The U.S. government, through the Bureau of Land Management (BLM), manages a mineral estate of 700 million acres, with 23 million acres under more than 89,000 leases to various oil and gas developers as of fiscal year 2022, with slightly more than half producing oil and gas. The leases not only generate revenue through royalties, rents, and fees but also signal government endorsement of continued fossil fuel production. As a result, the BLM’s role extends beyond resource management to include corporate incentives and national energy goals ( Bureau of Land Management, 2024 ; Institute for Energy Research, 2023 ).

Drilling for oil and gas on federally owned property contributed over 20 percent of total U.S. climate emissions from 2005 to 2015 ( Acosta-Jimenez, 2025 ). Fossil-fuel production on public land accounted for 21.8 percent, 6.1 percent, and 1.3 percent of total U.S. emissions of carbon dioxide equivalent, methane, and nitrous oxide pollution, respectively ( Acosta-Jimenez, 2025 ; Merrill et al., 2024 ). Methane emissions, in particular, are concerning because of methane’s potency as a greenhouse gas, which is over 80 times stronger than carbon dioxide in the short term. This indicates that even small adjustments to leasing practices—such as stricter venting and flaring regulations could produce significant climate benefits ( Bureau of Land Management, 2024 ).

These data indicate that drilling on U.S. public lands contributes to greenhouse gas emissions. Revising leases may require the federal government to pay compensatory damages based on previous lease payments and infrastructure investments ( Flammer, 2015a ; Merrill et al., 2024 ).

CSR provides a framework for approaching the issue of oil and gas leases. According to the United Nations Industrial Development Organization (UNIDO) ( Eccles et al., 2014 ).

Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental, and social imperatives (“Triple-Bottom-Line-Approach”) ( United Nations Industrial Development Organization, n.d. ). Global reporting standards, such as those from the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), now provide frameworks for evaluating corporate environmental performance. This indicates that CSR is no longer a rare practice but an integral part of corporate legitimacy and competitiveness ( Banerjee, 2007 ; Dahlsrud, 2008 ; Hart & Milstein, 1999 ; Moon, 2007 ).

There are four CSR dimensions:

1) Environmental: Companies reduce harmful practices, reform energy consumption, and offset environmental impacts ( Stobierski, 2025 ; Thacker, 2024 ).

2) Ethical practices: Companies adopt ethical practices ( Matten & Moon, 2008 ; Thacker, 2024 ).

3) Philanthropy: Companies contribute to society via donations or charitable trusts ( Thacker, 2024 ).

4) Economic: Companies manage finances considering the broader economy, e.g., investing in sustainable initiatives ( Thacker, 2024 ).

In the context of federal oil and gas leases, CSR is relevant because the government should do business with companies adhering to CSR principles, and it can incentivize firms to engage in CSR practices.

Policymakers can revise contracts and attach CSR-related conditions to compensation paid to affected companies ( Flammer, 2015a ; Flammer, 2021 ). Revising contracts also encourages companies to consider alternative energy sources ( Flammer, 2015b, 2021 ). Financial compensation should incorporate CSR principles ( Flammer, 2013 ; Flammer et al., 2019 ; Flammer et al., 2021 ).

Flammer (2015a) found that adoption of “close call” CSR proposals positively affects stock performance, labor productivity, and sales growth. Companies like GE, Google, IBM, Intel, Johnson & Johnson, Marks & Spencer, Nestle, Unilever, and Walmart view CSR initiatives as providing competitive advantage ( Flammer, 2015a ; Porter & Kramer, 2006 ). By demonstrating a commitment to environmental and social responsibility, firms often gain stronger investor confidence, attract long-term capital, and reduce risks associated with regulatory penalties. Labor productivity improvements can be seen with higher employee engagement and loyalty, as workers are more motivated when their company aligns with broader social and environmental values. Importantly, these benefits are not limited to large multinational corporations. Evidence suggests that mid-size and smaller firms that integrate CSR practices can also experience improved market positioning, risk mitigation, and stakeholder relations ( Heliani & Riany, 2023 ; Orlitzky et al., 2003 ).

CSR-linked executive pay contracts reduce short-termism and improve firm value and long-term profits ( Flammer et al. 2019 ). Managers prioritize stakeholders to improve performance, so linking compensation to CSR encourages long-term investment and environmental responsibility ( Flammer et al., 2019 ). Over time, these practices can strengthen corporate sustainability and reduce the likelihood of costly environmental incidents or reputational damage. In sectors such as oil and gas, where environmental risks are pronounced, executive alignment with CSR principles is particularly important ( Lyon & Maxwell, 2008 ).

Linking executive compensation to CSR objectives provides a tangible incentive for corporate leaders to integrate environmental, social, and governance (ESG) goals into strategic decision-making ( Cheng et al., 2014 ; Gao et al., 2023 ; Sullivan & Mackenzie, 2017 ). For example, performance metrics can include reductions in greenhouse gas emissions, adherence to sustainable operational practices, or progress toward renewable energy investments. By tying financial rewards directly to these outcomes, firms ensure that executive priorities are consistent with both stakeholder expectations and long-term corporate goals ( Callan & Thomas, 2010 ).

Corporate green bonds finance climate-friendly projects ( Flammer, 2021 ; Goldman Sachs Asset Management, 2023 ). Firms issuing green bonds improve environmental performance, signaling commitment to sustainability ( Flammer, 2021 ; Klassen et al., 1996 ; Krueger, 2015 ). Like CSR-linked executive pay, green bonds aim to transform long-term corporate operations. Green bonds allow companies to raise capital specifically for projects that reduce environmental impact, such as renewable energy installations, energy efficiency upgrades, carbon capture initiatives, or sustainable infrastructure ( Center for American Progress, 2014 ). Investors are increasingly attracted to these because they offer an opportunity to support sustainability while earning competitive returns, creating a positive feedback loop for corporate environmental action ( Lian et al., 2024 ).

The issuance of green bonds can also enhance a company’s public image and investor relations. Green bonds are not limited to large corporations. Smaller firms and emerging-market companies can also access this funding, broadening the impact of sustainable finance. For industries such as oil and gas, where transitioning to low-carbon operations is capital intensive, green bonds provide a practical mechanism to fund new technologies, improve existing infrastructure, and align business models with global climate commitments.