core of economic recovery and future development plans. Most of the important energy forecasts, including the publications from Shell, Total, BP, DNV, IEA and OPEC, acknowledged the peak oil demand as one of the realistic scenarios. As a result, Oil & Gas Majors make the strategic adjustments, but investors and consumers expect them to adjust even faster.
The immediate strategic priority of Majors should therefore be decarbonizing oil and gas operations. At present, the most critical risk facing the oil and gas companies is losing their social license to operate, which can be avoided by:
Majors should see decarbonizing oil and gas operations as investments for building a future competitive advantage, rather than additional costs. Players that invest in decarbonization will maintain their social license to operate, while governments, investors and consumers will consider them as part of the solution rather than the source of the problem.
Additional opportunities for the Majors also lie in areas such as electricity management and electricity trading. All this will require companies to start thinking as, and partnering with utilities, real-estate developers and IT leaders.
To stay in line with the energy transition, Oil & Gas Majors should engage their customers, offering them support to identify and undertake the energy transition they need to achieve their desired future. This means engaging with the automotive, shipping and aviation industries, building and construction industries as well as packaging and consumer goods industries.
Taken altogether – adopting an energy transition strategy, broadening business operations, and enhancing awareness about sustainability of consumer choices – this will enable Oil & Gas Majors to manage shareholder demands and expectations. Thereby ensuring their continued success during the age of the energy transition.
Schneider Electric helps its customers to address the energy transition and integrate sustainability in future strategies.
Credit goes to: https://blog.se.com