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No industry is as visible and active in the climate change debate as the energy industry. Almost every day, managers are addressing the short-term and long-term implications of their policies for dealing with this issue. The authors of this article interviewed over 50 managers in 8 firms in the oil and gas industry and found that companies that address the short-term and long-term threats and opportunities of climate change can gain a significant competitive advantage.
The trouble with mitigating climate change is that the benefits are uncertain and distant.1
The timing and timeframes of climate-change initiatives may be critical to business success. For example, there are opportunities to balance financial and environmental goals in the short-term - such as improving energy efficiency - which can often create an immediate win-win for firms. Yet some of the most rewarding initiatives may be those in which the payback occurs over a longer period of time. However, these long-term initiatives have benefits that are difficult to quantify, making the business case challenging.
In this article, we show how firms balance the short-term demands with the long-term opportunities of climate change. Our findings are based on a study that we conducted in Alberta's oil sands, from November 2008 to October 2009. We interviewed over 50 managers in nine different companies, as well as representatives of NGOs, think tanks, and consultancies. We asked them how they thought about climate change, and what they were doing about it.
Some of the firms in our study successfully balanced the short with the long term, and realized both tangible and intangible benefits. In doing so, they were able to maintain their financial health, while addressing the significant challenges posed by climate change. These firms developed a thoughtful strategy towards climate change. They did not view climate change merely as an issue related to energy efficiency. They also recognized the political, environmental, and social dimensions. One executive explained: "There's a number of pieces that I think all need to fit together. I don't think there is a single solution." These firms recognized that there is no silver bullet - firms need a range of actions, well beyond achieving energy efficiency.
Balancing short- and long-term goals
Firms that could manage the short term while...