The oil and gas industry must improve reporting of climate change impacts or risk losing its social licence, the regulator said today.
From 2023, operators onshore and offshore must include figures in their financial reports of fugitive emissions and emissions from flaring and venting .
They will also be required to provide information on air and water pollution risks, waste management and carbon intensity.
The figures should also include direct emissions from their operations and indirect emissions created from the consumption of purchased electricity, heat or steam.
The changes were previously announced by the government. This afternoon the industry regulator, the Oil & Gas Authority, published recommendations to help companies comply.
The OGA said it formed the taskforce an environmental, social and governance taskforce last year when:
“it became clear from engagement with the investor community – which is itself coming under pressure to play a greater role in supporting low-carbon business – that there was a gap between investor expectations and what was actually being reported”.
It said companies should provide quantitative and qualitative information and that disclosure should be encouraged and improve over time.
Tom Wheeler, the director of regulation at the OGA, said:
“Some members of the oil and gas industry are already improving ESG [environmental, social and governance] reporting, but the industry as a whole must pick up the pace or risk losing not only its social licence to operate, but also the support of the investment community.
“The OGA has revised its Strategy to incorporate supporting the industry in its drive to reach net zero greenhouse gas emissions by 2050, and this reporting initiative is an important stepping-stone in that.”