Effects of climate activism on firm productivity and uncertainty: evidence from global oil extraction

We present global microeconometric evidence on the impact of climate advocacy on hydrocarbon production. We construct two panel data sets by first linking climate activist campaigns to several thousand oil fields, which together account for 72% of global production. Second, we use textual analysis of more than 140 million words from 1,832 annual reports to compute a measure of activism-induced uncertainty for the corporations that control these oil fields. We find robust evidence that climate activism directly reduced not only oil field productivity but also increased company-level uncertainty. By utilising the ownership links between corporations and their oil fields, we also uncover an indirect mechanism in which the initial activism-induced company uncertainty leads to further productivity losses at the field level. Our findings demonstrate the presence of two pathways through which climate advocacy impacts hydrocarbon extraction.