ESG For Energy
Like many companies in other sectors, oil and gas companies are increasingly confronted with the need to address Environmental, Social, and Governance (“ESG”) imperatives in their businesses. Traditionally viewed as ‘license to operate’ issues—effectively ensuring that companies continued to have ‘social permission’ to operate—these considerations have assumed ever-greater importance as companies face both an accelerating energy transition and increased shareholder activism and government regulation.
ESG programs are also key for spurring innovation in the energy sector and reducing risks. With a strong ESG framework, businesses can set action plans and measure performance indicators, which could include energy diversification, carbon footprint reduction, and natural resource sustainability.
The rise of ESG
Today, it’s become increasingly clear that ESG ratings are an important driver for stakeholders and investors in the energy sector, as well as the general public. ESG investing was once seen as a niche, but it’s become a crucial area for companies in every sector, particularly since the beginning of the COVID-19 pandemic. The transition to a low carbon economy means businesses in the energy sector must ensure they’re aligned with the new energy landscape. ESG is no longer a box-ticking exercise, but fundamental for maintaining and attracting the support of stakeholders. It’s now more important than ever before that ESG is used as a workforce strategy. Energy companies that recognize the value of ESG will be able to attract and recruit the best talent, as well as meet the challenging demands of the market.