SPE 86616

Global Sustainability Reporting Practices and Trends in the Oil and

Gas Industry - A Survey
Sophie Depraz/IPIECA, Walter C. Retzsch/API, Donald A. Salmond/Battelle,
and Bernhard Metzger/Battelle

Copyright 2004, Society of Petroleum Engineers Inc.

This paper was prepared for presentation at The Seventh SPE International Conference on
Health, Safety, and Environment in Oil and Gas Exploration and Production held in Calgary,
Alberta, Canada, 2931 March 2004.
This paper was selected for presentation by an SPE Program Committee following review of
information contained in a proposal submitted by the author(s). Contents of the paper, as
presented, have not been reviewed by the Society of Petroleum Engineers and are subject to
correction by the author(s). The material, as presented, does not necessarily reflect any
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Introduction
Oil and natural gas companies realize that measuring and
reporting sustainability performance is increasingly important
to both internal and external stakeholders. Not only is it an
opportunity to enhance a companys reputation, it provides
license to operate and access to new opportunities. It also
clarifies the industry position for external stakeholders.

practices and trends, published in early 2003, and an on-going

effort to provide an on-line sustainability reporting support
tool for the industry. This paper focuses on the results of the
study, summarizes the report entitled Compendium of
Sustainability Reporting Practices and Trends, and looks
beyond the report to offer a perspective of future reporting
issues that face the industry.
Survey Methods
The IPIECA-API led industry task force contracted Battelle to
perform the research, analysis, and report development for this
study. Battelle surveyed API/IPIECA members worldwide to
develop a benchmark of current EHS and sustainability
performance measurements and reporting practices, trends,
and needs. Sixty-five companies were invited to complete an
on-line survey, and a total of 32 companies responded (Table
1).
Table 1 - Companies Responding to Survey
Participating Companies
Alyeska
Amerada Hess
BG
BHP Billiton
BP
Burlington Resources
Chevron Texaco
Citgo
CNOOC
Conoco
Engen Petroleum
ENI
ExxonMobil
Marathon
Metasource (Woodside)
Nexen

Oil and gas companies have for many years been carefully
measuring and openly reporting financial performance
according to well prescribed accounting rules. Yet, companies
face significant challenges when they extend the same practice
to reporting sustainability performance:

There is no industry consensus on what constitutes

sustainability reporting.
As companies internalize the concepts of sustainability,
they discover that the measures change.
While guidelines such as the Global Reporting Initiative
(GRI) are emerging, it is not clear that they satisfy the
needs of the oil and gas industry.

Ocean Energy
PDVSA
Petrobras
Petro-Canada
Petronas
Phillips
Premier Oil
Repsol YPF
Shell
Statoil
Suncor Energy Inc.
Sunoco
Williams
TotalFinaElf
Unocal
Valero

The characteristics of the companies responding included:

In response to this challenge, the American Petroleum Institute
(API) and the International Petroleum Industry Environmental
Conservation Association (IPIECA) initiated an industry-led
initiative in 2001 to help oil and gas companies and industry
associations improve the quality, scope, completeness and
usefulness of reporting sustainability performance as a means
to meet the needs and expectations of key internal and external
stakeholders.
This initiative resulted in a study of sustainability reporting

Mostly (69%) integrated oil and gas companies;

Range from >$25 billion (bn) (12 companies) $10-25bn
(4), <10bn (11), and <1bn (4);
Based in North America (53%), Europe (25%), and Asia
Pacific, Latin America, or Africa (22% combined) no
responses were provided by companies based in the
Middle East or Former Soviet Union;

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although most respondents also report health and safety

performance (red) and social/community investment (yellow).

