are now looking for improved disclosure of ESG-related issues supported by quantitative data to garner capital, he told this year’s Independent Petroleum Association of America’s Private Capital Conference. “ESG now impacts all access to capital – your


insurance, your banking and your equity, is all heavily influenced. Now, it’s not the end all be all, but it is heavily influenced by your ESG profile.” He said investors were not only basing their capital


allocation decisions on how well executives absorbed ESG practices into their businesses, but were also agitating for qualitative and quantitative ESG metrics to better examine which companies could compete within the transition towards carbon-free. Yet, Fortune magazine reported in February that,


with oil prices surging and with governments pushing for action to address the climate crisis, some analysts and ESG investors expected oil and gas companies to take advantage of their bumper profits and invest more in low-carbon technologies. “But Big Oil has taken a different tack. High commodity prices are good for existing production streams, and so... the oil majors are shoring up their business by repaying the debts they’ve accumulated over Covid-19, increasing their dividends, and buying back shares. “And as big oil companies funnel cash back to


investors and strengthen their balance sheets, they are taking their foot off the gas on green investment.”


THE DEVELOPMENT DIMENSION Additionally, fears persist that, if ESG results in oil companies pulling back from traditional development projects across the globe, it could deny people in the developing world – especially in Africa – from enjoying the benefits that have been regarded as the norm for so many years in the West. Mohammed Barkindo, Secretary-General of OPEC,


recently insisted that it would be a tragedy if Africa’s oil and gas resources became stranded assets because of the global drive towards decarbonisation. He described any talk of halting investments in the sector as misguided. “It would be a tragedy of unimaginable proportions if,


despite billions of dollars being poured into investments for these resources (oil and gas in Africa), they went west as stranded assets,” he told an energy conference in the Nigerian capital, Abuja. “The environmental aspect of ESG is perhaps outweighing the need to address the social and development issues.” Mr Barkindo described the oil industry as “under


siege” by climate change activists while development needs were being overlooked in Africa – a continent, he said, that accounted for less than three per cent of global carbon emissions and an area where almost 600 million people had no access to electricity. “Any talk of the oil and gas industries being consigned


to the past and of the need to halt new investments in oil and gas is misguided,” he added. Steve Kayizzi-Mugerwa, Professor in Global


Human Development at Georgetown University in Washington and a former chief economist at the African Development Bank, agrees. “The net-zero concept has moral, economic and geopolitical questions: how will the Western world and its development institutions help eradicate economic poverty in Africa while on the other hand preventing the continent from developing its


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abundant energy resources – in other words, natural gas in Tanzania and Mozambique and so on? “Does this not, in effect, perpetuate energy poverty,


which has been a huge driver of the decimation of forests in sub-Saharan Africa? In terms of industrialisation, how will that happen without cheap energy? Will African countries be punished for using the same carbon- intensive techniques that powered Western affluence?” The oil and gas industry, it seems, is on the horns of


a dilemma. Unfortunately, that means the future of the world’s climate is on one, too.


DAILY NEWS


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“ The net-zero concept has moral, economic and geopolitical questions: how will the Western world and its development institutions help eradicate economic poverty in Africa while on the other hand preventing the continent from developing its abundant energy resources?”


STEVE KAYIZZI-MUGERWA, GEORGETOWN UNIVERSITY, WASHINGTON


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