Our Take: The Olive Decade

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The Western majors have planned their road maps for the first phase of the energy transition. But decarbonization, even at the more aggressive European majors, will not happen overnight. We see the group's strategic success contingent on selling to investors, and other stakeholders, the "olive" model -- the greening of a carbon-intensive industry, rather than its shuttering. Rigorous execution of medium-term goals is required to counter skepticism. Further radical shifts in the European majors' transition strategies -- such as commitments to bigger emissions cuts -- are unlikely, in our view, given widespread adoption of net-zero ambitions. After reaching out to advocates to build support for emissions-reduction goals, companies have little room to make further promises, other than refining existing targets. Royal Dutch Shell may decarbonize more quickly alongside customers or Total may extend its net-zero pledge beyond Europe. But such moves would drive incremental change, not even more reinvention.

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