Sustainability Reporting Guidance for the Oil and Gas Industry

1. March 17th , 2021
Sustainability Reporting Guidance for the Oil and
Gas Industry

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5. Sustainability Reporting Guidance for the Oil and Gas
Industry
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The disclosure landscape is ever evolving. Individual and organizational stakeholders
around the world want to better understand the oil and gas sector and the impact of
its activities, risks, opportunities, and trade-offs. One of the ways companies are
responding to these requests is through sustainability reporting.
The International Environmental Conservation Association for the Petroleum Industry
(IPIECA), is an international association that aims to promote environmental and
social issues in the oil and gas industry. IPIECA was established following the UN
Environment Program (UNEP) request for the oil and gas industry to form channels of
communication with UNEP.
In 2020, IPIECA, in partnership with the American Petroleum Institute (API) and the
International Association of Oil and Gas Producers (IOGP), released the fourth edition
of “Sustainability Reporting Guidelines for the Oil and Gas Industry” (the Guidance).
The Guidance is a key tool for assisting companies in shaping their sustainability
report structure and content.
The Guidance covers 21 sustainability issue areas and 42 performance indicators that
fall under five modules. These issue areas and indicators were selected based on
industry consensus and significant insights and suggestions from an independent
panel of stakeholders with expertise in the sector and in sustainability reporting.
© 2021 Sustainability Knowledge Group
Sustainability Reporting Guidance for the Oil and Gas Industry

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Guidance structure
Using the Guidance helps demonstrate companies’ efforts in the oil and gas sector to
apply good reporting practices. The Guidance is divided into five modules:
1.Governance and business ethics: it covers issues of governance and management
systems, business ethics, and transparency issues.
2.Climate change and energy: it covers climate strategy and risk, technology,
emissions, energy, and flaring.
3.Environment: covers issues of water, biodiversity, air emissions, spills, materials
management, decommissioning.
4.Safety, health and security: It covers issues of workforce protection, product health,
safety and environmental risk, process safety, security.
5.Social: It covers issues of human rights management, labour practices, community
engagement, local content.
Benefits of reporting
Energy helps economies grow, improve health and quality of life. Meeting the world’s
future energy needs through a transition to low-emission energy sources is important
to achieving sustainable development. Therefore, it is necessary that the oil and gas
industry clearly communicate how it supports the energy transition.
While reporting on sustainability strategy and performance matters to many
stakeholders, its importance continues to increase for investors.
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Sustainability Reporting Guidance for the Oil and Gas Industry

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Climate change in particular has become a major topic for investors who themselves
receive demands from their clients and other stakeholders (including regulators) to
demonstrate their portfolios’ climate-related impact and climate resilience.
High-quality reports can make a difference in gaining valuable contracts and working
with companies of similar values. Likewise, companies can mitigate supply chain
risks of poor social and environmental practices by encouraging transparency in their
procurement processes.
The UN Sustainable Development Goals
Oil and gas companies play an important role in the global economy. While all of the
SDGs are potentially relevant, their activities can contribute to achieving the SDGs.
According to the IPIECA Annual Sustainability Report Survey results, 92% of Guidance
users reported or referred to the SDGs in their reports. 88% felt that their companies
were most material to SDG 8 (Decent work and economic growth) and 85% to SDG 7
(Affordable and clean energy) and SDG 13 (Climate action). At the same time, 81% of
companies supplement their reports with additional communication on specific
topics such as climate change risks and opportunities.
The figure below shows the connection between the five modules and the SDGs and
guides companies to demonstrate their contributions to the SDGs.
© 2021 Sustainability Knowledge Group
Sustainability Reporting Guidance for the Oil and Gas Industry

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Mapping the modules to the SDGs
© 2021 Sustainability Knowledge Group
Sustainability Reporting Guidance for the Oil and Gas Industry

10. 10
Many oil and gas companies report their contribution to the SDGs and usually do so
in one of two ways:
1.Use SDGs as a framework to define their overall contribution to sustainable
development.
2.Mapping and discussing the material issues against the SDGs which are most
applicable to their activities.
Guidance assists companies with one of these two options, provides the data and
other evidence for the assertions the company makes about its contribution to the
SDGs. It is important to note that the company’s contribution include positive
contributions to the SDGs as well as activities that challenge the achievement of a
Goal. To help, Guidance also refers to tools like the SDG Compass and IPIECA SDG
Atlas provide guidance on how to align strategies and measure and manage
contributions to the SDGs can be used.
Reporting frameworks
This reporting Guidance has been developed to provide oil and gas industry-specific
information on good practices in sustainability reporting. The guidance takes into
account other sustainability reporting frameworks. Since there is no single set of
agreed-upon disclosures, this guidance aims to reflect other good practices and
understand the frameworks that are important to key stakeholders as it adapts them
to the context of the oil and gas industry.
© 2021 Sustainability Knowledge Group
Sustainability Reporting Guidance for the Oil and Gas Industry

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The Guidance has listed the five frameworks most used by IPIECA members in 2019
to guide their reports, and they are:
•Global Reporting Initiative (GRI)
•Task Force on Climate-Related Financial Disclosures (TCFD)
•UN Global Compact
•UN Guiding Principles on Business and Human Rights
•UN Sustainable Development Goals (UN SDGs)
In addition to a number of other well-established frameworks that are frequently
used:
•International Organization for Standardization (ISO)
•Principles for Responsible Investment (PRI)
•Sustainability Accounting Standards Board (SASB)
•The Organization for Economic Co-operation and Development
•CDP
•WBCSD / WRI
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Sustainability Reporting Guidance for the Oil and Gas Industry

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