The Petroleum Alliance Annual Meeting Takeaway: The Importance of ESG In The Oil And Gas Industry
In August, members of the INSURICA Energy Practice team attended the Petroleum Alliance of Oklahoma's annual convention in Las Colinas, Texas.
The Petroleum Alliance Annual Meeting is one of the country's largest oil and gas gatherings. The three-day event offered opportunities to hear from thought leaders in the oil and gas industry, as well as networking and exhibitor opportunities from some of the industry's most prestigious companies.
One of the conference's key takeaways was the various environmental, social, and governance (ESG) issues affecting industries all over the country, including oil and gas. Let's examine this concept more closely. According to Investopedia, ESG criteria are a set of standards for a company's operations that socially conscious investors use to screen potential investments.
ESG pressure has been around for a long time. Oil and gas companies are investing in research and development and new technology to find ways to reduce their carbon footprint and produce the cleanest oil and natural gas possible; additionally, several social movements in recent years (e.g., #metoo, #BLM) have caused companies to reconsider their risk profile. Rate increases in Director's & Officer's Liability and Employment Practices Liability are a direct result of these movements, and business owners and stakeholders must continue to address these risks.
A comprehensive ESG program could include but is not limited to:
- Environmental stewardship: including carbon capture and carbon emissions reduction, energy portfolio diversification, operational energy efficiency, resource conservation, and waste disposal
- Social responsibility: including worker safety and health, community involvement, and supply chain relationships
- Corporate governance: including reporting transparency, leadership diversity, executive compensation, and shareholder rights
"I'm blessed to have the opportunity to work with and learn from some of the best Oklahoma oil and gas companies and professionals in the country," said Garrett Campbell, Commercial Risk Advisor for INSURICA. "These companies are the backbone of Oklahoma and I'm confident and encouraged by their commitment to produce oil and gas in the safest, cleanest, and most efficient way possible."
Final ESG Considerations
The best way to begin an ESG oil and gas strategy is to assess your company's current practices, begin documenting them, identify areas for improvement, and implement a strategy to meet these goals.
INSURICA is here to help you navigate your ESG strategy with your team and investors. Please contact us today for additional coverage advice or solutions.
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