Future growth hinges on the appropriate response to present conditions while strategically developing longer-term plans. For most industries, social, environmental, and political issues are having increasingly greater impact in reshaping the present and future business environment. In particular, the oil and gas (O&G) industry is challenged to reliably and economically deliver transportation fuels in the present day while working strategically to provide “cleaner” energy products in the future.

Globally, governments are passing legislation to address climate strategy. New laws promote sustainable operations and lowering carbon emissions from mobile and stationary sources. Low-carbon fuels and renewable energy are also strong options to achieve sustainability goals. Looking ahead, the global economy is progressively moving toward clean, green, and affordable energy. Accordingly, O&G companies must find a balance in providing energy and the shift toward sustainable operations. The move will require time, vision, and investment in R&D to foster innovation.

Rating sustainable performance.

At present, O&G companies are at various stages to comply with evolving social and environmental commitments. Sustainability is a very broad metric that includes performance in safety, environment, and social issues. The Dow Jones Sustainability Index (DJSI) is one rating system defining sustainable performance for a broad range of industries. The DJSI uses the Corporate Sustainability Assessment (CSA) conducted by RobecoSAM, a specialist group focused on sustainability investing. RobecoSAM has over 17 years of experience and data on sustainability performance for numerous businesses, including the O&G industry.

In 2016, RobecoSAM invited 3,400 companies to participate in the CSA. The DJSI selected 315 companies as top sustainable enterprises; notably, 20 O&G companies are 2016 DJSI winners. For the O&G industry, key sustainability assessment areas are:

·         Climate strategy-Low-carbon fuels and renewables

·         Operational eco-efficiency—Energy management and conservation

·         Occupational health and safety—Training and accident prevention programs

·         Social impact on communities—Hiring local workers and vendors and accident/emissions reduction.

Corporate strategies of the new energy companies

There are many different pathways to become a sustainable company, and the O&G industry is making great progress in this area. Innovation is a key part of the journey to becoming a sustainable organization as demonstrated by several 2016 DJSI winners:

Total SA (Total)-Silver Level DJSI 2016

·         Ranked No. 4 in the global O&G industry and a leader in the bioenergy fuels market

·         Plans to have low-carbon business comprise 20% of its energy portfolio by 2035

·         Solar and wind projects are a major part of Total’s low-carbon sources

·         A world leader in photovoltaic solar energy technology and is involved in major solar energy projects such as Shams, the world’s largest solar project in the United Arab Emirates

·         Converting its La Méde refinery to a biorefinery that will be powered by 8-MW solar farm as part of climate strategy and eco-efficiency improvements.

Solar project developed by Total in the Middle East. Source: Total

Royal Dutch Shell Plc (Shell)-Bronze Level DJSI 2016

·         Ranked No. 2 O&G company by Forbes

·         Created New Energies group to explore opportunities that combine wind and solar power with natural gas

·         In 2017, the company divested its interest in oil sands to pursue increased natural gas resources as part of its low-carbon and sustainability plans.

·         In 2016, Shell acquired BG, creating the world’s largest LNG company

·         In July 2017, Shell’s first floating liquefied natural gas (FLNG) vessel, Prelude arrived off the northwest shelf of Australia. Prelude is part of Shell’s plan to provide more low-carbon resources for power generation.

Neste Oy-10 years on DJSI

·         World’s largest renewable fuels producer, using palm and waste oils

·         Neste began development of renewable diesel with a pilot unit at the Provoo, Finland refinery

·         Over the past 10 years, Neste constructed and operates two world-scale renewable fuels operation at Singapore and Rotterdam, The Netherlands

·         Besides climate strategy with renewable fuels, Neste comprehensive human and labor rights programs to improve conditions for migrant workers within palm-oil supplying countries

·         The company has increased  the transparency of its supply chain and is vigilant on preserving forest and the environment.

More DJSI 2016 companies

Schneider Electric is a Gold level DJSI winner for four consecutive years. Like the O&G DJSI winners, Schneider Electric is continuously working toward improving the three sustainability KPIs—Economic, Environment, and Social. Schneider Electric is leading the digital transformation of energy management and automation. Using IoT-enabled solutions to seamless connect, collect, analyze, and act on data in real-time delivering enhanced safety, efficiency, reliability, and sustainability performance of major industries, including O&G.

As proven by DJSI companies, a green future can be achieved through safer practices, less emissions, and innovative renewable energies. Deploying leading-edge technologies enables maintenance of normal operations that minimize accidents and protect workers, communities, and the environment. More importantly, sustainable companies are profitable.