Oil companies may resist calls for renewables

Oil companies are facing more and more calls from shareholders to invest in alternative energy but the companies themselves may lack the profit motive, the entrepreneurial skills or indeed the will to satisfy their demands.

The chorus calling for larger alternative investments by the world’s huge oil and gas companies has become louder in tandem with the growing consensus that greenhouse gas emissions are causing global warming.
Some investors and shareholder activists argue that oil companies underestimate the impact that climate change policy could have on the energy industry. They say the companies need more exposure to renewables in order to guarantee sustainable returns in the long term.

But others say oil companies don’t have the technological expertise or the correct corporate culture to succeed in such an innovative and unfamiliar industry.

“The oil industry … makes decades-long, multibillion dollar investment decisions where you have to be very certain that you are aiming at the right target,” Steve Wunker, a senior partner at Innosight, a consulting firm that works to help companies grow through innovation.

Reuters