The Edison Electric Institute and the American Gas Association announced Nov. 12 that they have integrated the gas-specific metrics into an existing electric utility sustainability template, the first version of which came out in August. The template encourages voluntary reporting on a variety of environmental, social and governance — collectively, ESG — factors to give investors a greater understanding of how companies are managing key risks and responsibilities.
Having a uniform format allows investors and the public to compare companies on an even playing field.
"Working with our members, we developed metrics tailored to our sector and incorporated input from investors and stakeholders," Dave McCurdy, AGA's president and CEO, said in a Nov. 12 statement. "Natural gas utilities have a strong track record of success with voluntary initiatives in the areas of safety and sustainability, and we anticipate a similar robust participation in this new ESG initiative."
The natural gas distribution companies participating in the reporting template will publish their 2017 data in the coming weeks and months, according to the Nov. 12 announcement from the EEI and AGA. The groups said they will keep refining the metrics, aiming to fully incorporate the gas metrics into a second version of the template in mid-2019 that would contain 2018 data.
Gas utilities have already been increasing their transparency in response to investor concerns, particularly on methane emissions. Shareholder resolutions have increasingly targeted energy companies for their emissions, and some utilities have worked with their investors to avoid or resolve major actions.
Still, shareholder advocates have pushed for more systematic reporting. The advocacy group As You Sow said in July that inconsistencies in companies' management practices and reporting methods can make it challenging for investors to get a clear idea of what kinds of emissions risks these companies are exposing themselves to.
The EEI and AGA said they are committed to working with gas suppliers and producers to push for greater sustainability practices and improved reporting across the whole natural gas supply chain. "AGA's new ESG metrics build on the excellent work of EEI and will provide simple, transparent voluntary sustainability reporting for natural gas distribution, transmission, storage, gathering and boosting operations," McCurdy said.