ESG is increasingly vying for airtime in oil and gas boardrooms as leaders grapple with how best tackle environmental, social and governance challenges. This follows a trend of ESG support throughout all sectors of the U.S. economy. A recent study revealed that ESG shareholder resolutions were up 22% to record levels for 2022. This article identifies (1) the key administrative reasons for the increased ESG discussion, (2) why leadership should take ESG seriously, (3) questions leaders should be asking themselves, and (4) a framework for addressing ESG challenges.
In 2021, the Biden Administration issued several executive orders directing federal agencies to implement ESG-related practices. Perhaps most important among these is President Biden’s January 27, 2021 Executive Order, “Tackling the Climate Crisis at Home and Abroad. The Executive Order:
The EPA is also developing ESG-related rules that impact, or will impact, the oil and gas industry. These rules seek to:
While some oil and gas companies have been slow to react, most leaders now recognize the importance of addressing ESG. While there are many reasons to take ESG seriously, here are some of the most compelling:
Leadership at oil and gas companies should be asking themselves following questions, which they must answer to stay competitive:
Oil and gas leaders should consider the following: