As ESG-focused activism continues to gain momentum, there is increasing pressure on oil and gas companies from investors to focus on ESG goals. But even though social and governance are an important part of the ESG movement, investors are more concerned about the environmental performance of oil and gas companies, according to Kaes Van’t Hof, CFO and executive vice president of business development of Diamondback Energy.
“When we talk about ESG, I think the ‘S’ and ‘G’ are important, but for oil and gas, it’s really about your environmental performance that drives a lot of the investor demand,” Van’t Hof said in an exclusive interview with Hart Energy’s Faiza Rizvi.
As a public operator in North America, the company’s social and environmental license to operate is based on operating in the most environmentally responsible manner, Van’t Hof noted.
“What we’ve done and realized over the last couple of years, is that first we studied what are our emissions, what do they look like and where are they coming from,” he said. “And we finally have enough data now to say here is the breakdown of Scope 1 emissions and here is how we can tackle them.”
Yet, despite significant efforts toward sustainable reporting and environmentally responsible oil and gas production, Van’t Hof said companies are often vilified by the administration that “doesn’t quite understand what we do.”
“The barrels produced by Diamondback, Conoco, Pioneer—all the Permian producers,” he continued, “are some of the most environmentally responsible barrels in the world…but I think that is sometimes lost on politicians who have a different mentality.”
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