Eleven global players in the oil and gas industry meet sustainable investment criteria. This was the finding of Munich-based rating agency oekom research, which used social and environmental criteria to evaluate 26 oil and gas companies.
Suncor Energy (CA) and Eni (IT) are leading the way in the industry by consistently putting into practice their belief in sustainable development and attaining quantifiable success, e.g. in reducing emissions. In contrast, ChevronTexaco and the giant of the industry, ExxonMobil (both US), appear to be merely paying lip service to sustainability. They finish right down in the bottom half of the rating, partly because of their inaction in the field of climate protection. The Munich-based rating agencys research influences 20 portfolios which are managed on the basis of sustainability criteria.
The analysts at oekom research have identified a number of key issues which will be central to the future of the oil and gas industry and which have certain risks associated with them: safety aspects of installations and transport facilities, emissions, involvement in renewable energies and activities in environmentally and culturally sensitive areas.
"Our Corporate Responsibility Rating has shown that the entire industry still exhibits weaknesses as far as safety precautions at the workplace and in the transportation of oil and gas are concerned, says Evelyn Bohle, the analyst in charge of the survey at oekom research. "Fatal industrial accidents, which account for the deaths of 50 or more employees every year, continue to occur. None of the 26 companies analyzed was able to record zero work-related fatal accidents in 2002. Tanker disasters, which can pollute entire stretches of the sea and coast for years, also occur frequently and can be traced back to inadequate safety. Replacing the traditional single-hulled tankers with double-walled vessels could alleviate the situation here significantly. Even the leading companies have not yet converted their fleets fully, continues Bohle.
However, the trend in figures for emissions by the industry leaders Suncor and Eni made a positive impression on the analysts. In recent years, both companies have been able to e.g. cut their gas flaring rate through the implementation of compression or recirculation systems during the course of drilling for crude oil. In addition, they are involved in a number of different initiatives to promote climate protection.
The activities of the industry in developing a future market for renewable energies are also benefitting climate protection. A number of companies are already investing in wind and solar energy or fuel cells. The companies most heavily involved here are BP and Royal Dutch/Shell. Involvement is generally confined to smaller business divisions or research projects. In view of the ever clearer signs of climate change, it remains to be hoped that companies will become more involved in this area. This applies in particular to the industrial giant ExxonMobil (US). The group continues to be one of the most vehement opponents of climate protection. In the meantime, opposition to this state of affairs is growing even in its own ranks: at this years annual general meeting, shareholders representatives sharply criticised ExxonMobils negative stance, and it is even seen as a threat to the giants long-term financial performance.
Risks to a companys economic position can also emerge as a result of conflicts in sensitive regions. The most recent example is the unrest in Nigeria. For years, there have been repeated occurrences of hostage-taking and acts of sabotage against oil company installations, since the poor sections of the population are not benefitting from the countrys oil wealth, and the corporations are held partly responsible for this. In April of this year companies like ChevronTexaco and Royal Dutch/Shell were forced to close numerous sites in Nigeria temporarily because of the tense situation.
A corporate policy which firmly establishes social and environmental goals not only reduces risks but is also rewarded at the stock exchange. This conclusion is supported by a number of studies. Sustainable investments are therefore backed up not just by moral arguments but also by share price movements. More and more investors are aware of this and are causing strong growth in the market. While in 1998 the volume of sustainable public funds in German-speaking countries amounted to just 307 million euros, by the end of 2002 it had already reached 2.1 billion euros.