As part of its commitment to bring members the resources needed to navigate today’s unprecedented challenges, PESA and Global Affairs Associates hosted a panel discussion about COVID-19’s effects on ESG efforts.
The panel explored short- and long-term implications of the coronavirus crisis on reporting and managing future risks. The discussion was moderated by ESG Committee Co-Chair Jock Pool, Oceaneering International; Jonathan Cox, Global Co-Head of Energy Investment Banking, J.P. Morgan; Buddy Clark, Partner and Co-Chair Energy Practice Group, Haynes and Boone; and Anton Rushakov, Senior Consultant, Global Affairs Associates.
ENVIRONMENT – EVALUATING SHORT- AND LONG-TERM RISKS
For context, the panel began with a discussion of the unprecedented disruption to demand caused by the coronavirus. Environmental reporting requirements have been relaxed due work-at-home orders and other personnel restrictions. However, these new policies have not increased emissions. Emissions have declined globally due to lockdown orders.
As the current crisis brings financial pressure through the energy industry, environment-focused initiatives will be less at the forefront as companies focus on social and governance. As would happen if there was a fire, companies, investors and governments are extinguishing the immediate danger rather than improvements that can be completed later. However, environmental goals will dominate strategies once the crisis subsides.
Oil majors are pressing forward on commitments to a lower carbon future and will need suppliers in the OFS sector to help achieve those goals. Furthermore, as the world emerges from the current crisis, panelists anticipate a revaluation of weather-related risks, which will include the energy industry.
SOCIAL & GOVERNANCE PRESENT OPPORTUNITIES
The current crisis is bringing the social and governance elements of ESG to the forefront, panelists agreed. Companies are learning about their resiliency plans and evaluating their effectiveness. This is an opportunity for companies throughout the economy and the OFS sector to demonstrate leadership in the social and governance areas.
As noted in the UH Energy workforce survey, safety remains a top priority throughout the energy industry. Companies should highlight their dedication to safety and lead from a cost perspective, panelists said. Efforts to maintain employees and support local communities have mutual long-term benefits.
In the longer term, companies have a strong incentive to broaden their business models. Energy is intrinsically tied to global prosperity and OFS companies are positioned to develop technologies providing energy in safer, cleaner and more efficient ways. The panel noted that this framing brings together all the elements of ESG as the sector looks for ways to evolve in an ever-changing landscape – which includes pandemics.
PESA’S CENTER OF EXCELLENCE
By hosting workshops and webinars PESA’s ESG committee is at the forefront of sharing the resources and information needed for members to navigate ESG. To build on the expanding repository of ESG resources, PESA launched its ESG Center of Excellence, a web-based library of ESG information, constructed to augment PESA’s range of ESG knowledge-building and best practice sharing events for members.
If you would like to join PESA’s ESG Committee, contact Director Government Affairs Maria Suarez.
