To assist oil and gas companies with reporting on nonfinancial performance, the Oil & Gas Industry Guidance on Voluntary Sustainability Reporting was published in 2005 as a framework for improving the quality and consistency of voluntary sustainability reporting. The guidance was revised in 2010 and again in 2015. This paper discusses the value of sustainability reporting, the motivation behind the most recent update, and the changes made and provides an overview of social performance indicators in the third edition.
The Value of Sustainability Reporting
Oil and gas companies were among the earliest businesses to adopt sustainability reporting and, since it gained traction in the mid-1990s, have provided some leading examples of reporting practices. Key business drivers identified by companies in support of sustainability reporting include
- Enhanced business and brand value as investor and financial market confidence grows in response to evidence that the company is managing material risks and positioning itself to take advantage of emerging opportunities in the market
- Improved internal operations, recruitment, and morale as employees develop a clear understanding of the company’s sustainability imperatives and as the more systematic management of data, knowledge, and insight helps improve operational performance and decision-making—all serving to attract and retain employees and helping to secure long-term competitive advantage
- Strengthened relationships as local community leaders, civil society representatives, government officials and regulators, and other key stakeholders learn how the company responsibly manages sustainability issues
- Enhanced trust, credibility, and license to operate as customers, suppliers, and the wider society understand the company’s brand, operations, and products
Through communication on sustainability issues, a company’s report becomes a reliable source of information for its stakeholders. By transparently describing its biggest challenges, reporting underpins stakeholder engagement and represents the company’s values in action.Oil & Gas Industry Guidance on Voluntary Sustainability Reporting
First and Second Editions. To help member companies develop or improve their sustainability reporting, IPIECA, the International Association of Oil and Gas Producers (IOGP), and the American Petroleum Institute (API) jointly published the Oil & Gas Industry Guidance on Voluntary Sustainability Reporting in April 2005. The document was produced to assist companies across the oil and gas industry in reporting on environmental, health and safety, social, and economic performance measures by providing sector-specific guidance.