Most (63%) issue annual public EHS and/or SD reports although 25 percent have never reported before; and
Overwhelmingly (88%) report for both internal
performance improvement and external stakeholder
engagement reasons.
(Compendium, 2003)

Figure 3-Commonly Reported Performance Measures

Oil Spills

Sustainability Reporting Practices

The study found that most companies (75% of those surveyed)
issue external reports that include measures of environmental
and safety performance. (Figure 1) Twenty companies report
annually on company-wide performance, while a smaller
number report to the public on performance at the business
area, operating unit or operating region level.

Fatalities and LTIR

Social/community investment
EHS related fines paid
NOx & SOx emissions
GhG emissions
Total hazardous waste
CO2,CH4, VOC emissions
5
10
15
20
Number of responses (n=32)

Figure 1- External Reporting Frequency

How often do you report performance externally?

A review of the metrics used indicates that the majority are

lagging indicators. Only social/community investment could
arguably be described as a leading indicator.

Company Wide
By business area (e.g.,
upstream, etc.)

Figure 4- Verification Practices

By some or all operating

units

How often do you verify results?

By operating region (e.g.,

GoM, Latin America, etc.)
0

10

15

20

25

External verification

Number of Responses
Annually

Less frequently than annually

More frequently than annually

Not reported

Internal verification

More companies report information internally than externally,

and they do it more frequently (Figure 2). They are also more
likely to disaggregate performance information to show results
at the business area level or lower.

Informal verification

10

12

14

16

18

Number of Responses
Annually

Less Frequently Than Annually

More Frequently Than Annually

Figure 2- Internal Reporting Frequency

Although many companies verify their performance results,

only nine respondents indicated that they use external verifiers
on an annual basis.

How often do you report performance internally?

Company Wide
By business area (e.g.,
upstream, etc.)
By some or all operating
units
By operating region (e.g.,
GoM, Latin America, etc.)
0

10

15

20

25

Number of Responses
Annually

Less frequently than annually

More frequently than annually

Not reported

Interestingly, we found that internal reporting of disaggregated

information, while more frequent, was likely to be limited to
environmental performance indicators. For example, 20 of the
25 companies reporting social/community investments do so
only at the company level.
The most commonly reported performance measures are
environmental indicators (shown in blue in Figure 3 below),

Sustainability Reporting Trends

The study found that future reporting practices are likely to
include more metrics and targets focused on sustainable
development. However, oil and gas companies, particularly
larger companies, still find that selecting, defining, and
measuring sustainability indicators are a challenge
In response to a question about which sustainability metrics
would most likely be reported in the future, respondents
indicated that consumption of raw materials and water,
sustainable development/safety and health expenditures and
investment in renewables are most likely to be reported
externally (Figure 5). Ethics and bribery issues were also
frequently mentioned, but for internal reporting.
Also notable is that more companies plan to commit to
performance targets in external reports than do so now,
particularly for metrics related to sustainability. Figure 6
shows the relative importance of resource issues in the future.

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A Look Ahead
The Compendium of Sustainability Reporting Practices and
Trends notes several key learnings for the industry to take into
consideration as it moves forward on corporate sustainability
reporting:

Commitment and Baseline for Progress The oil and

gas industry has a business case for improving
sustainability reporting and the survey provides an
important baseline from which the industry can steer
and measure its progress.
Importance of SD Reporting to Industry - Research
performed for the Joint Corporate Reporting
Initiative and on-going external engagement by the
industry on this topic indicates that the oil and gas
industry needs to improve reporting of sustainability
performance. This is because:
o

Stakeholder trust and engagement are

increasingly critical to business success in
the oil and gas industry; and

A key interest area of stakeholders is in SD

performance, an area in which performance
is difficult to measure.

In addition to these observations, there are forces at work

today that will change tomorrows reporting practices. It will
be helpful for the industry to consider them as it develops a
strategy for sustainability reporting.

Bandwidth Technology has increased the speed and

ease with which massive volumes of information can be
obtained. This is an opportunity and a risk to the
industry. Companies will need to grow their ability to
make the right decisions about which information to
share and how to share it, and will have to make that
decision with greater speed.
Consistency With greater bandwith comes the ability
for external stakeholders to compare data, and the
expectation that companies will facilitate that comparison
by reporting openly and consistently, not just within an
industry, but from industry to industry.

