“Moving from a global economy that relies on fossil fuels for 80% of its energy to something else is a really, really big job,” said Daniel Yergin, the energy historian with a book forthcoming, “ The New Map, ”On the Ongoing Transition in Energy. But he noted, “These companies are really good at handling the complex, large-scale engineering that will be required for a transition of this magnitude.”
Financial analysts say dreadnoughts are already changing course.
“They do it because management thinks it is the right thing to do and also because shareholders are putting pressure on them,” said Michele Della Vigna, head of natural resources research at Goldman Sachs.
Already, he said, investments by large oil companies in low-carbon energy have reached up to 15% of capital spending, on average, for 2020 and 2021 and around 50% if natural gas is included.
Oswald Clint, an analyst at Bernstein, predicted that major oil companies would expand their businesses in renewables like wind, solar and hydrogen by about 25% or more each year over the next decade.
Shares of oil companies, once mainstays of the stock market, have been cut back by investors in part because of the risk that concerns about climate change will erode demand for their products. European power companies are seen as having done more than the oil industry to embrace the new energy age.
“It is very difficult for an investor to be confident that he can achieve this,” Mr. Clint said, referring to the oil industry’s aspirations for change.
But, he said, he expects funds to return to oil stocks as new companies gain momentum.