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Accelerating Progress: Analysing the Gender Pay Gap in the Energy Industry

Summary: Since the UK started mandatory reporting of Gender Pay Gap (GPG) the energy industry has made progress in closing the gap, with operators leading the charge. However the rate of progress is still too slow with only 10.8% gained by operators and 1.3% by service companies, showing a large discrepancy across the industry. Using the operators current rate of progress in a best case scenario, it will take 13 years to achieve balance. Given the UK has committed to gender equality by 2030 through the UN development goals, the energy industry is falling behind this target and needs to double its rate of progress.

Six years on from the UK government’s introduction of mandatory reporting of gender pay gap data for companies with more than 250 employees, analysis shows that for the UK measuring the data is having an overall positive impact with women now being paid 91p for every £1 a man earns[1], the closest gap since reporting began.  However, the energy industry has not demonstrated the same rate of progress, with women in operators earning 79p for every £1 a man earns and women in the supply chain earning 76p in every £1.

Companies are required to report various data, but the most commonly quoted and what we’ll refer to in this analysis is the gender pay gap for median gross hourly earnings for all employees.  With seven years of data now publicly available, AXIS has undertaken an analysis of how the gender pay gaps within the energy industry have evolved during this period in comparison to the UK national average.

It’s important to note that the gender pay gap is frequently confused with equal pay - the gender pay gap is not a comparison of like-for-like roles, but rather shows the difference between the average or median pay of women and men across organisations. In this way, it is not the same as equal pay, which ensures the right to equal pay for the same jobs between women and men as legislated through the Equal Pay Act 1970.

Our analysis covers a population of 36 energy companies spanning both E&P and supply chain. There are currently no known instances of financial penalties from not reporting and our analysis shows that non-compliance in the sector is low, indicating that most companies prioritise the gathering and reporting of data.

Figure 1: Gender pay gap analysis of the 15 operators used within the study.

The data from Figure 1 shows the average gender pay gap within the population of 15 operator companies[2] analysed has decreased from 31.4% in the first year of reporting to 20.6% per the latest data, a decrease of 10.8%. Fourteen out of the fifteen operators reviewed have decreased their gender pay gaps since reporting began, with only one operator to have seen an overall increase from 15.3% (based on 2017 data) to 22.9% for 2023. Only Equinor has reported an inverse gender pay gap of -7% where women are paid an average of £1.07 for every £1 earned by a man in 2023. One company shown on the far left of the graph above, reported the greatest single improvement during the seven years, decreasingly their pay gap by 26%, from 65% in the first year to a still stubbornly high 39% for 2023 which remains the joint highest gap within this group. Thirteen of the companies within this population are signed up to the AXIS Pledge to deliver positive change on the gender pay gap and the results of this commitment is indeed reflected in the data.

Figure 2: Gender pay gap analysis of the 21 supply chain companies within the study.

The data in Figure 2 shows the supply chain population, which comprises of 21 companies is less promising, showing an overall GPG decrease of only 1.3%. This decrease seen the average of 25.5% in the first reporting year drop to only 24.2% per the latest data. Although this is a modest reduction overall, there are some significant movements by individual companies. It was surprising to see and important to note that only thirteen companies within this group have decreased their gender pay gaps. (From Figure 2, the biggest increase for a single company within the group for 2023 is 21.0%, compared to -6.6% in 2017, an increase of 27.6%. The biggest improvement goes to Peterson Energy Logistics which has decreased by 25.1%, from 16.8% to -8.3%. Again, thirteen of the companies within this population are signed up to the AXIS Pledge, a lower proportion than within the operator group and again the data does imply there’s a correlation between this commitment and the improvements observed.

The pay quartile information helps to demonstrate some of the limitations of the gender pay gap data, for example, one of the operators at the lower end of the range when looking at the median data, seems positive, however the pay quartiles show it to be one of the poorest performers in distribution of women within the upper and upper middle quartiles. There is some correlation however, and we can see Equinor with both the lowest median gap and highest representation of women in upper quartiles, and at the other end of the table one’s with the highest median gap and highest proportion of women in the lower quartile. This essentially tells us the high median gap is driven by the majority of women working in lower paid roles within that specific organisation.

As with all statistics, gender pay gap data also has drawbacks and the potential to mislead. It’s directly related to distribution of women across an organisation in terms of pay quartiles. A company with 5% women overall, but completely evenly distributed - perhaps as low as just one woman in each quartile - will have a gender pay gap of 0%.  This would be misleading in the sense that this company has employed very few women in totality - employing fewer women altogether in the workforce being the antithesis of what this initiative is designed for.

In summary, we are making progress, however, not quickly enough. The UK is committed to the UN Sustainable Development Goals one of which is a commitment to achieving gender equality by 2030. Our industry is not on track to achieve this with current rate of progress so what can organisations do with their data to accelerate progress? They must:

  • Act on their data: Gathering it alone will not drive change.

  • Demonstrate their commitment: Communicate their data effectively and transparently to all levels of the organisation.

  • Build an effective strategy: Ensure gender equity is built into an effective strategy to close the gender pay gap within their organisations.

Support from AXIS is available through becoming a Pledge Signatory. This year we are launching Vision 2030 where industry representatives will share what gender equity looks like for them and what they think we need to do to get there. This is a period of immense change in our industry but it’s also one of great opportunity. Gender pay gap data is imperfect but still a powerful tool in introducing change at a time where gender equity is critical to a successful D&I industry wide strategy. Diverse, high performing teams are key to achieving Net Zero and a long-term sustainable industry. We have valuable data; now we must use it.  

[2] Operators are defined here as companies holding NSTA licences as of March 2024.


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