To assist oil and gas companies with reporting on nonfinancial performance, the Oil & Gas Industry Guidance on Voluntary Sustainability Reporting was published in 2005 as a framework for improving the quality and consistency of voluntary sustainability reporting. The guidance was revised in 2010 and again in 2015. This paper discusses the value of sustainability reporting, the motivation behind the most recent update, and the changes made and provides an overview of social performance indicators in the third edition.

The Value of Sustainability Reporting
Oil and gas companies were among the earliest businesses to adopt sustainability reporting and, since it gained traction in the mid-1990s, have provided some leading examples of reporting practices. Key business drivers identified by companies in support of sustainability reporting include

• Enhanced business and brand value as investor and financial market confidence grows in response to evidence that the company is managing material risks and positioning itself to take advantage of emerging opportunities in the market
• Improved internal operations, recruitment, and morale as employees develop a clear understanding of the company’s sustainability imperatives and as the more systematic management of data, knowledge, and insight helps improve operational performance and decision-making—all serving to attract and retain employees and helping to secure long-term competitive advantage
• Strengthened relationships as local community leaders, civil society representatives, government officials and regulators, and other key stakeholders learn how the company responsibly manages sustainability issues
• Enhanced trust, credibility, and license to operate as customers, suppliers, and the wider society understand the company’s brand, operations, and products

Through communication on sustainability issues, a company’s report becomes a reliable source of information for its stakeholders. By transparently describing its biggest challenges, reporting underpins stakeholder engagement and represents the company’s values in action.

Oil & Gas Industry Guidance on Voluntary Sustainability Reporting
First and Second Editions. To help member companies develop or improve their sustainability reporting, IPIECA, the International Association of Oil and Gas Producers (IOGP), and the American Petroleum Institute (API) jointly published the Oil & Gas Industry Guidance on Voluntary Sustainability Reporting in April 2005. The document was produced to assist companies across the oil and gas industry in reporting on environmental, health and safety, social, and economic performance measures by providing sector-specific guidance. The aim of the document was to assist oil and gas companies in developing and enhancing the quality and consistency of their reports.

The publication was revised in 2010 with changes to improve the comparability of reports and help companies establish and communicate their strategic approaches to sustainability.

Changes to the Third Edition. The 2015 update was designed with the aim of preserving continuity with the previous edition and to facilitate implementation of improvements by minimizing changes to the overall structure and core content.

The third edition addresses feedback from subject-matter experts and improvements in reporting practices.

Key changes within the 2015 update include

• New guidance on strategic reporting for the industry’s most common sustainability issues to help companies report information on management approach and strategies beyond key performance indicators
• A new issue area on water, with comprehensive updates to two water indicators
• A new indicator covering planning and execution of decommissioning activities
• Alignment of the social and economic issues area with United Nations general principles (UNGPs)
• Upgrade of a range of reporting elements, reflecting improved maturity and consistency of reporting by companies
• Additional or improved reporting elements for nine of the existing indicators
• Unchanged since the first edition are the expressed principles that any company should keep in mind as it develops content for a sustainability report (i.e., the principles of relevance, transparency, consistency, completeness, and accuracy). While debates about sustainable development and society’s expectations of the oil and gas sector may change, these principles provide a foundation for how companies engage in reporting.

Changes to Social and Economic Indicators. The 2015 update reflects the ever-changing landscape of social responsibility reporting and expectations. Recent years have been characterized by an evolution in existing frameworks on voluntary sustainability reporting, the emergence of new voluntary initiatives, and mandatory sustainability reporting requirements in some countries. These varying expectations and different definitions of how and what companies should report have led to challenges for many oil and gas companies.

For this reason, IPIECA, API, and IOGP believe that it is essential to continue providing this robust industry-developed framework to help companies shape the structure and content of their sustainability reporting and better respond to the evolving expectations of society.

The UNGPs were a key development that motivated the update. Endorsed by the United Nations  in 2011, the UNGPs encompass the following three pillars outlining how states and business should implement the framework:

• The state duty to protect human rights
• The corporate responsibility to respect human rights
• Access to remedies for victims of business-related abuses

Aligning the document with the internationally accepted standards of the UNGPs was an important goal of the revision.

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