In 2009, Benj Sykes wanted to make a career change.
He started out in geology — "I've still got my coloring pencils," he joked to Insider — and worked his way up through the oil-and-gas industry, taking on roles at Shell and Hess Corp.
Sykes was successful, but the ethical implications of his career choice were troubling him.
"I had young kids, and they kept challenging me," Sykes said. "I thought, you know what, I want to do something with a bit more purpose."
He made the leap and became the head of technology innovation at the Carbon Trust, a UK organization that helps governments and businesses decarbonize. Later, in 2012, Sykes joined Ørsted, a Danish energy company. He said it "absolutely was" a personal decision to "move from black to green."
Today, Ørsted is the world's biggest producer of offshore wind. It has wind farms in the US, Germany, and the UK, and it produces 90% of its energy from renewable resources.
Ørsted didn't start as a renewable-energy company, though. Like Sykes, it made a transition from black to green — and in doing so, it demonstrated it's possible for big energy companies to pivot to clean energy.
The energy sector accounts for more than two-thirds of global greenhouse-gas emissions, the International Energy Agency estimates. To limit the influence of climate change, those emissions need to rapidly decrease — which means that big energy companies need to change their operations.
So far, though, the energy sector has been slow to make progress. A 2022 study found that 51% of the world's biggest publicly listed energy companies had not set out a strategy to reduce their emissions. The sector has suggested that a transition to clean energy would be difficult and expensive. BP, for instance, recently scaled back its climate pledges, citing poor return on investments.
But Ørsted, which recorded a net profit of $2 billion last year, shows that the energy sector can change in a way that's both profitable and relatively fast.
Going from oil to renewables
When Ørsted started in 1972, it went by a different name: Dansk Naturgas. The company was established by the Danish government, which wanted to find a solution to Denmark's reliance on imported oil. Dansk Naturgas began extracting oil and natural gas in the North Sea. Production boomed.
Anders Eldrup, our CEO at the time, said, 'You know what? We need to flip things around.'
In the mid-2000s, renewable power started to become part of the conversation. In 2006, Dansk Naturgas merged with five wind-power companies and renamed itself DONG Energy. The merger meant the company had access to in-house wind-energy specialists — which gave it the expertise needed to make the shift to renewable energy.
The 2008 financial crisis added pressure. As gas prices fell, DONG Energy faced a choice: innovate, or wait for the storm to pass.
"Anders Eldrup, our CEO at the time, said, 'You know what? We need to flip things around,'" Sykes told Insider.
In 2009, DONG Energy announced its "85/15" vision: It wanted to convert its portfolio from 85% fossil fuels to 85% renewables by 2040.
Sykes said leadership was key: "It was really driven by Anders, if I'm honest. I think he had the vision, and he brought his leadership in with him."
DONG Energy got to work. It partnered with Siemens to make wind turbines, purchased a smaller company to help install the turbines, and worked with a vessel manufacturer to build installation ships.
The biggest challenge? Reducing the cost of wind energy.
"Scale has been absolutely key," Sykes said. "Our first offshore wind farm in the UK was 90 megawatts, and the one that we've just finished, Hornsea 2, is 1,400 megawatts — a huge expansion of scale."
He added that technological breakthroughs and competition also helped bring down costs.
Sykes said that human resources were also vital.
"We were able to bring people from our oil-and-gas business in," he said, including staff with knowledge of marine engineering, geoengineering, and electrical engineering.
'It's 100% replicable'
In 2017, DONG Energy sold the exploration and extraction side of its oil-and-gas business and renamed itself once again, this time after Danish physicist Hans Chrisitan Ørsted. Sykes said the company chose to sell the fossil-fuel assets because "we needed to make a decisive shift."
According to professor Neil Strachan, an energy economist at University College London, the decision was financial, too. The oil-and-gas assets sold for just over $1 billion.
"They were able to then keep on going and have enough money to invest in capital-intensive wind farms," Strachan told Insider.
The 2017 sale allowed the company to hit its target two decades ahead of schedule. By 2019, 85% of its portfolio was renewable energy.
The foundations of Ørsted's transition were laid long before it came up with official targets. Government policy was a key enabler. In 1990, the effects of fossil fuels were creeping up the agenda of the Danish government. Over the next two decades, it gradually upped its green policies, introducing subsidies to reduce the cost of wind power and setting goals to make Denmark fossil-fuel-free by 2050.
