Carbon Sector Insurance is Being Nudged Overseas

A new sustainability reporting standard for oil and gas has been launched, which will enable complete disclosure on the complexity of transparency demands facing the sector – best positioning companies to demonstrate accountability for their impacts and how they are transitioning to a low-carbon future. Insurers who cover coal or oil industry sectors are acutely aware how green activists and activist/politicians continue to target their business interests located in developed, `Western’ economies. 

For insurers and brokers there is a tricky balancing act between offering cover on vital infrastructure that actually keeps the economy going and the lights switched on, and the increasing demands for a Net Zero utopia. Maybe subsidiary companies located in China or the Middle East is the best solution?

The GRI Sector Standard for Oil and Gas  focuses on the sectors most pressing challenges on sustainable development. At the heart of this is how the decisions and actions of companies address widespread stakeholder concerns about their climate change related impacts, while ensuring a just transition for workers, communities and the environment.

GRI’s first Sector Standard applies to any organization involved in oil and gas exploration, development, extraction, storage, transportation or refinement. Key features include that it:

  • Guides reporting across 22 most likely material topics, including climate adaptation, resilience and transition, site closure and rehabilitation, biodiversity, the rights of indigenous peoples, anti-corruption, water and waste.
  • Ensures comprehensive disclosure on greenhouse gas emissions – both direct (Scope 1 and 2) and indirect emissions caused by the end-use of their products (Scope 3).
  • Reflects authoritative expectations for responsible business, including the Extractive Industries Transparency Initiative (EITI) and Task Force on Climate-Related Financial Disclosures (TCFD).
  • Has multi-stakeholder and global legitimacy, with development led by an expert group representative of business, investors, civil society, mediating and labor institutions.

Mia D’Adhemar, Senior Manager, GRI Sector Program, said:

“The urgent need to quicken the transition to a low-carbon economy, and mitigate the effects of climate change, is clear for all to see. By committing to transparency through the GRI Sector Standard, oil and gas organizations can demonstrate that they want to be a part of the solution, highlighting the business case for change.

Providing a comprehensive reporting standard for any oil and gas companies to fully disclose their impacts on the economy, the environment and people, the Sector Standard gets to the heart of the issues that matter most. It will deliver the transparency that stakeholders are demanding, in order to assess sustainability impacts and performance  across the sector.”

Brian Sullivan, Executive Director of IPIECA (International Petroleum Industry Environmental Conservation Association), said:

“GRI has long been helping companies to advance their sustainability reporting and communicate their impacts on key issues, and IPIECA has enjoyed a constructive relationship over many years. Our members are committed to sustainability reporting, with many using the GRI Standards to guide the development of their reports. IPIECA welcomes GRI efforts to support the oil and gas industry to effectively communicate with stakeholders, as well as to harmonise disclosure expectations with other frameworks.”

Charlotte Hugman, Leading Research, Decarbonisation and Energy Transformation, World Benchmarking Alliance (WBA), said:

“The World Benchmarking Alliance welcomes our ally, GRI’s new Oil and Gas Sector Standard, as a major step forward in increasing transparency and disclosure by companies in the sector. More information on how companies will achieve a just and an equitable low carbon transition will enable the WBA Climate and Energy Benchmark to measure progress and hold companies to account.”

Alexandra Russell, Chief Risk Officer for Sasol, the global integrated energy company – and a member of the working group that developed the new Standard – added:

“For Sasol, having just launched its new emission reduction targets, the Sector Standard for Oil and Gas is an important tool through which Sasol is able to position its insights as it transitions, with focused stakeholder engagement where it truly matters. As we progress along the journey, the GRI Standard also allows us and other industry players to re-evaluate data in the context of the identified drivers of change.”

Sector Standards complete GRI’s integrated and modular system of reporting. Organizations begin with the Universal Standards – for which a major update published on 5 October – then their applicable Sector Standards alongside relevant Topic Standards. With 40 sectors identified, further standards for coal, mining, agriculture, aquaculture and fishing are already under development.

A free GRI webinar – Introducing the new Oil and Gas Sector Standard – takes place on 20 October, for which places can now be reserved.

About alastair walker 7050 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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