"The oil and gas sector aims to reduce its environmental impact through responsible practices, innovation, and commitment to sustainability for a greener future."
Why oil and gas?
The oil and gas industry is one of the most significant sectors globally due to its critical role in meeting the world’s energy demands. It plays a vital role in powering economies, industries, and transportation.
The oil and gas sector is also associated with significant environmental and social impacts. These include greenhouse gas emissions, air and water pollution, biodiversity loss, community displacement, and human rights concerns.
Given the industry’s influence and impact, it is essential for oil and gas companies to transparently disclose their sustainability performance and efforts to address these challenges.
The GRI Standards provide a framework for consistent and comparable reporting, enabling stakeholders to assess the Environmental, Social, and Governance (ESG) performance of oil and gas organizations.
Reporting on their sustainability practices, impacts, and commitments, the sector can enhance accountability, identify areas for improvement, and support the transition to a more sustainable energy future.
The significance of this Standard
- GRI 11: Oil and Gas Sector 2021 Standard addresses the need for consistent and complete reporting in the oil and gas sector.
- It facilitates disclosures related to the impacts of present-day operations and the transition to a low-carbon economy.
- The standard helps oil and gas organizations disclose their significant impacts on the Economy, Environment, and People.
- It supports companies of all sizes and specializations in effectively disclosing their most significant impacts.
- Stakeholders can use the disclosed information to assess a company’s sustainability opportunities and risks.
- The standard is effective for reporting from 1 January 2023 and is freely available for download.
- It is intended to be used alongside the revised GRI Universal Standards 2021 and the GRI Topic Standards.
- Early adoption of the standard is encouraged to promote transparency and sustainability in the oil and gas sector.
To what organizations does GRI 11 apply?
GRI 11: Oil and Gas Sector applies to all organizations operating within the oil and gas sector, irrespective of their location, specialism, or size.
This includes companies involved in activities such as:
- Supply equipment and services
- Transportation, and distribution of oil and gas products.
The standard is designed to provide guidance and a reporting framework specifically tailored to the unique environmental, social, and governance (ESG) challenges faced by organizations in the oil and gas sector.
The standard is applicable to both publicly traded and privately held companies, as well as state-owned enterprises within the sector. It encourages comprehensive and transparent reporting on the sector’s impacts, risks, and sustainability initiatives.
By using GRI 11, organizations in the oil and gas sector can effectively disclose their most significant impacts and provide the information that stakeholders require to assess their sustainability performance.
It is important to note that GRI 11 is intended to be used in conjunction with the revised GRI Universal Standards 2021 and the GRI Topic Standards, which provide a comprehensive framework for sustainability reporting across all sectors.
Oil and Gas Sector reporting standard supports
It has been shaped by various expectations and guidelines, including:
EITI (Extractive Industries Transparency Initiative): The EITI Standard promotes transparency and accountability in the extractive industries, including the oil and gas sector. GRI 11 aligns with EITI requirements to ensure consistent and complete reporting in line with the EITI framework.
TCFD (Task Force on Climate-related Financial Disclosures) recommendations: The TCFD provides guidance on climate-related financial disclosures. GRI 11 incorporates these recommendations to help oil and gas companies report on climate-related risks and opportunities.
Voluntary Principles on Security and Human Rights: These principles provide guidance to extractive industry companies on ensuring the protection of human rights, including the rights of local communities and indigenous peoples. GRI 11 considers these principles in reporting the sector’s impacts on security and human rights.
UN Declaration on the Rights of Indigenous Peoples: The UN Declaration sets out the rights of indigenous peoples and emphasizes the need for their free, prior, and informed consent in relation to projects that may affect their lands or resources. GRI 11 recognizes the importance of indigenous peoples’ rights and includes reporting requirements to address their concerns.
It enhance transparency, accountability, and responsible practices within the oil and gas sector, ensuring that companies report on key sustainability issues in line with internationally recognized standards.
Difference between GRI & SASB’s oil and gas standards?
GRI’s and SASB’s (Sustainability Accounting Standards Board) Oil and Gas Standards are two distinct frameworks for sustainability reporting in the oil and gas industry. While both frameworks aim to enhance transparency and accountability, there are notable differences between them:
Scope and Coverage:
- GRI uses sector-specific standard that provides comprehensive guidance for reporting on environmental, social, and governance (ESG) issues specific to the oil and gas sector. It covers a broad range of topics, including climate change, water management, human rights, community engagement, and more.
- SASB’s standards are industry-specific and focus on financially material sustainability topics that are most relevant to investors. The SASB Oil and Gas Standards primarily address financially material ESG issues related to operational performance, environmental impacts, and social capital considerations.
- GRI Standards framework, which is widely used and recognized globally for sustainability reporting. It provides a comprehensive structure for reporting on a wide range of topics, allowing for flexibility in reporting practices.
- SASB follows a standardized approach specifically designed for financial reporting to investors. The standards focus on material issues that are financially relevant to the industry and provide industry-specific metrics and disclosure guidance.
- GRI is designed to address the reporting needs of a broader set of stakeholders, including investors, regulators, communities, employees, and NGOs, who are interested in a comprehensive view of an organization’s sustainability performance.
- SASB’s standards are primarily aimed at investors and financial analysts who seek standardized and comparable ESG information to integrate into their investment decision-making process
GRI Sector Program
The GRI Sector Program is an initiative by the Global Reporting Initiative (GRI) to provide sector-specific guidance and reporting frameworks for organizations operating in various sectors. The program recognizes that different sectors have unique activities and impacts on the economy, environment, and society.
By developing sector-specific reporting standards, the GRI Sector Program aims to promote more consistent and standardized reporting practices within each sector. This enhances transparency and accountability by ensuring that organizations disclose the most relevant and material information related to their sector-specific impacts.
The program facilitates targeted action and decision-making by organizations, enabling them to better understand and address the key sustainability challenges and opportunities within their sectors. It also helps stakeholders, including investors, customers, and communities, to gain a clearer understanding of the sector’s overall sustainability performance.
Ultimately, the GRI Sector Program seeks to improve the impacts of organizations within each sector, promote sustainable development, and drive positive change by providing sector-specific guidance and reporting frameworks.
In total The GRI Sector Program will develop standards for 40 sectors, starting with those that have the highest impact.