As the oil and gas sector makes the transition into clean energy, environmental, social and corporate governance (ESG) has become all the more important in the industry. Today, companies are increasingly looking for new ways to promote ESG initiatives, as a growing number of customers and investors are urging organisations to take ESG issues more seriously. While the pressure is rising for oil and gas companies, the increased emphasis on ESG presents several opportunities for the sector. Below, we detail how ESG is re-shaping the energy industry and why it’s time for companies to address environmental concerns and adapt to this new paradigm.
The rise of ESG
Today, it’s become increasingly clear that ESG ratings are an important driver for stakeholders and investors in the energy sector, as well as the general public. ESG investing was once seen as a niche, but it’s become a crucial area for companies in every sector, particularly since the beginning of the COVID-19 pandemic. The transition to a low carbon economy means businesses in the energy sector must ensure they’re aligned with the new energy landscape. ESG is no longer a box-ticking exercise, but fundamental for maintaining and attracting the support of stakeholders. It’s now more important than ever before that ESG is used as a workforce strategy. Energy companies that recognise the value of ESG will be able to attract and recruit the best talent, as well as meeting the challenging demands of the market.
It’s widely understood that there’s an environmental threat in the oil and gas sector. Many companies in the industry have been taking steps to become compliant with ESG and curb the environmental impact. For example, according to reports, the British oil major BP has made plans to buy $220 million worth of solar projects to help push for a low-carbon future. And total investments over the past five years in renewables, hydrogen and digital technologies has been almost $60 billion. Evidently, oil and gas companies are beginning to view environmental conditions as a priority for improving operations and increasing value across their organisations. While most oil and gas companies will likely still invest in traditional production, clean energy is being taken more seriously by leaders in the industry.
Creating an ESG strategy
One of the biggest challenges for energy companies is implementing a successful ESG strategy. When businesses take a strategic approach to ESG that is linked to the goals and values of the company, leaders are more likely to see results. With ESG encompassing social and governance initiatives as well as the environment, it’s imperative that oil and gas companies assess the needs of their organisation and its employees. Building an ESG strategy in an oil and gas company is critical for satisfying a range of different stakeholders. ESG programs are also key for spurring innovation in the energy sector and reducing risks.
With a strong ESG framework, businesses can set action plans and measure performance indicators, which could include energy diversification, carbon footprint reduction and natural resource sustainability. The demand for ESG programs in the energy sector is now greater than ever. For oil and gas companies, embracing ESG shows that they care about employee welfare. Focusing on ESG represents social responsibility and a way for energy companies to gain trust, and future-proof their businesses for the new world of work.
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At Petroplan, we specialise in recruiting top professionals for businesses in the oil and gas sector. We have a highly experienced team of recruitment specialists who have a strong understanding of the market. As a workforce and talent agency, we pride ourselves on continuously building great relationships with our clients and candidates, and further establishing our expertise in the energy sector. We support a diverse range of global projects with a talented pool of candidates and we want to continue to provide our clients with exceptional talent solutions. Contact our team today to find out more about how we can help your recruitment.