Strachan said Ørsted benefited from the Danish government's positive support but added that didn't mean Ørsted's transition was unique.
"It's 100% replicable," he said. "It's not like there's this one narrow pathway — there's no reason why other firms can't make that transition."
Other companies can follow
In a briefing paper coauthored with Brunilde Verrier, Strachan outlined three broad strategies that big companies took in the face of change.
First, there's the "defensive" strategy: A company makes only incremental changes, like cost cutting or downsizing.
Then there's the "exploratory" strategy, where companies start to experiment with new options and collaborate with newer businesses. In the context of the energy transition, this could include partnering with a hydrogen startup.
Finally, there's the "offensive" strategy, where companies actively drive innovation. For instance, a company might invest in renewable energy.
"These incumbents can be very innovative," Strachan said. "This idea that you just have startups who are the innovative ones and you have these incumbents always defensive is not true."
Verrier told Insider that we needed the expertise of large incumbent industries to advance the energy sector's transition to net zero.
"They can actually shape future energy pathways, depending on the direction that they take," she said.
"If they choose to go towards adaptation and innovation and the transfer of their assets, then they can have an immense weight into accelerating the low-carbon transition," Verrier said. "The assets aren't just investments; it's physical and human skills as well."
If energy companies don't change, they could get left behind, Verrier and Strachan said. Strachan highlighted Kodak as an example. The camera company dominated the market in the '80s and '90s but failed to adopt digital technology fast enough in the early 2000s. In 2012, the company filed for bankruptcy protection. Strachan said the energy sector needs to take heed of companies like Kodak who have left it too late, and added that no company was too big to fail.
Most of the oil-and-gas "supermajors" — think: company names you see at the gas station — have tiptoed into the "exploratory" phase and started to make pledges to reduce their greenhouse-gas emissions.
There are several ways for the supermajors to do this. They can improve their operations — for example, they can reduce methane leaks or electrify their equipment. Some are even pivoting to carbon-capture technology: Exxon Mobil, for instance, is developing 20 carbon-capture and -storage projects around the world.
Alternatively, the supermajors can switch to renewable energy and hydrogen. Shell, for example, says it has about 50 gigawatts of renewable energy in operation, under construction, or in development.
But, Strachan said, while Shell is "one of the largest renewable companies in the world," its investments in renewable energy are "substantially less" than its investments in fossil fuels. In 2021, Shell invested 1.5% of its total $19.7 billion expenditure into wind and solar power.
Activists have mixed opinions
David Tong from the nongovernmental organization Oil Change International told Insider that the major oil-and-gas companies were responsible for the climate crisis and that they needed to be held accountable for it.
"We've looked at their climate pledges and promises and assessed them against what we needed to align with the Paris agreement," Tong said. "We found that all those companies' pledges were either insufficient or grossly insufficient."
He added: "We won't solve the climate crisis with the same tools and the same companies that have caused it. There's no reason to believe that any of these companies are currently serious about the energy transition."
They have the brains, the billions, the global reach, the global market-making opportunities to scale this.
Others think the supermajors can still make meaningful change. Mark van Baal is a shareholder activist. His campaign group, Follow This, is trying to change oil-and-gas companies from the inside. It pressures the supermajors to reduce emissions in line with the Paris agreement through resolutions submitted at annual shareholder meetings.
"I thought, these oil majors, they will hang on to this business model as long as the shareholders allow them to," van Baal told Insider.
While van Baal has had some success, shareholders are hesitant to vote for his proposals.
"It's still an old boys network, I'm afraid," he said.
Van Baal wants the supermajors to reduce their scope 3 emissions — or all the emissions made by customers using the company's products, plus all the emissions made by suppliers making the products that the company uses.
"Scope 3 is over 90% of their impact," he said.
"If we could do the energy transition without them, I wouldn't be doing this," van Baal added. "They have the brains, the billions, the global reach, the global market-making opportunities to scale this."
"We need them, whether we like it or not."
This article is part of "The Great Transition," a series covering the lofty changes across industries that are leading to a more sustainable future. For more climate-action news, visit Insider's One Planet hub.