The corporate world is filled with references to ESG — the environmental, social and governance factors that investors and consumers scrutinize to determine which firms are delivering true value and staying in tune with their own priorities. This blog is no different — we’ve written about it here, here and here.
While you might take this amount of attention as a sign that ESG is just another corporate buzzword, investing in ESG is not a passing fad; it’s the future.
When it comes to the environmental segment of ESG, the energy industry is not simply checking a box or using talking points. Rather, it is investing in sustainability measures that will create and maintain value over the long term. These investments reflect the priorities of investors, employees and customers, as well as the companies’ desire to be environmental stewards and good corporate citizens committed to preserving the communities in which they live and operate.
We’re privileged to have a firsthand look at ESG principles in action. Southwestern Energy (SWN) is a proud member of the ONE Future Coalition, a group of 44 companies across the natural gas value chain (from wellhead to receiving customer) with a collective goal of reducing industry methane emissions to 1% or less.
And this commitment to tangible targets is working! ONE Future members registered a joint methane intensity number of 0.334%, or one-third of the 1% goal. Even more impressive is SWN’s individual methane intensity of 0.055%, well below the 2025 target for the production sector of 0.28%.
While leading on air quality, SWN has accomplished freshwater neutrality for the fifth consecutive year, and it remains the only exploration and production company to achieve such an ambitious goal. For the life of the program, SWN has helped return over 14.3 billion gallons of fresh water to the environment. In 2020, SWN also recycled 95% of the production water that it manages within its operations.
NRG, a leading energy provider with retail brands and a diverse generation portfolio, has reduced carbon emissions in the last 10 years by more than 40 million metric tons — the equivalent of taking 9 million cars off the road! And while the company leads by example in the environmental portion of ESG, it also has refreshed its governance structure, changing its board makeup so that, of the 10 members, three are women and three are ethnically diverse.
The energy industry understands it’s in the spotlight more than ever, with national and regional efforts to move toward increased clean energy production and sustainably produced end products. Investors, employees and customers expect adherence to sustainability, social responsibility and governance structures that can carry out the company’s vision. ESG is changing the way the industry operates now and is guiding its future innovations and practices, allowing companies to turn purpose into value.
