Investors in the oil and gas industry face a number of material risks from emissions of methane which require heightened scrutiny to assess operator performance and risk management, as well as to improve disclosure from companies.
Methane is a key frontier for investor engagement with oil and gas operators. Investors in the oil and gas industry face a number of material risks from emissions of methane which require heightened scrutiny to assess operator performance and risk management, as well as to improve disclosure from companies.
Operators face a changing societal, political and regulatory environment in a globally carbon-constrained world and must choose whether to adapt and lead or incur the consequences of lagging.
Unmanaged emissions of methane will directly undermine the industry’s ability to play a role in this environment, impairing its social license to operate and public trust while representing lost product and operational inefficiency. Conversely, active methane management can inspire investor and stakeholder confidence while driving efficiencies and cutting risk. Despite the importance of methane risks and opportunities, there is a distinct gap in disclosure that impairs investor’s ability to distinguish leaders from laggards and appropriately manage the issue.
Engagement from investors will be required to gain the data they need to factor methane management into portfolio selection, while encouraging continuous improvement as operators progress across the spectrum. This guide is designed to be a tool to support such constructive dialogue, holding companies accountable for managing methane and driving results. Each company will fall on a different part of the spectrum of methane management, but well-managed companies that work to limit material risks will demonstrate forward progress as they measure, report and reduce their emissions.
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An investor's guide to methane