Integrating the SDGs in Extractive Industry Company Strategies April 2018
CCSI has been working at 3 levels Sector Corporate Oil & Gas Major from Europe Gold/copper project in Chile Project Oil & gas operations in country
OIL AND GAS INDUSTRY DEVELOPMENT GOALS TO THE SUSTAINABLE MAPPING THE EXECUTIVE SUMMARY | ix KEY ISSUE AREAS FOR OIL AND GAS MAPPED TO THE SDGs Corporate level: Map activities, strategy & incentives to the SDGs Analyze and Map Framework S Activities D i a G l o o g t v u n Community Engagement e e Sustainable Energy e r m n & Climate Change Alignment of Activities m p C e o Energy Access o l n o e t v Shared-Use Infrastructure r e C d a i D n Anti-Corruption p a S Strategic business plan a t l a e i g c o c n i t o a y n L Human Rights h C s n t Ecosystem Management e e t m a s m s e l i s s C A t M Worker & Community Protection c i a t i p g a m t I i o h n t H Road Safety l Biodiversity Ofgsets i e a e H r a r c h y A c c i d e n t P r e v Local Content Strategy e n t i o n S Operational guidelines & R e s Environmental Assessments p o n Workforce Education s e O c e a n A c i d i fj c a t i Technology Training o n M n i i m i z a t i o n Gender-Sensitive Policies Resilience & Adaptive C a p a c i t y Emissions Mitigation I n c l u s i v e D e c i s i o n - M a k i n g Strategic Planning W o m S Incentives e n ’ s E m p l o y m e n t O p p o r t u n i t i e s Water Strategy n t m e e a g a n M y Water Use Effjciency e i t s t b i l W a a t i n e n Product Stewardship t a Water Risk Management c i s E ffj S u n a i h C y p l u p S Natural Gas n o t i c Energy Effjciency Key performance indicators (KPIs) Operational Risk Assessment e t S o P r n A l e o t g i e a a t n r t r i z a e n i Impact Assessments t H a Skills Assessment v i e a l b Transparency Local Employment r r Engagement W E u U n a t Technology Transfer e N e Shared Use Infrastructure S o r l u r g & b k i a s f e a l n t o s r i a u a i r t t n c u l s a e C u S b & l e S I u n p f CEO sustainability guidelines r p a l S s i e t r r u D c e t u v e r e l o p m e n t Management by Objectives Assessments S Source: IPIECA, IFC, UNDP K P I
Corporate level: Gap analysis based on priorities for an energy company primarily operating in Africa 1. At the core of an energy company operating in a world that needs to decarbonize 2. Managing operations: safe and decent conditions for workers and impacted communities 3. Managing operations: Mitigating environmental impacts 4. Supporting host governments, particularly in institutionally weak countries Activities, KPIs, incentive systems, corporate governance should all align with and reflect these SDG priorities
Corporate level: Mapping according to materiality By materiality across value-chain ? Biofuels !
Project level: Align to Provincial Development Priorities S Background: S Project to make up 60% of GDP of province S Infrastructure to run through 4 municipalities S Significant impacts on infrastructure, housing and services expected during construction phase S Few job opportunities during operations S Previous large-scale projects stopped due to social opposition S Opportunity: S Help the Municipalities to create a long-term development plan that takes into account the impacts of the mining investment S Localize the SDG framework in development plan S Align company’s interventions and incentive mechanisms to development plan S Help secure social license to operate
�+�+T+ �+�+T+ 66.3 71.4 88.7 84.5 66 US$ 38,362 67.3 SDG 100 77.7 66.0 US$ 22,197 27/149 31/134 34/157 52/155 23/133 67.1 75 44 (OF 157) SDG 11 SDG 12 SDG 13 SDG 14 15 50 SDG 16 SDG 17 SDG 1 SDG 25 47/153 84.7 71.6 SDG 9 SDG 8 SDG 7 SDG 6 5 COMPARISON WITH OTHER DEVELOPMENT METRICS SDG 4 SDG 3 SDG 2 AVERAGE PERFORMANCE BY SDG Chile OVERALL PERFORMANCE SDG DASHBOARD 10 REGIONAL AVERAGE CHILE Global Peace Index (2016) Global Competitiveness Index (2016/17) Human Development Index (2016) Environmental Performance Index (2016) Subjective Wellbeing (2016) GDP per capita, PPP (2015) SCORE OR VALUE Index score GLOBAL RANK 77.7 OECD Countries 82 Global Responsibilities SDG Index and Dashboards Report 2017 SDG Global rank Regional average score SDG Project level: Baseline assessment SDG Dashboard Chile SDG performance based on available statistics in region Commune 1 Commune 2 Commune 3 Commune 4 Province Region Chile SDG 1 SDG 2 SDG 3 SDG 4 SDG 5 SDG 6 SDG 7 SDG 8 SDG 9 SDG 15 SDG 16 Opportunity to help with data collection during HESIA & setting up monitoring system for development plan
Project level: Localizing the SDGs Introduce SDGs: Set the local SDG by resources 1. 2. Inclusive and agenda: Ambitious yet Monitor progress: 4. participatory process realistic Collecting the right to prioritize Plan for data is key 3. development implementation: Goal- outcomes based targets backed Example
Relevant findings for ESG investing SDG framework is data driven, so ESG investors will have more S reference points. There is a tradeoff between data collection that is S Sector standardized/comparable vs. useful for context specific development planning/monitoring At the corporate level the incentive structure & allocation of S budget provide good insights of what companies prioritize. Not necessarily # of initiatives or what is reported There is a need to account for company lobbying in ESG S Corporate matrices At the project level there is a big opportunity of large-scale S investments to work with local authorities to localize the SDGs Company interventions should align to local development S priorities. Need to think of ways how to account for that in ESG matrices. Project At the local level it becomes easier to measure the impacts of a S project on the SDGs
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