ESG is the acronym for Environmental, Social, and (Corporate) Governance. The ESG factor is becoming more and more discussed and implemented in all areas of finance, including the energy sector.
Many companies are working to define how they impact ESG criteria. Environmental is broad and it includes carbon and methane emissions, and water and air pollution. Social or social sustainability involves relationships with employees and communities. Governance relates to the officers and board in implementing environmental policies and procedures.
Environmental issues also comprise climate change, deforestation, renewable energy, waste management, and other impacts on natural resources.
Social concerns include: relationships with investors, financial institutions, and company employee policies.
Governance measures the company’s implementation of all of its policies relating to the full scope of ESG.
In the energy industry, companies are reviewing how they can improve their standards and report their findings to the public and other involved parties, such as financial institutions and stockholders. Many law firms and accounting firms are working to define what is needed for a successful ESG program. Many stockholders, lenders, company executives, and other involved parties are becoming more concerned in developing ESG compliances. Many energy companies in the near future will face economic challenges, if some forms of ESG are not incorporated.
In 1992, I founded the International Conference on Energy and the Environment, which became the International Policy Conference, at the University of Oklahoma, Sarkeys Energy Center. The conference was coordinated with Dr. Gus Gertsch, Director of the Center. The theme of the conference was “striving for energy efficiency and environmental preservation.”
The conference has been held in several cities across the United States, for over twenty years, including Tulsa, Oklahoma City, Norman, Stillwater, Dallas, Houston, Denver, and Washington, D.C. The reason I founded the conference, was to begin a dialogue about energy and the environment. It concerned me, after a trip to Russia in the same year, 1992, that I saw first hand the conditions in Russian oil fields, relating to the environment. I believed it was important to begin discussions of how the United States and other countries could work toward the conference’s theme. Today, we are faced with the need for sustainable energy and for environmental preservation. In my book, America Needs America’s Energy: Creating Together the People’s Energy Plan, I emphasised the importance of evaluating our own individual impact on our nation and playing our part in preserving our country.
As The Balance states, in a recent article, “ESG criteria create a framework for helping investors who want to incorporate personal values into their investment approach. The ESG screening process identifies companies that have built sound environmental practices, strong social responsibility tenets, and ethical governance initiatives into their corporate policies and everyday operations.”
Oil and natural gas, along with all forms of energy, will be needed for many years to come. Together, we can achieve sustainable energy and environmental preservation.
America needs America’s energy! All forms. All American. Future generations are depending on us to keep the American dream alive!