This is the second installment of our six-part Masters of Metamorphosis series, in which we look at corporations that have reinvented themselves in order to seize opportunities in the energy transition. Read Naomi Buck's opening essay: "How some companies are embracing radical change to succeed in the green economy."
In 2008, the Italian oil company ERG faced a crossroads. Having sold its 49% stake in a Sicilian refinery to Russian oil giant Lukoil just before the markets crashed, it had cash to burn. And it had a fundamental choice to make.
The company had always been pragmatic. It was established in 1938 as a small oil, tar and chemicals business; in the postwar reconstruction period, its founder, Edoardo Garrone, pivoted to brick manufacturing. But as the demand for oil grew, Garrone turned to production and refining and, from its base in the port city of Genoa, positioned ERG to fuel the country’s industrial boom of the 1950s and 1960s.
But in the decades to follow, the OPEC (Organization of the Petroleum Exporting Countries) oil crisis and the growing dominance of Saudi Arabia and Asia in refining technologies led the family-owned company to question its sole reliance on hydrocarbons. In 2004, it dipped its toes into renewables, entering a joint venture with a Spanish renewable-energy company before purchasing an Italian wind company that expanded into the French market.
In 2008, when ERG was weighing its options, pragmatism again prevailed. Garrone’s grandsons, who serve on the board, agreed with fellow shareholders and CEO Luca Bettonte that the company should concentrate on the fastest-growing segment in the energy sector: renewables. “I can’t say we made the decision because we wanted to save the world,” Bettonte told Corporate Knights in a 2021 interview. “But the idea to go green played a part in it.”
What happened in the years to follow was transformative. By 2013, ERG had become Italy’s leading producer of wind energy. It now has installed capacity in the United Kingdom, Germany, France, Poland, Romania, Bulgaria and Sweden, making it one of the continent’s top 10 wind companies. It also owns major solar installations in Italy, Spain, France and the United States.
In October 2023, ERG divested of its last remaining hydrocarbon asset, with the sale of a combined-cycle gas turbine power plant in Sicily. It now calls itself a pure wind and solar energy company.
The winds will not always blow in its favour; ERG’s aggressive push into the United States, which began in 2024, will not proceed as smoothly as hoped under the administration of Donald Trump. And it remains vulnerable to shifting regulatory frameworks and unstable electricity prices – not to mention the weather. Nonetheless, its renewable capacity – and earnings – continues to grow.
ERG’s wholesale transition from black to green took little over a decade, and with it the company redefined itself: no longer responding to Italy’s demand for oil, it sees itself – in its own words – “inspiring change to power the future.”
Naomi Buck is a Toronto-based writer.
The Weekly Roundup
Get all our stories in one place, every Wednesday at noon EST.
