The EIC and Midstream Energy Companies Embrace Standardized ESG Reporting
At the Energy Infrastructure Council (“EIC”), a trade association representing traditional and renewable energy infrastructure companies, environmental, social and governance (“ESG”) reporting has become a core part of our mission. As we work to support and advance ESG initiatives at member companies, and across the midstream industry, we are proud to report that in December 2020, the EIC, in collaboration with GPA Midstream, released the first Midstream Environmental, Social and Governance (ESG) Reporting Template (“Template”).
The release of the Template follows successful efforts from other sectors to produce industry-focused ESG reporting frameworks that provide investors and other stakeholders with standardized quantitative, consistent sustainability performance data. The Template, which is intended for voluntary use by midstream companies whether or not members of EIC and/or GPA Midstream, includes metrics related to emissions, asset diversification, workforce diversity, and executive compensation, among others.
EIC member companies are embracing the growing importance of ESG reporting and many already provide detailed information on their ESG activities. Yet the rapidly evolving ESG landscape has resulted in disparate reporting that can make it difficult for investors and other stakeholders to get an accurate picture of a company’s ESG activities and year-over-year progress, and therefore to assess performance and make informed decisions. Recognizing these challenges, the EIC ESG Working Group, established in 2019 to provide dedicated support to EIC member companies on their ESG journeys, undertook to develop the Template.
The highly collaborative Template development process involved member companies from EIC and GPA Midstream, including in-house ESG specialists and professionals with operational and technical expertise, and numerous investors. The process was informed by an extensive review of best-practice ESG reporting among EIC member companies, organizations involved in development of ESG reporting frameworks (e.g., TCFD, SASB, CDP), companies engaged in ESG reporting and/or ratings (e.g., MSCI, Sustainalytics, Bloomberg, S&P), proxy voting service firms (e.g., ISS, Glass Lewis), and other energy groups and associations (e.g., EEI, AGA, ONE Future).
The Template is designed to provide a baseline level of standardized ESG data from which future iterations can evolve. Since its release, many EIC and/or GPA Midstream member companies have committed to populating and publishing the Template. EIC and GPA Midstream are committed to working toward widespread company and investor ESG adoption, and to promoting alignment between the Template and the most important ESG standard setters and rating agencies on which investors rely.
To learn more, visit www.eic.energy/esg.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.