Here To Stay: Why ESG Initiatives Can Create Long-Term Value

Environmental, Social, and Governance (ESG) or sustainability refers to corporate activities that would maintain or enhance the ability of a company to create value over the long term. This includes both the financial and non-financial aspects of a business.

With nearly 20 years of experience in transaction advisory, technical accounting and SEC reporting, Amy Stutzman, Managing Director at Opportune LLP has a wealth of expertise when it comes to ESG initiatives in the oil and gas industry.

“We’re talking about environment, human capital, social capital, innovation, leadership, governance, those types of initiatives. And a sustainable business strategy would be a company’s plan to improve performance along those initiatives and create value over the long term,” Stutzman says.

So, why is ESG important to the oil and gas industry? Stutzman explains that contrary to popular belief, the industry is making major investments in renewables and green energy initiatives. But this doesn’t mean that oil and gas is going away anytime soon.

“I don’t think sustainability excludes the continued development of fossil fuels,” Stutzman says. “I think ESG is an opportunity for our industry to tell their story. It’s important to tell that story because there’s been a shift in the investment community and ESG impacts access to capital, more than it ever has before.”

As we head into 2021, it’s likely that we’ll see more energy companies tell their ESG story by continuing to make investments in renewables and green energy initiatives, natural gas and a focus on net-zero emission targets. A new Biden administration will also certainly impact ESG and sustainability programs going forward.

“I think it’s clear that ESG is here to stay and I think it will continue to become an ever-increasing part of the conversation that companies are having with their investors,” Stutzman says.