Environment

Social Capital

  • Human Rights & Community Relations
  • Customer Privacy
  • Data Security
  • Access & Affordability
  • Product Quality & Safety
  • Customer Welfare
  • Selling Practices & Product Labeling

Business Model & Innovation

  • Product Design & Lifecycle Management
  • Business Model Resilience
  • Supply Chain Management
  • Materials Sourcing & Efficiency
  • Physical Impacts of Climate Change

Leadership & Governance

General Issue Category
(industry agnostic)

Disclosure Topics (industry specific) for:
Oil & Gas – Services

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GHG Emissions

Emissions Reduction Services & Fuels Management

While direct greenhouse gas (GHG) emissions and associated regulatory risks are relatively low for oil and gas services providers relative to other industries, emissions from the operations of their customers—the oil and gas exploration and production (E&P) companies—can be significant. Emissions include GHGs that can contribute to climate change as well as other air pollutants that can have significant localized human health and environmental impacts. Increasing regulation and high costs of fuels associated with these emissions present substantial risk to E&P companies. This is driving companies to seek ways to lower their emissions, including converting pumps and engines to run on natural gas instead of diesel fuel. Oil and gas services companies compete for contracts with E&P companies partly on the basis of providing cutting-edge, efficient technologies that can help customers reduce costs and improve process efficiencies. Services companies can gain a competitive advantage and protect their revenues and market share by providing customers with services and equipment that reduce the emissions and fuel consumption of E&P activities, and by capturing saleable gas that may otherwise be flared or escape through leaks.

Water & Wastewater Management

Water Management Services

Oil and gas development often requires large quantities of water, exposing producers to the risk of reduced water availability, regulations limiting usage, or related cost increases, particularly in water-stressed regions. Producers also face risks and costs associated with wastewater disposal. As such, companies that provide these oil and gas producers with services have developed technologies and processes such as closed-loop water recycling systems to reduce customers’ water consumption and disposal costs. These offerings provide service companies the potential to gain market share and increase revenues, as management of drilling and wastewater can be a significant competitive factor for their customers.

Waste & Hazardous Materials Management

Chemicals Management

Oil and Gas - Services companies produce oilfield chemicals as well as drilling and hydraulic fracturing fluids based on demand from Exploration & Production (E&P) companies. While the risk of leaks from a properly drilled and completed well is low, contamination of local water resources can result from contact with hydraulic fracturing fluids and produced water, and may arise from issues related to well integrity. Concerns about certain chemicals used in hydraulic fracturing fluids have led to fracturing bans, regulation, and legislative proposals to mandate disclosure of chemicals used in some regions, both in the U.S. and abroad. The exact chemical composition of hydraulic fracturing fluids is often proprietary information, and companies compete to create the most effective formulas. In the U.S., some companies are voluntarily disclosing information about the hydraulic fracturing chemicals they use through an industry registry, FracFocus. Due to public and regulatory attention to the potential hazards of drilling fluids, companies that are able to manage issues related to well development and integrity, the production and use of produce effective non-hazardous fracking fluids, and the reduction of the volumes of drilling fluids used per well, may increase their market share and revenues and lower the risk that regulations affect demand for their products.

Ecological Impacts

Ecological Impact Management

Oil and gas exploration and development activities, and associated services and support activities, can have significant impacts on biodiversity and ecosystems, particularly when companies operate in ecologically sensitive areas or are characterized by highly resource-intensive operations. These can occur through disposal of drilling and associated wastes, well decommissioning, land use, and fuel spills. Producers face regulatory risks from legislation and permitting to protect ecosystems in the U.S. and abroad, and from regulations specifically related to well decommissioning or underground waste injection. Oil and gas services companies that are able to offer cost-effective and efficient production and decommissioning technologies that mitigate impacts on biodiversity by reducing land use, drilling wastes, and spills can lower associated risks for their customers and gain a competitive advantage.

Employee Health & Safety

Workforce Health & Safety

Workers in the  industry face significant health and safety risks due to the harsh working environments and hazards of handling oil and gas. In addition to acute impacts resulting from accidents, workers may develop chronic health conditions, including those caused by silica or dust inhalation, as well as mental health problems. A significant proportion of the workforce at oil and gas drilling sites consists of temporary workers and employees of oil and gas services companies. Health impacts on, and the safety performance of, such workers can affect Services companies directly by influencing worker productivity and costs. Services companies compete on the basis of their reputation and ability to perform activities on a consistently safe basis. Customers evaluate instances of accidents, spills, injuries, and fatalities when considering awarding contracts to services companies.

Business Ethics

Business Ethics & Payments Transparency

With operations across the globe, oil and gas services companies interact with many government and local officials, either directly or through agents, in order to secure contracts with state-owned oil companies and multinational corporations. Bribery and corruption are common in some regions, and in others, to the transparency of payments to governments may be a significant issue. The emergence of several anti-corruption, anti-bribery, and payments-transparency laws and initiatives create regulatory mechanisms to reduce certain risks. Violations of these could lead to significant one-time costs or higher ongoing compliance costs, whereas successful compliance with such regulations could provide risk mitigation opportunities and avoid adverse outcomes. Oil and gas services companies are under pressure to ensure that their governance structures and practices can address corruption, willful or unintentional participation in illegal or unethical payments and gifts to government officials or private persons, or the risk of otherwise unfairly influencing these individuals, especially in areas of heightened risk.

Management of the Legal & Regulatory Environment

Management of the Legal & Regulatory Environment

The  industry is subject to numerous sustainability-related regulations and an often rapidly changing regulatory environment. Changes to the legal and regulatory environment may result in material impacts on shareholder value. Companies in the industry regularly participate in the regulatory and legislative process on a wide variety of environmental and societal issues, and may do so directly or through representation by an industry association. Such engagement can result from companies seeking to ensure industry views are represented in the development of regulations impacting the industry as well as to represent shareholder interests. At the same time, such engagement to influence environmental laws and regulations may adversely affect companies’ reputations with stakeholders and ultimately impact the company’s social license to operate. Companies that are able to balance these viewpoints may be better positioned to respond to medium- to long-term regulatory developments.

Critical Incident Risk Management

Critical Incident Risk Management

Services companies are subject to significant risks associated with low-probability, high-consequence events associated with oil and gas exploration, development, and production activities. Such events may result in multiple fatalities, significant property damage, or a significant adverse impact to the environment. Services companies may be affected indirectly through the impacts that safety incidents or emergencies can have on their Exploration & Production (E&P) customers. Additionally, significant incidents can have wide-ranging negative social and environmental consequences, for which both E&P and service companies may be held liable. Services companies compete on the basis of their reputation and ability to perform activities on a consistently safe basis. In addition to implementing effective process safety management practices, companies frequently prioritize developing a strong culture of safety in order to reduce the probability that accidents and other health and safety incidents will occur. If accidents and other emergencies do occur, companies with a strong safety culture are often able to more effectively detect and respond to such incidents. A culture that engages and empowers employees and contractors to work with management and E&P companies in order to safeguard their own health, safety, and well-being and to prevent accidents is likely to help services companies reduce risks to financial value.

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