Building Sustainable Operations in the Energy Industry

By Marie Merle Caekebeke, Schlumberger

Each company contributing to the exploration and production value chain plays a role in achieving sustainable operations.

This means adopting a triple bottom line approach to evaluate the social, environmental, and financial impact of key decisions in the aim of creating greater business value while, at the same time, positively contributing to communities and the planet.

With addressing climate change at the forefront of many discussions across our stakeholders, let us take a deep dive into what supporting Sustainable Development Goal 13 Climate Action looks like — from setting ambitious, measurable goals; to holding yourself accountable by embedding sustainability objectives and ambitions throughout a company’s operations; to empowering local teams to what is locally relevant; all while increasing transparency in reporting ESG performance.

ADDRESSING CLIMATE CHANGE: In Our Operations

Contributing to SDG 13 means learning to better manage our respective environmental footprint, including emissions, throughout the life cycle of planning decisions, such as properly managing purchased goods and services, logistics, facilities, operations and, ultimately, technology and services sold to customers. Taking this comprehensive approach supports a transformational change aimed at reducing our industry’s footprint. This requires being resilient and adaptable, mitigating emissions and climate-related risks, identifying and capturing climate opportunities, and embedding a focus on emissions within your corporate strategy.

Measurable, realistic goals pointing to long-term results while incorporating interim targets along the way holds companies accountable so they can truly make progress in this space. Publicly stating these goals and sharing defined metrics and the progress made demonstrates a company’s strong commitment to act.

Schlumberger takes a whole value chain approach to reviewing our direct and indirect emissions, setting both long-term and interim targets as part of our approach. To start, we set a near-term target of reducing 30% of our Scope 1 and 2 emissions by 2025 (2019 baseline). To build a medium-term target with tangible deliverables, in 2019 Schlumberger became the first company in upstream E&P services to commit to setting a science-based target in emissions reduction.

As part of this commitment, we broadened the breadth of our greenhouse gas inventory, with particular focus on Scope 3. This included technology use-phase emissions, in line with criteria defined by the Science Based Targets initiative and the Greenhouse Gas Protocol. Including Scope 3 emissions in our assessment enables Schlumberger to better quantify the impact of our technology during the use-phase and highlight any impact reducing opportunities to help our customers reduce their footprint in addition to ours. In support of these efforts, our Scope 1 and 2 emissions reduction target was incorporated into the 2020 annual cash incentive opportunity for our CEO and other members of senior management.

To assess possible financial risks associated with climate change, key frameworks like the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) are a great place to start. These frameworks can help companies identify and mitigate climate-related risks while capitalizing on climate-related opportunities to benefit both the planet and communities around the world. This might include assessing a company’s operations for both acute and chronic physical climate risks, as well as those associated with the energy transition; and identifying opportunities such as applying technologies with a reduced environmental impact or expanding beyond oil and gas.

ADDRESSING CLIMATE CHANGE: In Customer Operations

Service companies tend to have a much smaller fuel and power consumption footprint than operators with large midstream and downstream operations—resulting in our sector having a strong opportunity to influence environmental performance well beyond our own footprint. The products and services we provide can help our customers meet their environmental priorities.

To lessen the use-phase emissions of our technology and support our customers in addressing their environmental priorities, Schlumberger currently offers a broad technology portfolio of more than 100 solutions with attributes that tie to the six environmental SDGs. Our technologies include environmental impact reducing options aimed at: consuming fewer resources including energy, water, raw materials, and physical footprint; generating fewer harmful byproducts, including emissions and waste; leveraging digital; and enabling renewable energy use.

With our industry changing, it is important to recognize that meeting expected global energy demand will require a combination of sources — from hydrocarbons to renewables. Contributing to the energy transition by changing existing practices and by reviewing opportunities and expanding beyond oil and gas is a strong way to reduce environmental impact while supporting local communities and business goals.

In 2020, we launched Schlumberger New Energy to explore new businesses in low-carbon or carbon-neutral energy technologies, applying our domain expertise in areas adjacent to our existing activities and using our global footprint and execution platform to deliver at scale. Included in these businesses are hydrogen, lithium, carbon capture and storage, geothermal, and geoenergy.

ALIGNING ON ESG PRIORITIES

To strengthen the impact of our collective actions and to measure the environmental, social, and governance (ESG) progress achieved, alignment using key frameworks like the United Nations Sustainable Development Goals (SDGs), is helpful. Mapping the Oil and Gas Industry to the Sustainable Development Goals: An Atlas published in 2017 by IPIECA, the United Nations Development Programme (UNDP), and the International Finance Corporation (IFC), and Accelerating action–An SDG Roadmap for the oil and gas sector, published in 2021 by IPIECA and the World Business Council for Sustainable Development (WBCSD) are strong resources companies can leverage to implement best practices and guidance across our industry, enabling them to prioritize key sustainability topics in line with country and business priorities.

Achieving the SDGs and ambitions of the Paris Agreement hinges on collaboration and sharing of best practices. We must commit to working together to evolve our industry to a more responsible tomorrow.

FURTHER READING

https://assets.bbhub.io/company/sites/60/2020/10/FINAL-2017-TCFD-Report-11052018.pdf

https://www.ipieca.org/our-work/sustainability/supporting-the-sdgs/sdg-roadmap/

Marie Merle Caekebeke is the Director of ESG Performance & Engagement for Schlumberger. Based in Houston, she works closely with industry entities to develop and implement environmental and social sustainability standards while creating long-term stakeholder value.