The 12 Pillars model of ESG: bringing practical clarity to ESG across the Australian gas industry

Abstract

The rise of Environmental, Social and Governance (ESG) standards and the immense global challenges it brings are shaping the way we do business now and into the future. The elements of ESG are broad, dynamic and not always easily understood. There is no set definition of ESG nor a one-size-fits-all approach. This has resulted in piecemeal, fragmented and reactive initiatives implemented across strategy development, implementation, reporting and compliance. The lack of clearly defined, unified ESG approaches across the supply chain can often complicate investment, procurement, as well as government, shareholder and community relations. It is well known within the Australian gas industry that proactively and pragmatically addressing ESG concerns is pivotal to our position in the future energy mix, and a strategic focussed approach is required. This paper attempts to ‘cut through the noise’ and provide clarity around the ESG expectations being placed on the industry. We put forward a simple 12 Pillars model which can be used by all parts of the gas supply chain to improve the application of ESG principles to business operations. We delve into how each of these factors can be addressed across business operations using the 12 Pillars model. We consider the current opportunities under each pillar to aid a strategic and consistent approach by the industry, whilst being broad enough to be fluid as the industry faces future ESG challenges. This model could also underpin a standardised ESG mechanism for the industry, something that offers real benefits when it comes to monitoring and reporting.