Despite intensifying investor pressure and urgent warnings on the need to diversify away from their core business, larger oil and gas companies look to be failing to meet the economic and environmental challenges, which could impact their long-term future success, research suggests.
In its most recent report on climate change, the UN said that in order to limit global warming to less than 1.5°C above pre-industrial levels it will require "rapid and far-reaching" transitions across the economy - especially in the energy sector.
However, evidence suggests that oil majors are not taking the lead on this with research from the Carbon Disclosure Project (CDP) showing the proportion of capital expenditure on low-carbon investments is still small at some companies.
Between 2010 and 2018, oil giant Total allocated 4.3% of its capital expenditure to low-carbon investment, compared to just 0.01% by Petrochina, for example.
In addition, Imperial College Business School's Centre for Climate Finance & Investment March report found investors are struggling to differentiate effectively between companies in the oil and gas sector with regard to their efforts to transition away from fossil fuels and "often follow simplistic, rule-based indices".
It continued "spending on R&D and capital investment directed to low-carbon activities shows significant variation by company".
For example, European companies are better engaged with the transition and are "more effectively taking the necessary steps to limit their exposure to climate risks", than the North American firms, with ExxonMobil and Chevron "bottom of the ranking", the report added.
Helal Miah, investment research analyst at The Share Centre, explained while "investing in environmental and renewable energy is not exactly a token gesture from oil majors", the issue is conventional oil is still "far too profitable for them to ignore".
He added: "It is also important to remember we are still going to be hugely dependent on oil for years. There is still a huge amount of profit to be generated."
So-called 'peak oil' - the point in time when oil production is expected to reach its peak before heading into terminal decline - is often predicted in academic studies to occur by sometime around 2030.
However, critics point out peak oil was originally predicted to happen in 1970, before new sources of oil and excavation techniques were discovered.
Founder and CEO of ESG investment specialist Earthworm's Ben Prior said while "any ESG investment should discount the oil sector outright" there is "an interim need for natural gas on the path to full renewables".
With regard to oil executives, Prior called them "incredibly short-sighted and the worst neo-liberals actively trashing the planet", and because of their "blinkered view not to invest more and transition earlier" to alternative energy sources, "the looming climate catastrophe is squarely their fault".
He added that engagement efforts from investors hoping to encourage a quicker transition could be fruitless as "history would tell us that they do not listen".
Prior said: "Exxon has been studying carbon emissions since the late 1950s. They've known the consequences of their greed for decades.
"Forbes reckons the five largest oil and gas companies spend $200m a year on lobbying. Imagine how much further along we could be if policy makers cared."
Carbon Tracker oil and gas analyst Andrew Grant explained the failure to engage fully with the transition to a low-carbon economy has its roots in investor pressure and how 'big oil' CEOs are incentivised.
He said: "Since the crash in oil prices there has generally been pressure from investors to focus on delivering the highest possible returns from their investments rather just getting bigger for the sake of getting bigger.
"Although executives are incentivised by a range of metrics, there still tends to be an element of being rewarded for increasing production or reserves - in other words, using more fossil fuel."
"While there is a recognition the fossil fuel world will need to get smaller if we are going to be successful with our climate aims, management are being incentivised to do the total opposite."