The Strategist

BCG: 60% of oil and gas investors feel pressure over green agenda

01/12/2022 - 06:38

Almost 60% of oil and gas investors worldwide believe they are under pressure from clients to make their investment portfolios greener, according to a survey by international consultancy The Boston Consulting Group (BCG).

"Almost 60% admitted to being pressured by clients to divest from fossil fuel investments," according to conclusions of BCG's 2021 Energy Impact Center (CEI) study, in which the authors surveyed 250 institutional investors working with the oil and gas industry.

In particular, according to the presentation with the survey results, clients expect to increase investment in green funds and equities from 75% of respondents, actively tracking ESG performance from 74% of respondents. For 2020, the proportion of investors responding positively to these questions was six and nine percentage points lower, respectively.

In addition, 65% of respondents feel pressure to reduce the share of fossil fuels in their portfolios, versus 55% in 2020. And 57% of investors feel they are being encouraged to divest from fossil fuel investments. A year earlier the figure was 45%.

The authors of the study predict that pressure is likely to continue to grow: only 39% of investors now factor climate risk into their valuations of oil and gas companies, with a further 40% saying they plan to adopt the practice. Most of those surveyed acknowledged that the oil and gas sector has taken initial steps to improve its environmental performance, but those steps are not enough.