Helping Investors and Oil & Gas Companies Make Informed and Sustainable Decisions

Join me from 3:30 to 4:30pm to learn more about my research!

Meeting ID: 458 935 7496

Passcode: 031350

Abstract

Investors use sustainability reports to evaluate a company’s environmental performance and make informed investment decisions. Investors are using the reports to closely watch the oil and gas industry’s environmental performance because of inherently high environmental risks, which they are required to mitigate thus incurring costs. Investors are increasingly concerned about the industry’s ability to maximize returns on investment. This study aims at helping investors with their decision to invest in the industry and assist oil and gas companies in building a business case to ensure environmental and financial performance are improved. Existing literature discussing the association between environmental and financial performance is inconclusive. Studies on environmental strategies present two gaps. It does not identify specific strategies companies can implement and does not explain how to implement them. This study investigates two research questions for the industry: is there an association between the environmental and financial performance and are there specific strategic choices companies can make and implement to optimize environmental and financial performance. The study uses eco-efficiency scores and financial metrics collected against the SASB framework to answer these questions. It uses an inductive coding and benchmarking process to identify the best performers and their choices. The findings demonstrate a negative but weak association. They also indicate that there are a few sets of strategic choices companies can implement and identify ones that are crucial to implement. The study thus has theoretical implications that advance corporate sustainability research. It has practical implications for the industry, investors, and corporate managers.