Oil and Gas 360


The EnerCom Dallas Energy Conference featured an outstanding panel on ESG (Environmental, Social and Governance) featuring Matthew Todd, Director of The Environmental Partnership; Chris Hughen, Associate Professor of Finance at the University of Denver; and Ken Wonstolen, Senior Vice President and General Counsel with HighPoint Resources (HPR).  The panelists provided valuable insight regarding proactive ESG solutions and experiences.

 

EnerCom Dallas - ESG for the Oil and Gas Industry -oilandgas360A replay of the ESG panel can be viewed here – https://www.enercomdallas.com/company-pages/esg-panel/

Chris Hughen, who regularly teaches graduate courses in security analysis and international finance, stressed the importance of evaluating corporate Governance metrics – the often-overlooked aspect of ESG – as being a critical area for corporate sustainability and value.  He stressed that better corporate governance leads to good Environmental and Social performance.

Matthew Todd outlined the proactive efforts of many of the country’s major oil and natural gas producers to participate in The Environmental Partnership, an industry-led initiative of the American Petroleum Institute (API) committed to improvements in environmental performance, including reducing methane emissions.  The Partnership includes companies of all sizes that are taking action, adopting best practices and technologies, and fostering collaboration in order to responsibly develop essential natural gas and oil resources.

Ken Wonstolen with HighPoint Resources punctuated the panel with insightful first-hand experiences from HighPoint’s journey along the evolutionary trail of ESG in the capital markets.

Ken elaborated on the Denver-based exploration and production company’s focus on the responsible and safe development of oil and natural gas in the Denver-Julesburg (“DJ”) Basin of Colorado, stressing HighPoint’s disciplined approach to capital investment and low-cost development, while taking great pride in working with the communities they operate in to ensure the health, safety and well being of their neighbors and employees.

Based on the ESG presentations and conversations at the conference – including the dynamic, must-see keynote presentation by Liberty Oilfield Services Chief Executive Officer, Chris Wright (https://www.enercomdallas.com/company-pages/liberty-oilfield-services/) – it is clear that the oil and gas industry must create a more proactive strategy regarding evaluating and communicating ESG risks and opportunities to the capital markets.  A failure to be more assertive could allow the growing ESG movement to transform into a Boycott, Divest and Sanction (BDS) effort against the industry.

This requires a strategy that includes a louder and more harmonious industry choir of voices unapologetically addressing the reality that the current and future development, production and use of hydrocarbons is necessary to meet the food, shelter, and welfare needs of a safe, healthy, growing, modern world.

The global oil and gas industry can do more to make energy production cleaner; resource utilization more sustainable; and minimize the impacts while maximizing the social benefit of the production and use of hydrocarbons.

Toward this effort, ESG strategies to consider for 2020 should focus on addressing issues like flaring; water use and disposal; methane and VOC emissions; carbon capture; clean fuel advancement; and management accountability, compensation and diversity.

In addition to a strategy to address these issues, companies need to have a comprehensive ESG communications plan to report their ESG initiatives and progress that is material; defensible; intentional; consistent; and broadly messaged through traditional and digital channels.  A good communication plan will also help you create a standardize reporting structure that can help minimize the need to fill out the variety of ESG forms.

 

About the Editor – Dan Genovese is a Director at the energy consulting firm EnerCom, Inc. with experience in corporate strategy, investor relations, ESG, government relations and policy.  Mr. Genovese has worked in capital markets and has experience in upstream production and downstream energy demand.  Contact: [email protected]

EnerCom, Inc. is an internationally recognized management consulting firm advising companies on Environmental, Social & Governance (ESG), investor relations, corporate strategy/board advisory, marketing, analysis and valuation, media, branding, and visual communications design. Founded in 1994, EnerCom, Inc.is a global leader in the energy industry and energy capital markets. For more information, contact: [email protected].


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