American Oil and Gas Reporter - May 2020 - 80

opportunities and trade-offs," the groups
say. "One of the ways in which companies
respond to these requests is through corporate reporting, specifically sustainability
reporting-also known as corporate citizenship, nonfinancial, or environmental,
social and governance (ESG) reporting."
Meeting the world's future energy
needs by transitioning to low-emission
energy sources is key to delivering sustainable development, the report notes,
adding that as a major participant in the
global economy, it is vital that the oil and
gas industry clearly communicates how
it is supporting the energy transition.
Updates to the fourth edition were
made to improve reporting of performance
indicators related to climate change and
energy, the groups say, "as these areas
are of real interest to an investment community increasingly committed to financing innovative, lower-carbon energy paths."
Among the changes included in the
revised guidance are:
· Introducing a new modular structure
that enables faster updates to reflect industry progress on specific topics or important external developments;
· Creating "key points to address"
that give practical recommendations on
developing a report's narrative, for ex-

ample, addressing new reporting frameworks such as the United Nations' Sustainable Development Goals;
· Covering 21 sustainability issue areas supported by 43 performance indicators-compared with 12 issues and 34 indicators in the 2015 Sustainability Reporting Guidance; and
· Relying on new indicators for governance and strategy, risks and opportunities, lower-carbon technology and
methane.
"One of the most relevant contributions
of the oil and gas industry is providing
affordable, reliable, sustainable and modern energy," the groups say. "We believe
it is our responsibility to deliver solutions
to future lower carbon energy systems
and to reduce greenhouse gas emissions."
Importance For Investors
While reporting on sustainability strategy and performance is of interest to
many stakeholders, the report says its
importance continues to increase significantly for the investor community. There
is a clear focus on a more robust assessment of ESG reporting, it observes, with
climate change in particular becoming a
major topic for investors who themselves
are receiving demands from clients and

other stakeholders-including regulators-
to demonstrate both the climate-related
impact and the climate resiliency of their
portfolios.
"ESG rating agencies' products are
an important source for investment decision making and for companies' ability
to attract ESG-focused funds," Sustainability Reporting Guidance notes. "When
developing their ratings, agencies base
their scores on companies' public disclosure (including sustainability reports)
and controversies, underscoring the need
for best-in-class ESG disclosure."
Parties in the supply chain-suppliers
as well as customers-also are refining
their expectations of companies' transparency, the report points out. Tenders
by buyers are integrating ESG prequalification items, and high-quality reporting
can make a difference in gaining valuable
contracts and working with companies
with similar values. Equally, the report
recommends companies can mitigate supply chain risks of poor social and environmental practices by encouraging transparency throughout their procurement
processes.
"The U.S. natural gas and oil industry
is committed to environmental stewardship,
safety and strong stakeholder relation-

www.aogr.com

ebsite exclusives:

Current W



Global Oil Demand Could Start
Seeing Bounce Back by Year's End
From Morningstar report

What's popular at aogr.com:
Frac Facts:

The latest in delivery systems
& proppants.

Oil & Gas Prices:



Cash and 3-month futures,
updated every 11 minutes.

Exports Exceed Imports in 2019
For First Time in Seven Decades
From U.S. Energy Information
Administration reports
North America

International

1-800-847-8301 001-316-788-6271
80 THE AMERICAN OIL & GAS REPORTER
http://www.aogr.com http://www.aogr.com
American Oil and Gas Reporter - May 2020

Table of Contents for the Digital Edition of American Oil and Gas Reporter - May 2020
