ESG Strategy Development and Reporting in the Oil & Gas Industry
Enhancing Competitive Advantage and Reducing Liability Through Best Practice Reporting Grounded in Materiality, Data and Transparency
August 17, 2021DownloadsDownload Article
Oil and gas companies have good reason to pay attention to the importance of carefully implementing ESG programs and their associated goals, claims and disclosures. While it is now generally expected that most companies pursue such initiatives, the ESG ecosystem in the United States currently lacks universal non-voluntary standards to guide consistent disclosures of potentially material information. Therefore, ESG strategy development and implementation, and the related communications can be a risky double-edged sword.
Companies are expected to communicate their initiatives, goals, and potentially material risks and opportunities – but doing so without formal guardrails often exposes them to multi-stakeholder criticisms for (a) not meeting stakeholder demands for more robust transparency on ESG issues, or (b) providing information purported to be decision-useful, but with closer scrutiny from stakeholders arguably lacks the substance to support ESG representations. Expectations and scrutiny are undoubtedly only going to grow as additional spotlights get placed on ESG issues, such as the United Nations’ Intergovernmental Panel on Climate Change (IPCC) report that was issued on August 9th. Despite the UN Chief characterizing the global current state as a “code red for humanity,” reasonable hopes do exist that deep emissions cuts in greenhouse gases could stabilize rising temperatures and avoid a catastrophe.1