Energy and climate
We recognise that society is expecting rapid solutions to the challenges we face, especially our industry’s role in reducing greenhouse gas emissions. Access to affordable, reliable energy is essential to fuel economies and improve living conditions globally. At the same time, providing such access comes with the momentous challenge of reducing the risks of climate change.
Our industry is committed to being part of the solution. One of the most relevant contributions of the oil and gas industry is providing affordable, reliable, sustainable and modern energy. We believe it is our responsibility to deliver solutions to future lower carbon energy systems and to reduce greenhouse gas emissions.
We understand that the energy system is changing.
We understand that the energy system is changing. Launching the fifth edition of the Guidance is evidence of our member companies’ commitment to reporting and transparency about how they manage climate-related and broader sustainability-related opportunities, impacts, and risks.
The principal change in this fifth edition is the addition of a new just transition indicator, together with just transition content in some social and human rights indicators. This reflects our industry’s awareness that our key stakeholders are interested in its support of
a global energy transition that provides affordable, reliable, low-carbon energy to all in a way that respects the rights of people in communities and the industry value chain.
Contributing to sustainable development
The energy transition fits into a broader picture of sustainable development, which addresses all the most urgent economic, social, and environmental challenges of this generation. These are reflected through the 17 Sustainable Development Goals (SDGs), agreed by all countries, for overcoming poverty while protecting the planet and ensuring that all people enjoy peace and prosperity by 2030.
Our industry continues to collaborate with stakeholders – including governments, non-governmental organisations (NGOs), and investors – on many topics included in the SDGs. Our member companies often work through our organisations to update frameworks such as this Guidance to provide practical support for reporting of our industry’s contribution to the SDGs.
Driving transparency and consistency
This fifth edition marks nearly 20 years of collaboration between the member companies across our three associations around the most relevant sustainability issues and indicators to report on. Ipieca, API, and IOGP believe that it is essential to continue providing this robust industry-developed framework to help companies shape the structure and content of their sustainability reporting, particularly for companies that are just starting to report.
Society’s expectations are evolving. Recent years have been characterised by a growing interest in sustainable investment, including a greater focus on the risks and opportunities driven by the global transition to a lower-carbon future. National and international legislation on climate and sustainability topics has increased. Companies need to manage both the transition to a lower-carbon economy and the physical risk of a changing climate. In addition, they are expected to demonstrate that they provide lower-carbon energy in ways that respect local environments, communities, workforces and customers. These triple challenges are increasingly of interest to investors and lenders. Sustainability reports are a key enabler to provide decision-useful information and can help to foster understanding and collaboration with a wide range of stakeholders. Our Guidance supports understanding and collaboration by encouraging reporters to keep their stakeholders informed about their governance, strategies, risk and opportunity management, and performance.
This edition of the Guidance represents consensus from our members on the sustainability issues relevant to our industry and aims to encourage consistency and continuous improvement in reporting. The industry’s commitment to this project is evidenced through the substantial participation in the update, as noted in the acknowledgements on page xi.
External engagement
This fifth edition retains the fourth edition content that also reflected feedback from stakeholders beyond our industry. We received their feedback on the fourth edition through a public consultation process. We engaged an independent external stakeholder panel, comprised of leading environmental, social and financial experts, to advise us on the process and content of the fourth edition of the Guidance. The panel included leaders from banks and investors, reflecting the increasing focus on sustainable finance and the keen interest in reporting from this community. We also looked for balance across subject matter expertise, experience and geography. The stakeholder panel engagement for the 2020 Guidance brought different perspectives to the table and contributed to many of the significant updates in the fourth edition.
When preparing the fifth edition, we decided to seek independent expert advice. We, therefore, made an advanced draft of the just transition additions available to several external stakeholders with a particular expertise in the social and human rights aspects of the energy transition. We are grateful to the Council for Inclusive Capitalism and Business and Pillar Two for their valuable comments on the draft. Their challenges and comments have significantly influenced the just transition content in the Guidance.
Looking ahead
The companies in our industry are well aware of society’s expectations and the many opportunities and challenges that the future holds. Navigating these successfully is in each company’s interest. Demonstrating resilience through robust reporting and communication is key going forward.
Launching the fifth edition of the Guidance is only one milestone of this journey without a finishing line. We anticipate updating certain sections of this Guidance on a frequent basis in order to respond to an evolving business and reporting landscape.
Ipieca, API and IOGP also aim to strengthen the relevance of this Guidance to serve not only as a practical tool for reporting but also to enable and enhance engagement with stakeholders across society as we collaboratively navigate the energy transition.
