From “business as usual” to tackling climate change: Exploring factors affecting low-carbon decision-making in the canadian oil and gas sector

• Published in: Energy policy Vol. 148; p. 111932
• Main Authors: Abreu, Mônica Cavalcanti Sá de, Webb, Kernaghan, Araújo, Francisco Sávio Maurício, Cavalcante, Jaime Phasquinel Lopes
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier Ltd 01-01-2021; Elsevier Science Ltd
• Subjects: Business competition; Carbon; Carbon-intensive firms; Change agents; Climate change; Climate change strategies; Command and control; Companies; Competitors; Customers; Decision making; Emissions control; Empirical analysis; Energy policy; Greenhouse gases; Investors; Mitigation; Oil and gas industry; Petroleum; Policies; Regression analysis; Risk perception; Scarcity; Stakeholders; Strategy; Sustainability; Sustainability reporting; Canada; Mitigation; Climate change strategies; Carbon-intensive firms; Stakeholders; Sustainability
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2020.111932

This article investigates empirical evidence from the Canadian oil and gas sector regarding the key factors behind corporate decision-making in moving from “business as usual” to tackling climate change. The findings are based on survey data from a sample of 127 managers. Logit regression analysis revealed that pressure from government, customers, suppliers and competitors increased the likelihood that firms will adopt a low-carbon strategy. Compared to other stakeholders, investors and employees may not be as strongly committed to adopting a climate change strategy. Media and corporate sustainability reporting were not found to be important factors in influencing firms to adopt low-carbon strategies, while command-and-control policies and firms’ perceptions of the risk of resource scarcity were factors that seemed to have the most influence on corporate decision-making. Multinational oil and gas firms headquartered in Canada appeared to be more likely to adopt low-carbon strategies than foreign multinational oil and gas firms. This research contributes to a better understanding of the key factors that affect corporate decision-making concerning GHG emission-reduction policies. Regulatory action based on significant engagement with affected stakeholders would appear to be particularly important in creating a broad base of support and pressure for action on climate change.
•Certain stakeholders appear to be more effective at driving climate change than others.•Investors and employees seem to be not as committed to low carbon strategies.•Regulatory pressure and firm risk perceptions seem to be the most influential.•The ability of the media to leverage GHG-friendly practices by firms is limited.•Low carbon adoption appears more likely from Canadian rather than foreign firms.