GRI Standard to unlock reporting on sector’s sustainability challenges
Today (5TH October) marks a landmark in sustainability reporting as a new standard for oil and gas has been launched, bringing about a complete disclosure on the complexity of transparency demands being faced within the sector – best positioning companies to highlight accountability for their impacts and how they are switching to a low-carbon future.
The GRI Sector Standard for Oil and Gas pays close attention to sectors which create the greatest challenges on sustainable development. How decisions and actions of companies tackle widespread stakeholder concerns about their impacts related to climate change are at the heart of this is, while guaranteeing a fair transition for workers, communities and the environment.
GRI’s first Sector Standard applies to any organization involved in oil and gas exploration, development, extraction, storage, transportation or refinement. Paramount features include that it:
- Guides reporting across the 22 most likely material topics, including climate adaptation, resilience and transition, site closure and rehabilitation, biodiversity, the rights of indigenous peoples, anti-corruption, water and waste.
- Ensures full disclosure on greenhouse gas emissions – both direct (Scope 1 and 2) and indirect emissions created by the end-use of their products (Scope 3).
- Demonstrates authoritative expectations for responsible business, including the Extractive Industries Transparency Initiative (EITI) and Task Force on Climate-Related Financial Disclosures (TCFD).
- Maintains multi-stakeholder and global legitimacy, with development chaired by a group of leading figures in areas such as business, investment, civil society, mediation and labor institutions.
2021 has been the year of a series of reports that all highlight demands for greater transparency from the oil and gas sector. The International Energy Agency Net Zero by 2050 study quotes a fast transition from fossil fuels in the global energy mix as vital. The World Benchmarking Alliance Oil & Gas Benchmark have voiced their growing concerns in terms of a ‘lack of comprehensive and comparable climate reporting’ in this sector, notably for Scope 3 GHG emissions. Whereas calls for ‘strong and sustained reductions’ in GHG emissions to limit climate change have been made by The Assessment Report from the Intergovernmental Panel on Climate Change.
“The transition to a low-carbon economy is quickly required, and to mitigate the effects of climate change, is obvious for all to see. By oil and gas organizations committing to transparency through the GRI Sector Standard, they can show that they have a string willingness to take part in the solution, highlighting the business case for change. The Sector Standard gets to the heart of the issues that are paramount when oil and gas companies provide comprehensive reporting standard to fully disclose their impacts on the economy, the environment and people. It will lead to greater transparency that stakeholders are demanding, as a way of assessing sustainability impacts and performance throughout the sector.
Mia D’Adhemar, Senior Manager, GRI Sector Program
“GRI has long been helping companies to advance their sustainability reporting and communicate their impacts on key issues, and IPIECA has enjoyed a constructive relationship over many years. Our members are committed to sustainability reporting, with many using the GRI Standards to guide the development of their reports. IPIECA welcomes GRI efforts to support the oil and gas industry to effectively communicate with stakeholders, as well as to harmonise disclosure expectations with other frameworks.”
Brian Sullivan, Executive Director of IPIECA (International Petroleum Industry Environmental Conservation Association)
“The World Benchmarking Alliance welcomes our ally, GRI’s new Oil and Gas Sector Standard, as a major step forward in increasing transparency and disclosure by companies in the sector. More information on how companies will achieve a just and an equitable low carbon transition will enable the WBA Climate and Energy Benchmark to measure progress and hold companies to account.”
Charlotte Hugman, Leading Research, Decarbonisation and Energy Transformation, World Benchmarking Alliance
“For Sasol, having just launched its new emission reduction targets, the Sector Standard for Oil and Gas is an important tool through which Sasol is able to position its insights as it transitions, with focused stakeholder engagement where it truly matters. As we progress along the journey, the GRI Standard also allows us and other industry players to re-evaluate data in the context of the identified drivers of change.”
Alexandra Russell, Chief Risk Officer for Sasol, the global integrated energy company (and a member of the working group)
Sector Standards finalise GRI’s integrated and modular system of reporting. Organizations commence with the Universal Standards – for which a prominent update has been published today – joined by applicable Sector Standards alongside relevant Topic Standards. 40 sectors have been identified for further standards including: coal, mining, agriculture, and fishing.
GRI 11: Oil and Gas Sector 2021 encourages companies to engage with the associated relevant GRI Topic Standards, describes the sectors most significant sustainability impacts, while introducing new, sector-specific disclosures. Freely available now for download, it will be adopted for reporting from 1 January 2023, with early adoption promoted.
Through the GRI Sector Program, the Sector Standard for both Oil and Gas is the first to be developed. Initiated and approved by the Global Sustainability Standards Board, the independent body responsible for setting the GRI Standards. Developed by a 17-member project working group, which is also progressing a Sector Standard for Coal, expected to be completed in early 2022.