Updated: Apr 14, 2021
What can we all expect
Communities and stakeholders have made it clear that social, economic, and environmental (ESG) performance are key components to securing a sustainable future. The energy sector is being pressured to demonstrate initiatives to support climate change and other environmental and social governance by their investors. Globally there is recognition that climate change is taking place and there could be a destabilization of our financial system if this risk is not effectively addressed. Bridging the gaps between ESG performance metrics and the energy sector financial stability will drive meaningful change in social and environmental issues that are grounded in long term-value for our communities and stakeholders.
Maintaining access to fresh capital will be increasingly contingent on sustainable practices as investors are seeking better ESG performance. To plan for future investment in the energy sector we can expect in the next few years that having great business values will add shareholder value. Sustainability Accounting or Sustainability 2.0 reflects the management of a corporation’s environmental and social impacts arising from production of oil and gas, as well as its management of the environmental and social capital necessary to create long-term value for our communities and stakeholders. Therefore, the impacts of Sustainability 2.0 can only be positive when it comes to innovation, new industries, improved business models, and corporate governance.
The energy sector is endeavoring on sustainable solutions to foster the energy sector longevity, growth, and value. It is critical to get it right when it comes to ESG financial metrics, technologies, and transparency and disclosure requirements. Therefore, we at Breakwater Vantage will address CDP, GRI, SASB’s materiality map, SGB action manager tool, and Sustainable Development Goals (SDGs) as these can become the leading indicators for future growth and financial stability in the energy sector. In our analysis, we will address how the industry’s ESG metrics can be improved by considering climate-related factors in business strategy, risk management, operations and implementing key technologies that focuses on energy management tools, water and wastewater management programs, GHG emission reduction technologies and greater focus on water treatment solutions to minimize ecological impacts.
ESG is a call for action for all of us to collaboratively work together towards a healthy energy transition and integration of solutions to reduce environmental and community impact. Additional work would be required to bridging two critical imbalances between "investor expectations" and the "energy sector doing the right thing". To achieve sustainable operational and financial performance within the energy sector we will all need to work together, and we are already seeing some early signs where more technology providers, academia, and government agencies are joining forces to develop economical, energy-efficient technology, and transition to alternative clean energy solutions.