The sustainability reporting process

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Inside the revised Guidance

Front Section: Process
Why report? How to report What to report

Strong indicator sections: Content

Environmental Health and Safety Social and Economic

Appendices: Additional background info

Boundaries Glossary Changes from 2005 Edition, relationship to GRI G3 and indicator mapping Measurement/conversion factors References

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Section 1: Why report

Communicating strategic sustainability issues

Why report?
Enhanced business value Improved operations Strengthened relationships Enhanced trust and credibility

And a few more

Meet growing expectations of broad range of stakeholders Improved reputation with socially responsible investors Employee recruitment and retention Brand protection and customer loyalty

Section 2: How to report

The sustainability reporting process

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 Set out how a companys sustainability priorities are integrated into its overall vision and business strategy Define sustainability
Describe understanding of what sustainability, social responsibility or corporate citizenship means to the company

Reveal vision
Vision should look to the sustainability opportunities and challenges of supplying energy into the future. Often presented in the context of existing corporate values, principles and policy commitments

Explain strategy
How to create value for its shareholders by means of its current performance; describing principal sustainability issues and approach to addressing them
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 Important to report on the role of the board and/or executives with regard to sustainability-related governance and management systems Outline board governance
How it functions, how often it meets, whether board members are associated with sustainability issues, etc. Discuss the role of the most senior executives and their structure for managing the day-to-day business.

Detail management systems

The status, implementation and effectiveness of such management systems are usually addressed in a sustainability report

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 Information in a report should be relevant to users and should be provided consistently to enable comparability Defining materiality
Material issues for sustainability reporting are those that, have the potential to significantly affect sustainability performance

Use a simple process

Companies should establish a simple process to identify those material issues that warrant inclusion in their report.

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 Indicator selection
Material issues for reporting should inform the selection of indicators The Guidance contains 11 issue categories that are likely to be relevant to many oil and gas companies for reporting, along with 33 performance indicators for use by companies to demonstrate how the issues are being addressed Companies may choose to customize indicators or develop additional measures to report on key issues

Data collection
Determine what quantitative data and qualitative information will be collected within the company A choice of reporting elements is provided that may be applicable to the companys operations, and which define the types of information or data that can be collected
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 Analyse the indicator data and incorporate the results into a narrative that describes performance progress Putting results into context
Developing a narrative requires a company to think strategically about how it communicates material issues and indicator data
How the results are relevant to the companys operations The nature of impacts on relevant stakeholders The opinions of stakeholders or other credible third parties on those impacts How the results may compare to relevant industry benchmarks or averages Strategic responses, goals or lessons learned

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 Explain progress against goals

Plot progress against plans to achieve goals, together with explanations for variations in related performance

Recognize complex issues

Material issues may have many dimensions and involve reporting against a variety of indicators

Employ case studies

Including real-world challenges illustrate how a company can manage and integrate sustainability performance into its operations

Incorporating financial data

Can be useful to incorporate selected financial and operating information to provide business context when reporting on sustainability issues.
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 Inclusion of information to provide assurance on the content of sustainability reports is a common practice Assurance processes provide an opinion regarding the quality of reported information Audit-based verification
Typically focuses on quantitative data, may also seek to test materiality processes or assess qualitative statements or claims

Third-party commentary
Can be statements by experts, a stakeholder panel, or academic, non-governmental organization (NGO) or community comments May include views on management performance, progress and recommendations. May also provide an opinion on whether the report includes the most relevant and material issues

Important to explain how assurance is achieved

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Section 3: What to report

Content, in context - 11 key issues, 33 indicators Environmental Issues
Climate change and energy (4 indicators) Ecosystem services (2 indicators) Local environmental impacts (4 indicators)

Health and Safety Issues

Workforce protection (3 indicators) Product health, safety and environmental risks (1 indicator) Process safety and asset integrity (1 indicator)

Social and Economic Issues

Community and society (4 indicators Local content (3 indicators) Human rights (3 indicators) Business ethics and transparency (4 indicators) Labor practices (4 indicators)

Section 4: Environmental indicators

Issue category Climate change and energy Indicator E1 E2 E3 E4 Ecosystem services Local environmental impacts E5 E6 E7 E8 E9 Greenhouse gas emissions Energy use Alternative energy sources Flared gas Biodiversity and ecosystem services Fresh water Other air emissions Spills to the environment Discharges to water

E10 Waste

Section 5: Health and safety indicators

Issue category Workforce protection Indicator HS1 Workforce participation HS2 Workforce health HS3 Occupational injury and illness incidents Product health, safety and environmental risks Process safety and Asset integrity HS4 Product stewardship HS5 Process safety

Section 6: Social and economic indicators (1 of 2)

Issue Category Community and Society Indicator SE1 SE2 SE3 SE4 Local Content SE5 SE6 SE7 Human Rights SE8 SE9 Local community impacts and engagement Indigenous peoples Involuntary resettlement Social investment Local content practices Local hiring practices Local procurement and supplier development Human rights due diligence Human rights and suppliers

SE10 Security and human rights

Social and economic indicators (2 of 2)

Issue Category Indicator

Business ethics and transparency

SE11
SE12 SE13

Preventing corruption
Preventing corruption involving business partners Transparency of payments to host governments

SE14
Labor protection SE15 SE16

Public advocacy and lobbying

Workforce diversity and inclusion Workforce engagement

SE17
SE18

Workforce training and development

Non-retaliation and grievance systems

External stakeholder engagement

To progress external engagement an independent external stakeholder panel was convened
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
Early on-line survey to obtain feedback on Guidance, priority areas Second comment period / on-line survey on draft of revised Guidance

Broader engagement across industry

External stakeholder panel members

Tom Delfgaauw
Business

Louise Gardiner
International Finance Corporation

Roger Hammond
Living Earth

Elizabeth McGerveran / Karina Litvack

F&C Asset Management

Janet Ranganathan
World Resources Institute

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 places priority on process and has more external engagement (multi-stakeholder, consensus-seeking approach) IPIECA puts higher priority on technical content, precise definitions and protocols, and brings more industryspecific, technical expertise

Oil and Gas Sector Supplement expected late 2011

Will work cooperatively on mapping Guidance to the Oil and Gas Sector Supplement

Thank you

IPIECA the global oil and gas industry association for environmental and social issues www.ipieca.org

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