From Oil to Renewables: How ESG is fueling it?

As we embark on this intriguing and transformational expedition, we’re transitioning from a world that produced an astounding average of 80.75 million barrels of oil per day in 2022, yielding an annual crude oil production of around 29.5 billion barrels. With a market size exceeding $2 trillion at current prices, oil, commonly referred to as black gold, has been the cornerstone of our global energy landscape. Now, our focus is shifting to the sustainable and bright landscapes of renewable energy. The catalyst behind this dynamic shift? It comes down to the powerful trifecta of Environmental, Social, and Governance (ESG) principles. Let’s equip ourselves for a deep dive into this significant corporate metamorphosis.  

Now you may be wondering, “What’s the connection between ESG and the shift from oil to renewables?”  

Well, it’s simple. The tides are turning, and we’re seeing an extraordinary shift in the global attitude towards energy production and consumption. A new generation of consumers and investors is stepping up, putting the planet first and looking for ways to invest in a sustainable future. That’s where ESG comes in.  

Investors are using ESG as a compass, guiding their investments towards companies demonstrating strong commitments to environmental sustainability, social responsibility, and sound governance. Now, this isn’t some nice-to-have trend. We’re talking about a massive financial shift. Global sustainable investment reached $35.3 trillion in 2020, representing 36% of all professionally managed assets. Impressive, isn’t it?  

So, what’s the impact on the oil industry? The rise of ESG investing is pushing traditional oil companies to transform their business models and pivot towards renewables. Think BP’s plan to cut oil and gas production by 40% by 2030, or Shell’s ambition to become a net-zero emissions energy business by 2050. 

On the other hand, renewables are having their day in the sun. Pun intended! The renewable energy sector is experiencing unprecedented growth, with wind, solar, and other renewable sources attracting a lion’s share of ESG-driven investments. The International Energy Agency (IEA) estimates that by 2025, renewable energy capacity will expand by 50%. 

But why should you care about this? Because we’re all in this together. Whether you’re a business leader, investor, or consumer, you play a role in shaping our energy future. Are you part of an organization? Ask about its ESG policies. Are you an investor? Consider channeling your investments towards ESG-compliant, renewable-focused companies. Are you a consumer? Support businesses making a genuine effort towards sustainability. 

The road from oil to renewables may be long, but it’s well-lit with the promise of ESG. As we wrap up our exploration of the oil-to-renewables shift powered by ESG principles, the need for precise ESG data management and reporting is clearly highlighted. This is where cutting-edge solutions like Credible, a robust ESG data management and reporting platform, truly shine. 

Credible streamlines ESG complexities, offering a one-stop platform for trustworthy data gathering, management, and reporting. It equips organizations with the tools to accurately track and report ESG efforts, thereby fostering confidence in transitioning from conventional to renewable energy sources. By delivering actionable insights, Credible propels informed decision-making, aligns with the green energy transition, and supports the global sustainability movement. 

Let’s fuel this shift with our choices, one decision at a time. 

Are you seeing the ESG shift in your industry or community? Let’s continue the conversation in the comments below! 

Until next time, keep thinking green!