Contradictory Stakeholder Pressures/Influences for the Oil and Gas Industry’s Environmental Performance-Implications for the Current Era

Due to immense pressure from various stakeholders, for better environmental performance from the oil and gas sector, oil and gas companies have been (at least) projecting an image of better environmental performance. More recently, due to political developments, for example, in the United States, government pressure seems to be lessening; on the contrary there seems to be increased support for the oil and gas sector, in the second largest polluting country, globally. As a timely focus, this study examines the impact of multiple stakeholders’ related independent variables, specifically government influence, on the environmental performance of the oil and gas sector. A survey approach has been adopted for data collection, and structural equation modelling (SEM) has been used to undertake factor analysis. Stakeholder theory has been employed to discuss the survey results. Results demonstrate that governmental, customer, and employee pressures have a significant positive effect on environmental performance in the oil and gas sector. Relaxed government approach thus poses as a major risk against the environmental performance of oil and gas companies. Government support of the oil and gas sector has a negative impact on the influence of other key stakeholders, for example NGOs. Due to the more dominant influence of the government, NGO pressure becomes weaker, and insignificant, as highlighted by our study. In circumstances like these, NGO pressure and investor pressure may not have a significant direct effect on improved environmental performance of oil and gas companies, due to a high level of government support for the sector. Originality/value: This study offers empirical insights into stakeholder pressures on the oil and gas sector, contributing to stakeholder theory by highlighting the fluidity of significant stakeholder influence on environmental governance.