The study of ESG strategies on the development and financial performance of traditional energy enterprises using System Dynamics - A case study on one oil and gas company

Abstract

This thesis investigates the impact of Environmental, Social, and Governance (ESG) strategies on the development and financial performance of traditional energy companies, specifically focusing on the oil and gas industry. This study constructs a comprehensive simulation framework from System Dynamics modeling to analyze the dynamics of ESG strategies and company operations. The research applies this model to a case study of BP PLC, a major player in the oil and gas sector, to evaluate the effectiveness of ESG strategies on a realistic scale. The model demonstrates that strategic implementation of ESG initiatives leads to improved environmental performance, operational efficiency, and financial performance. The findings suggest companies and policymakers to take firm and prompt actions in investing production efficiency and renewable energy to mitigate future regulatory risk and market uncertainty. This thesis contributes to the perspective of achieving sustainability goals while maintaining profitability. It also provides insights into the challenges and opportunities faced by these companies as they navigate the transition towards more sustainable landscapes.