Big oil’s climate pledges will fail without workforce equality

oil

(Nik Owens, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Katie Mehnert, Founder, Pink Petro


• Research show gender diversity increases innovation levels.

• The oil and gas sector is lagging on female representation, and other diversity measures.

• The energy giants’ climate commitment could rest on putting concrete diversity plans into action.

My alma mater BP has taken a step in the right direction by committing to achieve net zero emissions by 2050. The company, worth well over $100 billion, also vowed to “help the world get to net zero”, saying it would “fundamentally reorganize” in order to make all this happen.

It’s the latest in a string of commitments from fossil fuel companies about the ways in which they’re joining the climate fight. In 2018, Shell announced its plan and framework for the energy transition, tying its executives’ compensation to climate targets. Previously, 13 oil and gas companies announced the Oil and Gas Climate Initiative, which will spend over $1 billion and work with the World Economic Forum to “collaboratively advance technological solutions and to catalyze meaningful action and coordination on climate change”.

 

As with these previous moves, BP’s net zero promise was met with a mix of scepticism and hope. That’s to be expected, given the incredibly high stakes – and the fact that, as the New York Times put it, these companies are “caught between investors who want greener energy and those who simply want a strong return on their investments”.

Living and working in the energy sector in Houston, Texas, where a large number of these companies are based, I know that there is genuine commitment among executives to take action on climate change. But I also know that for these initiatives to succeed, the industry needs to do something else: Build a gender balanced, diverse workforce. And on that front as well, it has a long way to go.

Diversity spurs innovation

When companies make commitments about carbon emissions, they acknowledge that achieving them will require a great deal of innovation. As BP CEO Bernard Looney put it in his statement, “It will require nothing short of reimagining energy as we know it.”

He’s right. But to reimagine how one of the world’s biggest industries operates, we need to tap into a vast array of imaginations – those based on all sorts of different life experiences.

Numerous studies show that gender equality increases innovation. One found “a positive relationship between the gender diversity scores of new venture teams – reflecting the increased presence of women – and the innovation performance of new ventures.” Another found that “gender diversity in R&D teams can promote innovation efficiency by providing informational and social benefits throughout the innovation process.”

The same goes for all forms of diversity. One study showed that for “innovation-focused banks, increases in racial diversity were clearly related to enhanced financial performance,” the University of California, Berkeley reported.

Women's participation and gender wage gap by industry.
Women’s participation and gender wage gap by industry.
Image: World Economic Forum

The energy workforce lags

Even as numerous industries struggle to make their workforces look more like cross-sections of the population, the energy sector in particular is running behind.

The Forum’s Industry Gender Gap report in 2016 found energy among the worst in representation of women. Catalyst reports that women account for 22% of the oil and gas workforce. (IRENA, the International Renewable Energy Agency, said last year that women make up 32% of the renewable energy workforce.)

In the United States, the figures are even worse for African-Americans. The Bureau of Labor Statistics reports that only about 5% of people employed in mining, quarrying, and oil and gas extraction are black, compared to 13.4% of the population.

Four years ago, 22 oil and gas companies released, via the Forum, a “call to action” to close the gender gap, which included a promise to reach “diversity goals and objectives”. My organization, Pink Petro, then assembled stakeholders to discuss what specific steps could help bring these goals to fruition.

We produced a report listing recommendations, which range from sponsorship, mentoring and coaching programs to recruitment and retention metrics, support for affinity networks, outreach to the STEM community and more. It’s time more energy companies everywhere take these actions.

The energy sector needs a major shift – a shift into high gear. If any of these commitments oil giants are making will come true, it will be the result of new, creative ideas, technologies, scientific discoveries and advancements provided by a diverse workforce.

Global brilliance

As I said in a speech at the International Petroleum Technology Conference in Saudi Arabia earlier this year, “Right now, there’s a brilliant girl in Africa, a brilliant boy in Asia, a brilliant teenager in the midwestern United States, a brilliant student right here in the Middle East, and a brilliant schoolteacher in Europe who will have the next big idea – or a piece of the next big idea. When we bring great people together, they can create changes we don’t foresee. Put simply, inclusivity fuels positive change.”

What’s the World Economic Forum doing about the gender gap?

The World Economic Forum has been measuring gender gaps since 2006 in the annual Global Gender Gap Report.

The Global Gender Gap Report tracks progress towards closing gender gaps on a national level. To turn these insights into concrete action and national progress, we have developed the Closing the Gender Gap Accelerators model for public private collaboration.

These accelerators have been convened in Argentina, Chile, Colombia, Costa Rica, Dominican Republic, Panama and Peru in partnership with the InterAmerican Development Bank.

In 2019 Egypt became the first country in the Middle East and Africa to launch a Closing the Gender Gap Accelerator. While more women than men are now enrolled in university, women represent only a little over a third of professional and technical workers in Egypt. Women who are in the workforce are also less likely to be paid the same as their male colleagues for equivalent work or to reach senior management roles.

France has become the first G20 country to launch a Gender Gap Accelerator, signalling that developed economies are also playing an important role in spearheading this approach to closing the gender gap.

In these countries CEOs and ministers are working together in a three-year time frame on policies that help to further close the economic gender gaps in their countries. This includes extended parental leave, subsidized childcare and removing unconscious bias in recruitment, retention and promotion practices.

If you are a business in one of the Closing the Gender Gap Accelerator countries you can join the local membership base.

If you are a business or government in a country where we currently do not have a Closing the Gender Gap Accelerator you can reach out to us to explore opportunities for setting one up.

To spring forward, the energy industry must finally tap into the most precious natural resource the world has: the hearts and minds of diverse talent.

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