Environmental Commitments in the African Oil Sector: Sustainability or Greenwashing?

Corporate actions fulfilling Zero Routine Flaring commitments contribute to a global reduction in gas flaring, especially in Africa where public environmental governance is weak. Contrary to anecdotal evidence, we find that the primary drivers of committed firms’ flaring reductions in Africa are operational improvements rather than changes in real asset ownership. While flaring increases for forgone awards and divested assets, corporate actions to fulfill commitments have resulted in an annual net reduction of 58 million metric tons in CO2-equivalent emissions in Africa alone. Inconsistent with greenwashing being a major concern, our findings suggest that commitments are fulfilled by corporate policies that create a uniform firm-wide cost of pollution, incentivizing substantial environmental improvement where the regulatory baseline is low.