Even though demand destruction and oversupply has threatened bankruptcies for many U.S. oil and gas companies, increased focus on environmental, social and governance (ESG) activities could offer some relief to energy companies in the upcoming months.

Several ESG-focused factors, including the safety of workforce, supply-chain diversity and community impact have been key to the survival of companies during the market downturn, said corporate partners at law firm Winston & Strawn LLP, Eric Johnson and Michael J. Blankenship, in a recent article in Lexology.

“Certainly, there is going to be pain in the short term because the balance sheets are not where they need to be,” Johnson told Hart Energy, adding companies will need to recalibrate their financial structure by reducing debt and improving asset bases, both in size and quality.

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