MIDLAND, Texas — ESG is a term used to represent the sustainable and ethical impacts of a company.
This includes things like a company's carbon footprint, impact on the environment and even workforce diversity, and there has been a big push for companies to have a good score.
There is no one group who hands out these ratings.
Several organizations give them out, and a bad score can mean bad publicity.
While the Permian Basin Petroleum Association believes it is a good system, they said oil and gas companies here have already been following their own internal, similar regulations for years.
The association says there has been some recent pushes for companies to have a good ESG score no matter what, and they believe this can have a negative impact.
“So that's where you see an impact is on the investment side of the industry," said Stephen Robertson, Executive Vice President of the PBPA. "And as we've all been able to experience, there's a lot of growth occurring out here. But to be able to continue to grow, there has to be continual investment of capital, and so if the capital markets are constrained, because lenders don't want to lend to companies because this fear of an ESG metric score, then that could affect opportunities out here in the Permian Basin.”
Though, none of this means that companies don’t care about all the things that ESG regulations cover.
“Can we do things better tomorrow than yesterday? Absolutely," said Robertson. "I hope to say the same thing tomorrow and the day after that. We should always continue to improve the way we are doing things, and I think in an industry full of scientists and full of engineers that’s what they’re trying to do every single day.”