Extractive industries: transforming companies for better development outcomes

Companies in the oil, gas, and mining sectors face ever intensifying scrutiny over their environmental, social, and governance (ESG) practices and impacts: from civil society but also from investment funds and other stakeholders with ESG mandates. Companies with good practices-and the paper documents significant progress since 2000-can deliver substantial benefits to host economies: both local and national. The paper suggests further ways in which they could enhance their impacts in partnerships with government. Unfortunately, there are also companies that are at best cynical about their ESG impacts, or uncaring: the worst outcomes arise when they coexist with exclusive governments favouring elite interests. The paper also discusses the issues arising for companies from the eventual stranding of fossil fuels: international companies may exit oil and coal, and shift to renewables, at a much faster rate than national oil companies. The latter pose a potential macroeconomic risk.