As one of the biggest drivers of the ongoing climate catastrophe, the oil and gas industry is at the centre of a global race to cut down on fossil fuel consumption and slow global warming. The industry is also among the most male-dominated of all major industries — women comprise just one-quarter of its total workforce and one percent of industry CEOs globally, according to the Boston Consulting Group.
Research now suggests that these two issues might not be so separate.
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A study by FP Analytics into companies within male-dominated “legacy” industries such as construction, energy and mining found a positive correlation between female representation in board positions and ESG [environmental, social and governance] performance. It also found that companies with higher gender diversity on boards were 60% more likely to reduce energy consumption and showed a 74% improvement in CSR [corporate social responsibility] exposures such as labour rights and local community interests.
Women leaders can help restore public mistrust
These findings are a public relations saving grace for an industry that has long been criticised for using progressive issues such as gender inequality to distract from the environmental damage it causes — the hidden assumption being that fixing the former has no tangible impact on the more pressing issue of the latter. But now companies can frame it differently: hiring more women in executive roles can support both their gender diversity objectives and their net-zero ambitions.
Women leaders can help restore the public’s mistrust in other ways, too. For example, studies have shown that companies with higher female representation in board positions tend to be more open and honest about their ESG performance. Research conducted by the University of Portsmouth, Brunel University and Loughborough University into 3,902 companies over 14 years found that women leaders were less likely to exaggerate the gap between their companies’ ESG policies and actual ESG performance — a practice known as “decoupling.”
One of the reasons oil and gas companies are falling behind on sustainability is arguably the lack of a profit motive. Hiring women leaders can help in this respect. For more than a decade, there has been evidence that strong female representation in senior and board level positions results in better financial performance and risk management. In 2012, Credit Suisse published a landmark six-year study of 2,360 companies that found investing in those with women on the board delivered higher returns on equity.
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By GlobalDataClosing the eco gender gap
There have been some positive signs of change. In 2022, the European Commission issued a directive that requires at least 40% of non-executive director roles and 33% of all board positions in large listed companies to be held by women. Countries such as Spain have put legislation in place to achieve this. Additionally, a growing number of large companies are hiring chief sustainability officers (CSOs). Women now hold more than 50% of these positions globally, compared to just 11% in 2011.
Ultimately, more female representation in executive or strategic roles can help curtail the excesses of the oil and gas industry while harmonising DEI (diversity, equality and inclusion) and ESG strategies and increasing profits. Rather than confronting the issue of fossil fuel dependency as distinct from gender inequality, companies should address both together.
