Gas producers are increasingly aware of and emphasizing ESG in their businesses as investors and the public become more concerned about sustainability.
ESG stands for environmental, social and governance criteria, and more and more companies in the gas sector have a corporate plan and provide reports on their websites of how they are meeting their goals in this area.
Investopia defines ESG criteria as “a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.”
ESG includes factors like worker safety, supply-chain diversity, and community and environmental impacts.
Range Resources, the largest gas producer in the Appalachian Basin, recently released its 2020 Corporate Sustainability Report, which calls for the company to achieve net-zero greenhouse gas emissions by 2025. “Given our vast energy resources, low breakeven costs and best-in-class environmental efforts, Range will continue to play a key role in safely supplying cleaner, abundant energy while providing value for all stakeholders through a sustainable approach to our work,” CEO Jeff Ventura said in a statement.
At the Marcellus Shale Coalition’s recent Shale Insight conference, high-ranking executives of two area gas industry companies spoke about the importance of ESG in their business models and how they are achieving their goals.
ESG is “vital to the future success of our industry,” said MSC President David Spigelmyer.
Chris Doyle, who recently became lead director of Canonsburg-based Olympus Energy after stepping down as president of CEO to take another job, said that “investors are focusing in this area” and the ESG performance is “important in creating a sustainable, profitable business.”
He said that ESG is essentially the company’s “social license to operate” and is being emphasized by many companies. “We talk about it religiously at all levels,” Doyle said. He noted that the company emphasizes the use of technology to reduce its environmental impacts and reduce disruption to the community.
Greg Floerke, chief operating officer of MPLX, a midstream company affiliated with Marathon Petroleum, explained that investors prefer companies that operate in a safe and respectful manner.
“We want the communities we work with to be better off with us than they were without us,” he said, noting that the company has a policy allowing any employee to order a stop to a job if they feel that it could lead to a potential safety issue.
Doyle urged other gas company executives to “be passionate about this” and to go beyond what is required by regulation to meet the goal of being a socially and environmentally responsible organization for the good of the community as well as the company’s bottom line.