The heads of the world's biggest oil companies have been holding closed-doors meeting in Davos this week, discussing two topics common for all oil firms-how to win investors back and how to respond to investor demands to start tackling climate change in earnest.
On the sidelines of the World Economic Forum in Davos, Chevron's chief executive Michael Wirth has discussed climate change in the context of the oil industry with the top managers at European companies BP, Shell, and Total, and with Saudi Aramco, Reuters reports. ExxonMobil's CEO Darren Woods was not present.
Oil majors have been facing an unprecedented pressure from investors to set emission reduction targets. Investors also demand higher returns for sticking through with oil companies during the downturn. The world's biggest oil companies also struggle to stay appealing to environment-conscious investors, who see them as the main culprits of carbon emissions and global warming.
"There is no doubt - and there is a consensus coming here in various meetings in Davos - that our industry is literally under siege and the future of oil is at stake," OPEC Secretary General Mohammed Barkindo told Reuters.
The real challenge of the oil industry is how to win investors back, according to Hess Corporation's CEO John Hess, who noted that the waning appeal of oil stocks has resulted in the share of energy companies in the S&P 500 dropping in ten years to 5.5 percent from 16 percent.
Related: An Unlikely New Hotspot For Energy Storage
Last year, the UN's Intergovernmental Panel on Climate Change issued a special report on the climate situation on the planet, saying that the world needs to spend US$2.4 trillion every year until 2035 if it is to slow down the effects of climate change.
Among oil majors, Shell, for example, plans to double the annual amount of money it invests in renewable energy to US$4 billion, the supermajor's head of gas and new energy, Maarten Wetselaar told The Guardian in an interview last month. The figure is double the maximum current annual investment Shell has allocated for cleaner energy initiatives but the increase will only materialize if these initial investments prove to make financial sense.
Earlier in December, Shell said that it plans to set short-term emission reduction targets and link these targets with executive pay, yielding to growing investor pressure about establishing short-term emission goals.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More