WPC IPIECA Presentation

							Sustainability reporting in
the oil and gas industry:

Environmental, Social & Economic, and
Health & Safety performance

Paul Krishna
IPIECA Reporting Task Force Chairman




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 IPIECA


• Global association involving
  both the upstream and
  downstream oil and gas
  industry
• Focus on environmental and
  social issues
• Formed in 1974 as the oil
  and gas industry’s main
  channel of communication
  with the United Nations




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Membership




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   Oil and gas industry sustainability reporting

• Oil and gas companies are among the
  pioneers of sustainability reporting.
• The 2005 Guidance provided the industry-
  specific framework for reporting on
  environmental, health, safety, social and
  economic performance.
• The 2010 Guidance revision occurred over 3
  years by hundreds of technical experts, from
  26 companies and industry associations.
     – Guidance is applicable for national oil
       companies, independent oil companies, and
       oil and gas service companies.
     – Extensively reviewed and critiqued with an
       external stakeholder panel.
     – Assists new and existing reporters to develop
       and improve their reporting processes.
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  What’s new

• Provides significant added guidance on reporting
   - Addresses two major hurdles – ‘why report’ and
     ‘how to report’.
   - Describes the strategic sustainability issues facing
     industry
   - Clearer focus on assessing “material” issues for
     the company
   - Improved technical indicators and reporting
     elements for use in reporting sustainability
     performance.
   - Greater definition of indicators and reporting
     protocols
   - Facilitates benchmarking and data aggregation
   - Enables greater consistency



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  Section 1: Why report?
  Communicating strategic sustainability issues


• Benefits of Reporting
    –    Enhanced business value
    –    Improved operations
    –    Strengthened relationships
    –    Enhanced trust and credibility


• Using and Referencing the Guidance
    – The guidance is voluntary, there is no
      minimum criteria
    – Companies using the process or content are
      encouraged to reference the Guidance




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Section 2: How to report?
The sustainability reporting process




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Section 3 – What to report?
Reporting hierarchy is organized for use and application

• Sustainability issues are considered material     Sustainability
  to most oil and gas companies.                  Reporting Hierarchy


• Guidance introduces Sustainability:              Sustainability Issue

    – Issues (11).
    – Indicators (33).
    – Reporting elements (Metrics) (190).
                                                       Indicators
• Guidance enables consistent year-to-year
  reporting
    – Based on materiality assessment
    – Describe progress                           Reporting Elements
    – Put results in context                           (Metric)


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Section 3 – What to report?
Sustainability Issues and their Indicators




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 Section 3 – What to report?
 Indicator Format and Reporting Element Examples

 Name & # of Indicator

 Descriptions

 Purpose

 Scope

 Reporting Basis

 Definition of Terms

 Reporting Elements
  • Common
  • Supplemental
  • Other
                                           E6: Fresh and engagement
                          SE1: Local community impactsWater
 References                 HS3: Occupational injury and illness incidents
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   Industry endorsements received from:



• African Refiners Association (ARA)

• Canadian Petroleum Products Institute (CPPI)

• The oil companies' European association for
  environment, health and safety in refining and
  distribution (CONCAWE)

• Regional Association of Oil and Gas Companies
  in Latin America and the Caribbean (ARPEL)

• South African Petroleum Industry Association
  (SAPIA)

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  External stakeholder engagement

• Independent external stakeholder panel
    – Provided insights and feedback on direction and priorities
    – Group of experts with solid understanding of sustainability
      issues affecting the oil and gas industry
    – Representative of views of typical report readers:
               •   Environmental and community-oriented NGOs
               •   Business and industry
               •   Investors
               •   Multi-lateral institutions


• Public comment
    – On-line survey to obtain feedback on Guidance, priority
      areas
    – Second comment period / on-line survey on draft of
      revised Guidance

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Engagement with GRI

• Regular interactions to promote synergies
        –    Joint Communication Plan
        –    Periodic updates via meetings and conference calls
        –    Key role of members-in-common– BP, Statoil, Hess, Petrobras, Shell
        –    Sharing of key documents
        –    Recognition of the value of both processes

• Differentiation of the two processes
        – GRI is multi-sector focused with broad external engagement (multi-
          stakeholder, consensus-seeking approach)
        – IPIECA places higher priority on industry-specific issues and technical
          protocols

• Oil and Gas Sector Supplement expected late 2011/early 2012
        – Will work cooperatively on mapping Guidance to the Oil and Gas
          Sector Supplement
        – Working towards alignment wherever possible


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Next steps...


• IPIECA, API and OGP are now focused on:
        – Encouraging the practice of sustainability reporting in the oil and gas
          industry
        – Promoting utilization of the Guidance
        – Developing tools for new reporters
        – Monitoring developments in the field of sustainability reporting, e.g.
          Integrated reporting
        – Seeking industry endorsements for the Guidance




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