When it comes to ESG, it’s important to remember the golden rule: “Whoever has the gold makes the rules.”
“ESG is part of being a U.S. public company, especially in the energy industry now, so embrace it and get on board,” said Hillary Holmes, partner in the Houston office of Gibson, Dunn & Crutcher LLP who also co-chairs the firm’s capital markets practice group.
Holmes recently sat down with Hart Energy’s Emily Patsy to discuss the ESG movement and what opportunities exist for oil and gas companies, including the emergence of sustainability bonds.
Despite its growing ubiquity, Holmes noted in the discussion that ESG is not a one-size-fits-all strategy but something that should be tailored to a particular company, situation, sub-sector, etc.
“It’s a very bespoke strategy with respect to each company,” she said. “I like to advise clients to just step back and instead of attacking ESG as a separate strategy from their business strategy, think about ways that ESG can be integrated into the business strategy to really add value.”
For some companies, Holmes said this approach could increase access to capital.
In particular, she noted the increase in capital raising she’s seeing tied to the “E” and “S” in ESG—the environmental and social aspects of the movement.
“Also investors are just demanding that companies pay attention to ESG and provide specific goals with respect to their ESG strategy and provide regular reporting on how they’re achieving those goals,” she said.
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- ESG strategies (0:40)
- Capital markets and ESG (2:25)
- Capital tied to ESG (4:25)
- Sustainability bonds (6:00)
- Energy and suitability bonds (10:20)
- Advice to oil producers (13:45)
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