Abstract

The case study discusses the efforts of Equinor, a multinational oil, gas, and energy company, to transition to clean energy. Equinor was providing oil, gas, wind energy, and solar energy to more than 30 countries as of 2022. The case touches upon the oil and gas operations of Equinor that led to massive criticism by environmentalists against its various projects in ecologically sensitive areas and the oil spills it was involved in over the years. The case then describes Equinor’s shift from its traditional business model whereby it established the New Energy Solutions unit as a dedicated business unit in 2015 to support the company's renewable energy expansion. The new division attempted to accelerate investments in the renewables space through a series of acquisitions. In 2018, the company rebranded itself from Statoil to Equinor to reflect its transition away from oil and gas. The case focuses on the company’s other efforts toward clean energy transition after it announced plans to achieve carbon-neutral global operations by 2030 and to reduce absolute greenhouse gas (GHG) emissions in Norway to near zero by 2050. Equinor also decided to establish renewables as a separate reporting segment from the first quarter of 2021. In spite of Equinor’s climate action pledges, the company faced criticism for what was described as its greenwashing practices. It sold half of the wind assets it had acquired earlier. Equinor was criticized for lack of transparency in reporting and for promoting fossil fuel gas by increasing its oil trading to levels that were nearly equivalent to what it produced. Amidst these developments, it remained to be seen to what extent the intent shown by the company’s leadership would translate into measurable outcomes and if it would help Equinor achieve its net zero ambitions by 2050.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the concept of greenwashing
• Become aware of the drivers of greenwashing
• Examine why companies resort to greenwashing practices
• Explore an operating model to flourish in a low-carbon world
• Analyze the sustainability initiative of Equinor

Keywords

Energy Economics; Sustainability, UN SDG Goals; Growth Strategy; Corporate Governance; Corporate Ethics; Business Model; Oil Economics