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Oil & Gas | Expert Opinion

Oil and Gas Companies Should Come Clean

Despite touting a sustainability emphasis, major oil companies are increasing oil and gas production investments, sowing mistrust among customers, employees and suppliers.

By Vikas Mittal and Sonam Singh, originally published by the HC Group.

Despite touting a sustainability emphasis, major oil companies are increasing oil and gas production investments, sowing mistrust among customers, employees and suppliers.

Exxon Mobil’s $59.5 billion acquisition of Pioneer, and Chevron’s $53 billion acquisition of Hess in October 2023, follow Shell’s March 2023 mea culpa that “the world will need oil and gas for a long time to come…cutting oil and gas production is not healthy.” 

By the third quarter of 2023, Shell had scrapped its target to reduce oil output by 1-2% annually, announced plans to invest $40 billion in oil and gas production in 2023-25, and downsized its low carbon division by 15%. “We will grow our oil and gas business over the next five years…we’ve got customers and economies around the world that depend on what we do to keep the lights on and trains running,” stated Mike Wirth, Chevron’s CEO stated on January 18, 2024.

Oil and gas companies’ increased investments in hydrocarbons diverge from their stated strategy emphasis on renewables. We gleaned their relative emphasis on renewables from annual-10K forms filed with the Securities and Exchange Commission. Using machine learning, we created a reliable and valid index of a company’s stated strategy emphasis on areas such as safety, sustainability, and quality. For example, 30% of a company’s stated strategy may emphasize sustainability relative to 10% emphasizing safety.

Exxon Mobil’s relative stated emphasis on sustainability increased from 33% in 2010 to 41% in 2022 while Chevron’s increased from 16% in 2010 to 37% in 2023, a 131% increase. Shell increased its relative sustainability emphasis by 509%, from 11% in 2010 to 67% in 2023.

That is, even as they increased their stated emphasis on sustainability actual investments in oil and gas continued increasing. This divergence between oil and gas companies’ actual spending and stated strategy emphasis creates cognitive dissonance among customers, employees, and suppliers. It increases their anxiety, mistrust, and disengagement and decreases satisfaction and loyalty.


June 2023 Pew Study found American consumers believe that diverting energy production from fossil fuels to renewables will either worsen or have no influence on prices paid for heating and cooling homes (62%), the electric grid’s reliability (67%), and prices of everyday goods (73%). Instead of embracing their customers’ value drivers and focusing their strategy on satisfying customers’ need for affordable, reliable, and clean energy, oil and gas companies have increased their sustainability rhetoric. This discord has increased customers’ anxiety and mistrust.

Companies increase customer loyalty and sales when they display clear alignment between their stated strategic emphasis and actions aimed at satisfying customers. McDonald’s stated strategic emphasis and actual actions are aligned to satisfying customers with tasty food, served swiftly at a low price—without pretending to promote health.

Since 2010, McDonald’s stock has increased 432% compared to a 17% increase in Shell, 52% increase in Exxon Mobil, and 136% increase in Chevron.


2022 survey of oil and gas industry employees found 60% do not feel in control and 46% feel like running away. One reason may be the dissonance from the mismatch in their company’s strategy rhetoric and reality of their daily work. A senior executive in the exploration division of an oil and gas company shared: “Our daily work is to discover oil and gas, but the company’s stated strategy is drifting to renewables. 

In townhalls, a vocal minority vehemently says exploration lacks meaning if it cannot be linked to renewables. This fosters resentment and turnover among many in the silent majority.” A 2021 study found employees who sense dissonance between their personal and organizational values are 54% less likely to stay with it in challenging times.

2023 survey of oil and gas sector employees found 49% are considering moving to renewables. Oil and gas companies’ stated emphasis on renewables may be driving the shift. One MBA student stated, “I have a stable job as a reservoir engineer. But everything around makes it seem that renewables is where I should be.”

Oil and gas companies need more, not fewer, employees and they won’t attract and retain the best employees without cleanly aligning their stated strategy and actual investments to their customer’s value proposition—reliable, affordable and clean energy from hydrocarbons.


When bidding on a project for an oil company, the VP of sales at an oilfield services company was told: “Your proposal meets technical specifications, and your delivery and pricing are great. Can you add a section on sustainability so we can check the box?”

Suppliers get the hint. Halliburton increased its relative strategy emphasis on sustainability from 7% in 2010 to 18% in 2023 without making any big sustainability investments. SLB, formerly Schlumberger, increased its stated strategy emphasis on sustainability from 8% in 2010 to 28% in 2023, rebranded itself as a sustainability champion, and even appointed a Chief Strategy and Sustainability Officer.

Such shifts can distort suppliers’ long-term strategy. One supplier may engage in strategic self-deception—increase its stated emphasis on renewables while staying on course to serve traditional oil and gas (“Its lip service, neither we nor the client is serious”). Another may engage in strategic self-sabotage—shift a large part of its portfolio to renewables, only to find out that the shift is not matched by oil and gas customers’ portfolio (“We don’t know the client’s real intent, but we are serious”). Both types of distortions hurt suppliers’ strategic focus cascading to employees and investors. 

Coming Clean

Industry insiders suggest the divergence between stated emphasis and spending reality may be senior leaders’ desire to genuflect to activist investors who see sustainability as part of the ESG agenda or to appease climate activists. Unfortunately, research shows neither ESG investing nor activist appeasement increases a company’s long-term stock returns.

Instead, long term stock-returns accrue to companies that consistently satisfy customers by focusing employees and suppliers to excel on their customers’ most important needs. The most important customer needs of oil and gas industries’ customers are affordable, reliable, and clean energy—in that order. They are not sustainability, net zero, or climate change.

Employees of oil and gas companies want fulfilling jobs satisfying customers while their suppliers deserve long-term strategic clarity and consistency. For this, oil and gas companies will need to come clean by aligning their stated and actual emphasis on producing oil and gas as the predominant means of providing affordable, reliable, and clean energy to customers.

Vikas Mittal is the J. Hugh Liedtke Professor of Marketing at Jones Graduate School of Business at Rice University. He is also the co-author of the book FOCUS: How to Plan Strategy and Improve Execution to Achieve Growth.

Sonam Singh is a doctoral candidate in marketing at Alvarez College of Business at University of San Antonio, Texas.

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