In a world increasingly dominated by populism and a failure to address the big issues, Equinor CEO Eldar Sætre argues that the oil and gas industry must act forcefully to ensure transparency, win trust, and tackle climate change. He spoke at CERA Week, on March 11.

“What could we achieve if we aligned our entire industry in a forceful intiative for change?“

CERA Week is probably the arena that gathers the broadest audience within our industry — which also means that it represents an ideal opportunity to send a powerful message from the industry, says Equinor CEO Eldar Sætre.

”Multiple signals and reports tell us that the oil and gas industry can be facing a crisis of confidence. And that lack of trust will increasingly reduce our ability to influence and shape our own future.

Personally, I consider this to be more than just weak signals. It is in fact a real threat to our licence to operate, unless we proactively and collectively address it. 

There used to be a saying in politics, that to succeed, you must understand and respond to the big questions of your time. And now, more than ever, what we need from politicians is exactly that: holistic thinking, and long-term solutions. But what we see, is unfortunately rather the opposite.

Populism is not an option

Politics is becoming ever more short-sighted. It is being increasingly dominated by populism, leaving the big questions unanswered.

For a long-term business like ours, populism and short-term solutions are not an option. Therefore, we must increasingly learn to manage through political cycles, in the same way as we have always managed through commodity cycles.

Today, I want to share some reflections around how the oil and gas industry actually can respond to some of the big questions of our time. And do it in a way that can sustain trust in our industry also for the long term. Such an approach requires that we act ourselves, and engage constructively with ongoing processes outside the industry that will eventually impact us anyway.

  • CERAWeek is the premier annual gathering of senior energy executives, innovators and honoured officials offering dialogue and insight into the energy future.
  • 11-15 March 2019 in Houston, Texas

Look to the UN development goals
Two of the main challenges are reflected in the UN Sustainable Development Goals: Number 7 on affordable and clean energy for all, and number 13 on climate action. And as the climate and carbon challenges increasingly dominate both the political and public debate, expectations to us are growing. Partly because politicians are failing to come up with good answers. But also because we are not seen to fully recognise the issue, nor responding adequately.

And it is not only about climate change. Gradually we also face higher expectations regarding the broader sustainability agenda, including issues like environment, social engagement and transparency. Which means that these ESG topics must take a broader place on our agenda as well.

And, let’s face it, the increased pressure and higher expectations are not only coming from narrow political groupings, and activists — as they used to — but increasingly also from broader political circles, from more and more investors, and not least from young people. 

Addressing the challenges
Adequately responding to a challenge starts with truly acknowledging that you have one. But where politics tends to be long on words and short on action, we should strive for the opposite.  Action is what’s expected. And action is what’s needed.

Not taking action is unsustainable, for the planet, for people, and for business. It would represent an increased business risk. For bad regulations. For unstable financial frameworks. And for pendulum swings in political initiatives. And over time, for not attracting the talents and capital we need.

Dear industry friends: we are much better off acting ourselves — avoiding that others act upon us. On the positive side, I do see quite a few good initiatives from a growing part of the industry, which is truly inspiring. And OGCI is one of them. But, collectively, we are not doing enough.

So let’s just imagine what it could mean if we managed to align the entire industry, big and small, behind a set of clear ambitions and actions, while forcefully collaborating and engaging in key ongoing political processes, like the ones driven by the UN.

I shall not pretend to have all the answers. But let me highlight three dimensions that I am convinced will be increasingly important for our credibility going forward: more transparency, action on climate, and engagement with society.

What if we aligned around increased transparency, the currency for trust, based on the framework from the Task Force on Climate-related Financial disclosure? What if we all set ambitious targets for reduction of CO2 and methane emissions, and then linked climate performance to remuneration? And what if we all stepped up the engagement with our critics, and in particular with the younger generation, in a true dialogue, listening carefully, speaking with, not at?

The world’s energy system must be transformed in a profound way to drive decarbonization. And by engaging in a respectful dialogue, supported by real action, we can demonstrate that we are committed to accelerate — not slow down — the transition. I’m convinced that these are much-needed elements, in a recipe to restore confidence and secure legitimacy.

I strongly believe, that we — the oil and gas producers — can make a significant impact by investing and engaging to fight greenhouse gas emissions. Only in this way can we be accepted as a partner in shaping solutions, and not only a source of the problems. And only in this way can we secure a continued licence to solve the dual challenge of the two SDGs.

To communicate better and more sincerely, is essential. But action is even more important, when responding to a new reality. Each company must define what is right for them. But to do nothing, is not a meaningful option.

By acting forcefully, I believe we can increase trust, and impact the long-term framework for our industry.

Thank you very much for your attention.“ 


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