This article is one of three featured articles from the Highwood Voluntary Emissions Reduction Initiatives Report 2022. Download the full report here.
Selecting the Right Initiative for You
With 27 voluntary initiatives in this report, ample choice exists for prospective oil and gas companies. However, too much choice can sometimes be overwhelming – especially when it comes to new and unfamiliar topics. At Highwood, our clients commonly ask us whether they should participate in a voluntary initiative. In this section, we distill common guidance for oil and gas companies that are considering whether to go above and beyond emissions management regulations.
Know your objectives, dream big, and think ahead.
What is the company hoping to achieve? Does pressure exist from investors to achieve reduction targets or issue disclosures? Is participation driven by an internal strategy to identify possible carbon-related risks and opportunities? Understanding what drives the decision to engage in a voluntary initiative will help narrow down the options.
Start with the end in mind, then work backwards. You may want to sell your products for a premium in a differentiated gas market, produce a comprehensive ESG disclosure, or simply showcase your achievements. Before you jump, know where you want to land.
Get your hands dirty and ask questions.
Many of the voluntary initiatives covered in this report are in a formative phase. For some, questions remain around how to interpret requirements and meet expectations. We recommend getting familiar with the initiatives, which should involve research and asking lots of questions! We include some example questions below.
- Where does your company fit in the supply chain? Depending on the type of company, different initiatives may or may not be available. You can use the tables provided in this report to find out!
- What assets are you seeking to have covered? Your company’s facilities may differ significantly in terms of emissions, intensity, density, or other relevant factors. Most initiatives allow companies to choose their boundaries.
- What datasets are required? Do you have existing internal processes that collect relevant data? In some countries, the oil and gas industry is highly regulated, and some of the necessary data may already exist. On the other hand, significant time, energy, and cost may be required if major gaps exist.
- What benefits can be realized? Diverse direct and indirect benefits may arise from participation. Some examples include monetization of differentiated gas, easier access to capital, social license to operate, learning about your inventory, improving data collection, streamlining emissions management processes, accessing educational information, and participating in collaborative campaigns.
- How much work is it? Some initiatives have low barriers to entry while others can take months or years to achieve. Understanding what is involved – and whether it is already done – is important. For example, the SASB ESG Suite requires emissions quantification through the GHG Protocol Standards.
Start simple, small, and efficient.
Don’t bite off more than you can chew. Covering hundreds of sites from the start may lead to an overwhelming situation. Choose a manageable boundary, establish a system, and proceed from there. You can also select an accessible initiative that provides helpful educational resources and enable broad participation.
Leverage data that you already collect or can easily derive from existing datasets. Many of the initiatives considered in this report have emissions quantification requirements based on the GHG Protocol standard. Use these calculations as a kick-off point for your disclosures journey as they provide a strong foundation for future work.
Stay one step ahead.
Regulations and voluntary initiatives are both in a state of rapid evolution. Be aware of upcoming changes and seek ways to streamline disparate requirements. On the next page, we provide a map that highlights the interconnected nature of the emissions management landscape. This map can be used by participants to explore opportunities to leverage the same work and data in different ways.
A typical voluntary initiatives journey starts off with emissions quantification. The universal adage of “We can only manage what we measure” sums it up. From there, you can work your way to joining commitment initiatives, or apply for differentiated gas certification. Later, many of the efforts put into the other initiatives can contribute to the writing of ESG reports. You can also use the diagram to see what steps you need to take to achieve your desired endpoint.
*To learn more about the Voluntary Initiatives discussed above, please Download the full report here.
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Highwood is committed to providing free emissions reduction education and thought leadership to our industry. If your organization wants to take emissions management education, planning, and implementation to the next level, our team of experts would be happy to introduce you to our custom solutions. Feel free to reach out for a zero pressure, zero obligation chat with our team by email at [email protected] Learn more about our solutions online.