Responsible Investment in Oil & Gas. A case for Environmental, Social, Governance (ESG).

What is Responsible Investing and how should we measure it? These are two of the questions that we hope investors, operators, policy makers and NGOs will challenge and answer during this conference.

Responsible Investment seems to be currently determined primarily by the volume of carbon an organisation releases to the environment.

We believe it should encompass a broader and more balanced set of requirements, as suggested by the Sustainable Development Goals, and measured by Environmental, Social, Governance (ESG) reporting, ensuring that those organisations who truly strive to operate with a clear Purpose in a more sustainable manner are actively supported by investors.

Investors are increasingly scrutinising oil & gas companies through the lens of environmental, social and corporate governance (ESG) factors, as momentum builds behind efforts to promote clean energy, sustainability and the energy transition.

Pressure has increased particularly quickly over the past year. In March 2019, Norway’s Government Pension Fund Global (GPFG) announced that it would sell off around £5.7bn worth of stocks held in oil & gas exploration & production companies that have so far do not invest in renewable energy (Financier Worldwide 2019). This led to a 3 percent fall in the combined market capitalisation of Tullow Oil, Premier Oil, Soco International, Ophir Energy and Nostrum Oil & Gas.

Register for the  ESG conference: http://www.findingpetroleum.com/event/Responsible-Investment-in-Oil-Gas/15e53.aspx

Responsible Investment seems to be currently determined primarily by the volume of carbon an organisation releases to the environment.

We believe it should encompass a broader and more balanced set of requirements, as suggested by the Sustainable Development Goals, and measured by Environmental, Social, Governance (ESG) reporting, ensuring that those organisations who truly strive to operate with a clear Purpose in a more sustainable manner are actively supported by investors.

Norway announced that it would sell off around £5.7bn worth of stocks held in oil & gas exploration & production companies that have so far do not invest in renewable energy.

Financier Worldwide

Some ESG issues of Strategic Importance:

Environmental

  • Compliance with environmental law
  • Carbon emissions, in particular venting and flaring
  • Impact on landscape and wildlife
  • Water management, particularly where hydraulic fracking is involved
  • Waste and by-product management
  • Oil spill prevention and management

Social

  • Operational health and safety
  • Energy supply to the domestic market
  • Local employment, contractors, skills transfers and training
  • Development of local industry, including procurement involving local content
  • Local ownership, including indigenous rights

Governance

  • Ethics, integrity and transparency
  • Regulation and compliance
  • Anti-bribery and anti-corruption compliance
  • Stakeholder engagement and communications (Kerogen Capital 2019).

To further discuss ESG, Finding Petroleum is organising a half-day conference on Responsible Investment in Oil & Gas. The conference is sheduled to take place on Friday, December 6, 2019 at the Geological Society in London.

If you are an investor, oil & gas company or service provider, policy maker, industry body, regulator, NGO, insurer, analyst or interested party seeking to shape the future of Responsible Investment in the natural resources sector, we hope to see you at the conference.

References

  1. Financier worldwide 2019. ESG importance on the rise as oil & gas makes the transitionESG importance on the rise as oil & gas makes the transition
  2. Kerogen Capital 2019. ESG Policy Statement.
  3. World Economic Forum 2019. Seeking Return on ESG. Advancing the Reporting Ecosystem to Unlock Impact for Business and Society.