The OGA Strategy (“Strategy”) is clear that operators and licensees should develop good environmental, social and governance (“ESG”) practices in their plans and daily operations.
Furthermore the Strategy has introduced a new Governance supporting obligation which states that licensees of an offshore license must apply good and proper governance at all times, including complying with any governance principles and practices as the NSTA may from time to time direct.
In doing so, they will also meet investor requirements, as vital climate-related information will be included alongside other key metrics in oil and gas operators and licensees’ financial reports.
The NSTA is committed to actively promote the importance of ESG for investors, supporting clarity in ESG disclosure and reporting, and working with industry in the development of exemplar ESG practices.
Notes:
On 22 February 2024, the NSTA has written an open letter to licensees urging them to improve their ESG reporting to promote trust and encourage investment in the industry.
The letter identifies four current issues with ESG Data sharing between the participants of joint ventures which can result in some partners finding it difficult to comply with their ESG reporting obligations and suggests possible solutions. The letter can be viewed here.
On 31 March 2022, Joanne Edgeler, Head of Licensee Governance and ESG, NSTA and Chair, NSTA ESG Taskforce, sent an open letter to all licensees urging them to focus on high-quality ESG disclosure and reporting to demonstrate the UKCS is an attractive investment proposition for investors and lenders. This will assist in maintaining investor confidence in both oil & gas and the energy transition and provide continued access to financial capital. The letter can be viewed here.
On 13 January 2022 after an 8 week formal consultation the NSTA published its Governance Guidance and its response to the consultation. Both can be found here.
On 15 December 2022, the NSTA published its inaugural ESG Disclosure Report, which contained recommendations to help the oil and gas sector continue to attract investment. Read the report here.
