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Sustainability in Oil & Gas Production; Exploration: Voluntary Sustainability Reporting

As oil and gas production and exploration continues to be a priority, oil and gas companies and agencies are implementing regulations to help enhance the sustainability of the industry. While oil and gas production and exploration is not necessarily by nature the most sustainable practice in the world, the practices that the industry employs can increase in sustainability with regulations coupled with transparent tracking and reporting.

One of the methods in which oil and gas companies use to track their sustainability progress involves voluntary sustainability reporting, which is an organizational report that provides information on economic, environmental, social, and governance performance. An increasing number of organizations wish to improve the sustainability of their operations and activities, establishing a process to measure performance, set goals, and manage change – and a sustainability report is the key platform for communicating positive and negative performance, as well as capturing information that can influence policy and operations.

Reporting initiatives include the Global Compact, the Global Reporting Initiative, and the Dow Jones Sustainability Index, some which follow guidelines developed by the Extractive Industries Transparency Initiative (EITI) and the Voluntary Principles on Security and Human Rights. The EITI is a global coalition of governments, companies and civil society working together to improve openness and accountable management of revenues from natural resources.

Let’s take a look at two primary reporting structures, the Global Compact and the Global Reporting Initiative:

Global Compact

The Global Compact offers ten principles in the area of human rights, labour, the environment, and anti-corruption, asking companies to embrace, support, and enact a set of core values in these areas. The principles related to the oil and gas industry primarily lie in the environmental category, and include:

  • Principle 7: businesses should support a precautionary approach to environmental challenges
  • Principle 8: undertake initiatives to promote greater environmental responsibility
  • Principle 9: encourage the development and diffusion of environmentally friendly technologies

Global Reporting Initiative

The Global Reporting Initiative (GRI) is a leading organization in the sustainability field. GRI promotes the use of sustainability reporting as a way for organizations to become more sustainable and contribute to sustainable development.  GRI produces a comprehensive sustainability reporting framework that’s widely used around the world to enable greater organizational transparency. The framework sets out principles and indicators that organizations can use to measure and report economic, environmental, and social performance.

Within the GRI’s reporting structure is reporting guidance in the form of the Oil and Gas Sector Supplement, which is primarily involved in the exploration, extraction, production, refining, and transport and sale of oil, gas, petrochemicals, and specialized oil service companies. The supplement includes the following main contextual issues:

  • Responding to growing energy demands
  • The control, use, and management of land
  • The contribution to national economic and social development
  • Community and stakeholder engagement
  • Environmental management
  • Developing lower-carbon energy sources
  • Relationships with governments
  • Climate protection and transformation of the energy market
  • Environmental protection, including the use and disposal of water and chemicals
  • Transparency of payments to governments and public policy lobbying
  • Respect of human rights
  • Security
  • Health and safety
  • Asset integrity and process safety

While the oil and gas industry does have considerable sustainability impacts, it also offers huge opportunities. By following a framework for reporters to manage impact and opportunities and be accountable by disclosing them to interested stakeholders, sustainability in the industry is trending as an area to watch and grow.

TNphoto Tatsuya Nakagawa
Tatsuya Nakagawa is the VP of Marketing and co-founder of Castagra Products, a storage tank and wastewater coatings manufacturing company that is highly acclaimed for its cold weather tank coating applications and its durable frac tank coatings. Castagra is used by the world’s top oil and gas field services companies.