We chose Keurig for our group, and my part is about the industry environment
We chose Keurig for our group, and my part is about the industry environment (3 pages) and recommendation (1 page)
Article Summary (part 1)
The Wall Street Journal article that Group 5 found to cover chapter 8’s topic of International Strategy is titled “After Defeating Exxon, Engine No. 1 Works With Oil Giants on Emissions” by Collin Eaton. The article discusses a recent move to get three of the United State’s largest oil companies to join the group: Oil & Gas Methane Partnership 2.0. This group is backed by the United Nations and aims to reduce greenhouse gas emissions. The article’s focus however was how this deal came into play. As the title reveals, the founder of company that defeated Exxon, Engine No. 1, is responsible for the deal going through. The founder took a friendly approach to the oil companies instead of attacking like they did with Exxon. He indicated that he wants to work with companies rather than work as an activist. The group that the oil companies has joined is dedicated to reducing emissions and acknowledges that field testing to prove reductions are necessary.
Test performed to check field conditions against industry estimates showed that the conditions were worse than estimated and that has put additional focus on the oil industry to correct their issues. They can no longer just report that things are better without the use of a third party. Oil companies have already been trying to reduce their emissions over the years, but this move signals that they will be under additional scrutiny to get their emissions reduced and to prevent methane leaks.
By joining the group, oil companies can appear to be more focused on reducing methane gas which is a major concern for the European market. If they can convince Europe that they are dedicated to maintaining lines and equipment to avoid leaks and environmental impact, then the oil companies will be in position to expand their market cap.
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Hi Tripp,First, thank you for the excellent coverage of this article. The piece is an interesting read. With respect to Christopher James, I am a bit suspicious whenever an activist becomes an industry insider, especially when there’s a financial conflict of interest.That is not to say I’m not totally opposed to James transitioning his role from outside agitator to global influencer. As long as the endgame remains to reduce methane emissions, the reposition could be strategic. What is not immediately clear is WHY James is choosing to suddenly deviate from his previously successful against Exxon. He may feel the friendlier approach has a broader strategic appeal than an aggressive one. I am also curious about what exactly is his new role with OGMP 2.0? Are there financial incentives for him to help broker the cooperation of ConocoPhillips and the other petrochemical companies? What are the financial implications for Engine No. 1, the investment firm started by James?I also found it intriguing that no targets were set during the initial stakeholders meeting in Houston. The author only reported there was a wide discrepancy in how emissions were measured and addressed. As you mentioned, one of the bright spots is the transparency promoted by OFMP 2.0 that requires third-party auditing of emissions and remedial measures. However I’d like to see a proposed timeline for some of these measures.
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