Making Progress on Trends in Reporting The

survey revealed a number of important trends in
sustainability reporting. For example:

Credibility - The current corporate credibility crisis is

driving the need to overcome presumptions of distrust.
This places greater pressure on companies to develop
reporting programs that are transparent, accurate, verified
and timely.

Consistency in Reporting The industry

needs consistent definitions and guidelines
for sustainability performance metrics.

Trends in regulation and sustainability practices may, in the

future, change the voluntary nature of reporting and the
reporting boundaries

Reporting at the Local Level - Reporting at

the local (operating unit or country) level is
becoming more prevalent and seen as more
important, especially for indicators of
impact.

used and ensuring that performance in these areas is

tracked accurately and reliably.

Development of Sustainability Metrics - In

its attempts to improve reporting practices,
the industry should pay particular attention
to developing reliable and consistent
methods to define and measure performance
for indicators of resource intensity (water
and energy use) as well as social
accountability.
Verification The industry, as well as
outside stakeholders, have identified
external verification as an issue of
increasing importance to sustainability.

Quality vs. Quantity of Metrics and Targets - oil and

gas companies will do well to ensure they have
systems to accurately and reliably set targets for,
measure, and promote performance improvement for
indicators that are meaningful and supportive of their
businesses. In making progress on sustainability
performance reporting, companies may make best use
of resources by limiting the number of indicators

Mandate The European Union, South Africa and

Canada are all moving toward mandatory sustainability
reporting. NGOs and other stakeholders are pressing the
Securities and Exchange Commission to require
additional disclosure of environmental liabilities.
Integration - The current corporate or facility boundaries
for monitoring and reporting performance may broaden
in the future. Life-cycle concepts, as well as the trend
toward including suppliers and contractors in teaming
arrangements, may influence the breadth of reporting to
include the entire supply chain.

More speculative, but with some basis in todays shift in

regulatory philosophy and consumerism, future scenarios
could increase the importance of reporting to a companys
success:

Reliance - Companies and governments may shift

toward more reliance on self-regulation. With that
shift may come a role for reporting as a means of
reducing regulatory burden and cost

Influence Just as todays consumers compare

alternatives using product information, tomorrows

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consumer may have more data for more products,

available instantly (see Bandwith). In such an
environment, company performance could be a
significant differentiating factor.
Figure 5- Future Sustainability Reporting Practices

Metric only
Social
Social/Community Investment
Employee Volunteer Time
Diversity (ethnic, gender)
Employee Issues
Employee Turnover
Child Labor
Bribery/Business Ethics Cases
Resource Management
Energy Consumption/Production
Total Water Consumption
Raw Material Consumed
Land Disturbance/Rehabilitation
Investment in Renewables (%)
Economic
Environmental Expenditures
Safety/Health Expenditures
Sustainable Development Expenditures
Regulatory Sanctions (Penalties)
HSE-Related Fines/Penalties Paid
HSE-Related Citations/NOVs
Other Metrics
ISO 14001 or Other Mgt. System
Contractor/Supplier HSE Performance

Considering Reporting
Externally in the Future

Internally Measured Not

Considering Reporting

SPE 86616

Figure

-Ranking

of

Future

Resource

Issue

Reporting

Water
Energy
Security
Renewables
Social Accountability (e.g., ethics, bribery, child labor, diversity)
Life-Cycle Assessment
Eco-efficiency
Environmental
Emissions to Air
Biodiversity
Indigenous People
Product Stewardship
Technology Innovation
Effluents to Water
Human Rights (e.g., forced labor, freedom of association)
Safety
Health
Materials
Waste
Training
Facility/Material Losses or Loss Prevention
Animal Testing
0

Number of Responses
Increasing

Sam

Decreasing