Abstract

Background: The oil industry is experiencing tremendous challenges due to the shifts in global markets and decreasing profits from oil. These challenges have steered companies to select more profitable investments and disregarding different matters of sustainability. However, the oil companies aim to be seen as more sustainable, since the demands of the public and governments increased toward sustainability. Thus, improving sustainability capabilities in the oil industry has become more critical than ever. In this study, the triple bottom line framework is used, which covers the social, environmental, and economical dimensions of sustainability. This study focuses on reactive and proactive practices that can overcome the barriers to achieving sustainability. Furthermore, the focus is on the oil industry’s pursuit of sustainability is facilitated by connecting reactive and proactive practices to improve the sustainability capabilities of a company.

Purpose: The purpose of this study is first to identify the barriers to achieving sustainability in the oil industry and understand how companies can overcome these barriers by conducting reactive and proactive practices. Furthermore, the purpose is to understand how reactive and proactive practices can improve companies' capabilities for sustainability performance.

Method: This study follows the inductive approach, as the aim was to discover new insights and assumptions from the studied phenomenon. Furthermore, the study is conducted as exploratory and qualitative, in order to provide a rich understanding of the barriers of sustainability within the oil industry, and how reactive and proactive practices can facilitate the capabilities for improving sustainability in companies. For the data collection method, semi-structured interviews were conducted with experts working within a single company that operates in the oil industry. The collected empirical data was analyzed with grounded analysis.

Conclusion: With the empirical findings and existing literature, the internal and external barriers to achieving sustainability are identified. Furthermore, the connection with identified barriers and reactive and proactive practices is introduced, as well as how the practices facilitate overcoming these barriers. Also, the study connects reactive and proactive practices that improve sustainability capabilities in companies. The study suggests that practitioners focus on developing a solid foundation of reactive practices, on which to build strategies with proactive practices. Primarily the focus on the oil industry should be in the creation of environmental capabilities, as this potential is disregarded with the current set of practices. Improving triple bottom line dimensions is identified as a win-win process, which argues for the potential of improvement in environmental sustainability would assist in matching the economic and social demands of the oil industry.