Identifying Tomorrow’sGlobal Energy Leaders

Energy. It’s a heavily regulated, globe-spanning, life-essential industry that touches every aspect of modern life. Heat, cooling, light, transportation, the manufacturing of products ... imagine these are severely limited or altogether absent, and you quickly get a sense of the significance the energy industry has on daily lives and the dependence on its performance and proper governance.

The conditions that once led legendary oil titan John D. Rockefeller to state, “The growth of a large business is merely a survival of the fittest,”¹ have changed dramatically. In today’s information-rich world, it takes more than just a robust set of financials or the acquisition of one’s rivals to determine those fit enough to lead in a sector.

Thomson Reuters Energy Practice Group (EPG), a team of professionals focused on the needs and challenges of today’s energy corporations, found an answer. Working in partnership with the Thomson Reuters Lab™ – Boston, they developed a methodology to define leadership in today’s complex business environment at the intersection of regulation and commerce. This methodology analyzes and ranks global energy companies across eight performance pillars comprising 28 factors of organizational strength and stability. The result: In 2017, they delivered the inaugural Thomson Reuters Top 100 Global Energy Leaders.

According to Laura Gaze, Director, Enterprise Communications and Thought Leadership, Thomson Reuters, “Our leadership methodology looks at organizations to assess their aptitude for success not only from a financial standpoint, but also in areas such as supplier and supply chain risk, public perception and media sentiment, people and social responsibility, environmental impact, management and investor confidence, and more. Using the deep trove of data assets Thomson Reuters has, the EPG and Boston Lab were able to show the power of the enterprise in providing novel, valuable insights. From there, we categorized the finalists across four subsectors (oil and gas; oil- and gas-related services; multiline utilities; and renewable energy) to determine the final list of the Top 100 Global Energy Leaders.”

“The Thomson Reuters Labs are well-suited to address this because it requires using novel techniques and integrating a great deal of data,” said Brian Ulicny, Senior Director, Thomson Reuters Labs. “Our challenge has been to come up with a way to rank companies within a sector across multiple incommensurable performance dimensions and produce a ranking of the companies that spans all of these dimensions. It was an exciting opportunity to bring together all these data sets relevant to energy companies that Thomson Reuters has access to and use them to come up with a totally objective ranking. We developed cutting-edge probabilistic programming techniques for this purpose.”

Brian and his team developed a highly sophisticated Bayesian-regression model to contend with cases where data may have been missing or incomplete and where correlated data might introduce unintentional biases. As he noted, “A virtue of the model is that the mathematics of it is based on probabilistic distributions of data, so it is designed to handle uncertainties and correlations well.” The team also created four lists of the top 25 subsector leaders in each of the aforementioned industry categories, to provide an even greater picture of the various movers and shakers on the global energy landscape.

The results are impressive and provide much deeper insight into leadership and potential longevity in the energy industry.