With the emerging focus on environmental, social, and governance (ESG) and carbon neutrality, the oil and gas industry is at a crossroads of critical transformation. As investors and consumers express an interest in renewable energy, it’s clear that ESG is essential to any company's long-term corporate and digital strategy. Whether your goal is to comply with regulatory benchmarking or launch an ESG strategy across your entire corporation, leveraging modern software solutions is key to successfully managing hydrocarbon production and achieving your company’s strategic ESG goals.
My colleagues – John-Arne Stokkan, Senior Business Consultant & Product Owner of EC Chemistry at Quorum Software, and Sidney Tennant, Consultant at Quorum Software – and I recently joined Oil & Gas Journal for a webinar discussing energy solutions to accelerate your ESG strategy. During the session, we covered emerging ESG trends in the energy transition, best practices for corporate scenario planning, improving accuracy of emissions measurement and tracking, and understanding reporting and regulatory requirements.
The session kicked off by answering a frequently asked question: Why is the use of data in ESG so important? John-Arne shared, “You really need to have data to know not only how well you’re doing, but also as a starting point for daily monitoring and optimization. You can’t manage what you can’t measure.”
Net zero goals are quite ambitious. To achieve carbon neutrality, we need to reduce emissions. This also comes from the transition to new energy and new technologies that will come over the next few years, such as the transition from LNG to hydrogen utilizing the infrastructure of LNG. In addition to carbon neutrality, we also need to be talking about carbon capture and sequestration.
Taking a deeper dive into ESG planning, we shared three best practices.
- ESG planning and business planning need to be integrated. We hear organizations talking about ESG teams and separate business planning teams that don’t have a connection point until financing comes into play. This is an inefficient use of resources. Make sure that from kickoff, your ESG and business teams are communicating efficiently and frequently.
- Ensure that you employ auditable data management systems. ESG has three letters, however, the “G” is often overlooked. Of course, governance is essential to controlling systems, security, and access, but also regulating the transparency of data. Data cannot be within only one person’s purview; the right systems and regulation can support and provide transparency.
- Implement a methodical approach to developing strategic plans to enable sensitivity and data analysis. The methodical approach to strategic planning focuses on running a plan without any constraints and gradually layering in new points until breakdown. Of course, there will be a point where the plan no longer functions. The learnings from the process will provide direction and guidance to the organization, something that external stakeholders will look for to better understand potential scenarios. For example, will a large carbon tax impact your company’s ability to operate? This is the way to find out.
The full webinar is available on demand to help you accelerate your ESG strategy through energy solutions. Interested in learning more about how we can help you navigate corporate scenario planning?