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Energy Tomorrow Blog

Q&A: Linking Environmental, Social and Governance to Strong Performance

ESG  climate 

Mark Green

Mark Green
Posted October 6, 2020

ESG – environmental, social and governance – covers the way that businesses achieve strong performance on a range of sustainability issues. Below, Dr. Aaron Padilla, API manager of climate and ESG policy, explains the natural gas and oil industry’s focus on ESG as integral to the way its members conduct themselves in developing energy, as well as the way stewardship on these issues is helping define the modern industry’s identity in 2020 and beyond.        

A little background: Dr. Padilla leads API’s work to determine and represent the natural gas and oil industry’s own initiatives and its public policy positions on ESG and climate issues. In the past 13 years, he has worked in 30 countries across six continents. Prior to joining API, he worked for Chevron as a senior advisor for global issues and public policy. Dr. Padilla is a Marshall Scholar and Truman Scholar, and he completed his M.Phil. and Ph.D. at the University of Cambridge and B.A. at Stanford University.

Q: How does ESG apply to the natural gas and oil industry?

A: ESG is often interchangeable with the term “sustainability” and encompasses several environmental, social and safety issues. There’s climate change and energy, there’s environment – which covers air and water and waste and other elements of environmental performance – and then there’s safety, health and security, which obviously are a key focus of our industry. … And then there’s social performance more broadly, and that encompasses community relations and responsibility, that companies have to respect human rights. All of those issues fit under ESG. The governance part is the way companies have systematic processes and procedures and ways of managing the risks and opportunities associated with these environmental, social and safety issues.

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