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New Energy World
New Energy World embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low carbon technologies.
Does ESG hold the key to energy transition?
28/9/2022
6 min read
The war in Ukraine and the response by energy companies and governments – to perhaps return to fossil fuel development – has raised serious questions around corporate environmental, social and governance. It’s a changing picture, as Nick Cottam reports.
The war in Ukraine has forced Europe to think hard about energy security and the need to keep all types of energy in the mix – fossil, renewables and nuclear. Amid bumper profits and a fair amount of political posturing, energy companies must respond by demonstrating that they are well managed, responsible operations with a realistic path to net zero and a low carbon future.
A key measure for stakeholders – notably the investment community – continues to be the strength of ESG (environmental, social and governance) policies for the companies concerned. Questions covering everything from carbon reduction strategies to offshore safety are helping to determine how energy companies – and indeed companies in all walks of business – are managing the risks which may impact on their financial performance and, ultimately, their share price.
Corporate goodness
‘Companies that actually manage their financially relevant risks tend to be more efficient… and are doing things that actually improve their business,’ says Linda-Eling Lee, Global Head of ESG and Climate Research at the credit ratings company MSCI. ‘I think the world is looking for a measure of what they call corporate goodness.’