PESA President Leslie Beyer highlighted the energy sector’s leadership on environment, social and governance (ESG) issues during a panel discussion hosted by the Senior Energy Executive Discussion Series (SEEDS) and Kinsey Biggs, Senior Counsel, Abernathy MacGregor.
Joining her on the panel were PESA Advisory Board Member David de Roode, Partner & SVP, Lockton Global Energy & Marine; Castlen Kennedy, VP of Corporate Communications and Public Affairs, Apache Corporation; and Jim Tramuto, President, Tramuto Energy Advisors.
Panelists opened by discussing why companies should pay attention to ESG in the current environment. With global disruptions due to COVID-19 and volatility in oil prices some companies are under high financial pressure.
“I think the primary point of ESG is managing risk across the enterprise, but safe and healthy workers are what we need when demand comes back. It’s critical for people to feel comfortable going back to work and for companies to know they’re doing the right things to keep their employees safe,” she said.
As communities emerge from COVID-19 lockdowns, certain issues are top of mind including energy transition and economic recovery. Beyer discussed how this year’s dramatic events will further accelerate the ESG movement, including energy transition.
“It’s critical that we advocate for the energy industry to have the same access to stimulus packages as other industries because of the tie between energy and the global economy,” Beyer said. “Helping us get through short-term demand destruction preserves the industry’s health, so we can achieve those climate goals on the back end”.
When it comes to measuring and reporting ESG accomplishments, Beyer said companies need to focus on data:
Moving to longer-term issues, panelists discussed Larry Fink’s letter issued earlier this year and if financing has fundamentally been reshaped. Tramuto emphasized that ESG needs to become part an organization’s DNA. Beyer pointed out that Fink’s letter had a lot to say about the “S” and “G.”
“Diversity is an important part of Fink’s letter,” Beyer said. “Our industry needs to see more diversity of thought in boardrooms and not focus too narrowly on the environmental piece. We know energy is the only industry that can manage energy transition at scale, and we cannot lose sight of the other components.”
To close, panelists were asked about how regulation might develop in the future and whether the SEC could begin imposing ESG-related regulations. Panelists agreed the energy industry should create its own paths for sustainable development in communities where they operate and make any push for increased regulation unnecessary.