On May 5th, the Law Firm Veirano Advogados promoted the webinar “ESG in the O&G Industry”. With the moderation of Ana Lucia Grizzi, partner at Veirano Advogados, the event was attended by Clarissa Lins, founding partner of Catavento, Alejandro Segura, General Manager of Nature Based Solutions in Latin America at Shell and Rogério Campos, partner at Veirano Advogados.
After an opening presentation on the ESG theme by Ana Lucia Grizzi, the participants answered a series of questions about the maturity of the ESG agenda in the O&G industry in Brazil and in the world, how the pandemic strengthened the insertion of the agenda on companies’ routines, in what ways the E (environment) and the S (social) have been structured in companies in the sector, and finally, how nature-based solutions can be implemented in industry.
First, Clarissa Lins highlighted that the ESG maturity of the O&G industry has increased in the last decade. Previously seen as a threat, environmental, social and governance factors are now topics of interest to the most diverse stakeholders such as investors, regulators and customers. She said, therefore, that companies in the sector cannot fail to include them in their decision-making. In this context, she pointed out the need to establish strategies for business perpetuity in the face of more restrictive regulations on carbon emissions. Aditionally, she stated that different scenarios open space for new business opportunities, mainly involving the diversification of products portfolios and business services.
In relation to the pandemic, Clarissa Lins explained that the Brazilian O&G industry searched for the sectors’ resilience through a more cautious consideration of social factors such as occupational health and safety. She also cited the importance that was given to mental health and to a broader connection with the society.
Alejandro Segura indicated that, to address the “E” (environmental factors), Shell is including the generation of renewable energy in its operations and that they are working with customers to reduce their emissions. Moreover, he highlighted the importance nature-based solutions, such as forests, mangroves, and agricultural land. In addition, he mentioned that the company is also investing in carbon capture and storage technologies (CCS). Finally, he explained the importance of carbon pricing for emissions reductions in the sector, clearing that both markets, regulated and voluntary, must go together, always attempting to the quality of credits.
Rogério Campos, on the other hand, reinforced, among other aspects, that the level of adoption of the ESG agenda depends on the geographic location of companies, with a greater advance in Europe, and on its shareholders characteristics. Besides that, he stated that O&G companies should start thinking about the concept of becoming energy or energy infrastructure companies, to expand their businesses.
Finally, Clarissa Lins explained how the demand for greater scrutiny on ESG topics by investors has been taking place and that there are opportunities for companies in the O&G sector to better respond to these questions, using, for example, the reporting tool of TCFD. Moreover, she stressed the importance of having boards with knowledge on the respective topics of environment, social and governance and of the inclusion of related metrics in executive variable compensation scorecards.