How to push oil and gas companies to realise climate change mitigation

Abstract

Purpose of the article – The article aims to provide guidance to governments, companies and civil society for real-world sustainable market transformations. Research methodology – Sustainable market transformations (SMTs) are key to creating long-term sustainable development. Literature on sustainable market transformations focuses on how markets can move from unsustainable to more sustainable. We apply the Sustainable Market Transformation Framework (SMTF) to the Oil & Gas sector in Europe (2017-2022). To analyse whether and in which way a sustainable market transition is unfolding, we use Lessig’s Modalities theory (1998). Lessig identifies four regulators— Market, Law, Architecture and Norm —that influence behaviour of individuals and organisations. Findings –While the regulator Law has actioned the sector towards Phase 1, it is the interplay between the Norm and Market that dictates the pace. Since 2019, a shift occurred, underscoring the primacy of the regulator Norm as the principal driver of industry behavior. The role of Architecture proves to be more of a passive factor. It is the nuanced interplay between the regulator Norm and Market that ultimately shapes the speed and direction of the companies within the sector during 2017-2022. Practical implications – We recommend that strong influence be exerted by governments, other companies, civil society organizations to influence the cultural Norms in the sector. The regulator Law can assist therein as Law can directly and indirectly drive the other three regulators. Originality/Value – The findings provide guidance for real-world sustainable market transformations. It also deepens the conceptual understanding of the SMTF by developing a research protocol that can be used by other researchers to examine other (high-risk) sectors over time.

Keywords

• sustainable market transformation framework (smtf), lessig’s modalities theory, oil and gas sector