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The role of the Oil and Gas Industries with regard to Sustainability

Sustainability is not a recent topic, but nowadays there has never been so much talk about the ESG (Environmental, Social and Governance) aspects, a term that represents the assessment of a company in relation to environmental, social and governance factors. In fact, since the 70s, it was already known about the degradation of natural resources. Gathered during the Stockholm Conference in 1972, heads of state from around the world highlighted the imbalance between consumption and the planet's carrying capacity. Since then, the idea has been consolidated that the current economic development model based on the excessive use of natural resources, although it may satisfy society in the present, is a collision course in the future, as it compromises the ability of subsequent generations to supply their own needs.

Over the past 30 years, discussions led by the United Nations have resulted in advances in strategies for sustainable development, such as the creation of the United Nations Global Compact and the sustainable development goals (SDGs), represented by 17 priority themes related to environmental, social and economic aspects. The UN considers that companies are vital partners in achieving sustainability and must work to align their strategic planning with the SDGs.

In this context, companies that do not adhere to sustainable practices are doomed to failure in the medium and long term. Pressures exist both from consumers, who are increasingly paying attention to brands with sustainable labels, and from investors who focus their investments on ESG funds. This type of investment is known for prioritizing environmental, social and governance values, making it possible to invest money in companies that maintain sustainability as the focus of their actions.

One of the ways companies demonstrate their adherence to sustainability is through the preparation of a sustainability report. Currently, most companies around the world disclose their performance and the positive and negative impacts of their activities on the planet. More than just a piece of communication, the report is a valuable tool for decision making, driving change and organizational development, achieving better performance, engaging stakeholders and attracting investment.

In order to be effective, these reports must follow internationally recognized standards for this purpose, such as those offered by the GRI (Global Reporting Initiative) whose specifications are used by more than 90 countries, by companies of all sizes and sectors. Estimates indicate that among the 250 largest companies in the world, 93% report their sustainable performance and, of these, 82% do so within the standards established by the GRI.

According to GRI, the report must meet 10 fundamental principles: inclusion of stakeholders, sustainability context, materiality, completeness, balance, comparability, accuracy, punctuality, clarity and reliability.

Responsible for 35% of carbon dioxide emissions, oil companies have been pressured to find solutions to minimize GHG (greenhouse gas) emissions, increase carbon capture and storage, and invest in innovation for new sources of energy. In its last sustainability report, Petrobras stated that it is following the trend of reducing GHG emissions, having achieved a decrease of 5% compared to 2019 (equivalent to 56 million tCO2) which is compatible with its reduction target in 25% by 2030 compared to 2015. The report highlights climate resilience and transition to a low-carbon economy as one of the priority material topics and describes how the company is doing to decarbonize its processes, especially those that reduce natural gas flaring in flare, CO2 reinjection and energy efficiency gains.

With the ambition to become a leader in the energy transition in the future, Equinor has been investing in strengthening climate goals to be a net-zero company by 2050, that is, it intends to eliminate indirect emissions generated by the entire value chain, including suppliers and customers. The 2020 sustainability report shows how Equinor is prepared for this, whether it's deploying offshore wind farms, developing solar energy projects and conducting research in innovation and technology for decarbonisation. In the same year, in partnership with governments, industry and investors, it made progress in projects for the sequestration and storage of carbon and green hydrogen. It is speculated that these technologies will be crucial to meeting the targets set in the 2016 Paris agreement on climate change to reduce global emissions.

With the revitalization of mature fields and the extension of their useful life as a pillar of its business, Trident Energy intends to do this by adding value to its stakeholders and contributing to sustainability. In its first report carried out in 2020, the company shows how it is organizing itself to identify and mitigate its GHG emissions and thus control the effects of climate change. The report reports an increase in CO2 intensity in 2020 compared to last year, due to the acquisition of Campos Pampo and Enchova located in the Campos Basin. At the same time, the company plans to reduce routine flaring during its operations over the next 5 years.

The analysis of the content of sustainability reports points to a fact, which is a change in the strategic vision of the companies and their top leadership in the direction of energy transition and sustainable development. It remains to be seen whether investments in technology and innovation will result in practical results and the achievement of established goals.

How can AFCP help your company succeed in ESG?

Prior to drilling, completion, intervention and abandonment, all possible risk mitigations must be in place to prevent damage to the environment:

§ Environmental Management, Compliance and Diligence;

§ Pre-A&D audits and project risk analysis;

§ Regulatory compliance audits;

§ Environmental impact report and assessment;

§ Development of environmental management systems;

§ Sustainability Reports.

It is important to measure and report in accordance with internationally recognized standards such as the GRI Sustainability Reporting Standards.

This ensures data quality and comparability and contributes to better decision making by allowing access to information that promotes better decisions.

For more information about our ESG initiatives please contact us:

O papel das Indústrias de Óleo e Gás no que se refere à Sustentabilidade
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