Oil & Gas – Midstream
Relevant Issues (5 of 26)
Why are some issues greyed out?
The SASB Standards vary by industry based on the different sustainability-related risks and opportunities within an industry. The issues in grey were not identified during the standard-setting process as the most likely to be useful to investors, so they are not included in the Standard. Over time, as the ISSB continues to receive market feedback, some issues may be added or removed from the Standard. Each company determines which sustainability-related risks and opportunities are relevant to its business. The Standard is designed for the typical company in an industry, but individual companies may choose to report on different sustainability-related risks and opportunities based on their unique business model.-
Environment
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GHG Emissions
The category addresses direct (Scope 1) greenhouse gas (GHG) emissions that a company generates through its operations. This includes GHG emissions from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes), whether a result of combustion of fuel or non-combusted direct releases during activities such as natural resource extraction, power generation, land use, or biogenic processes. The category further includes management of regulatory risks, environmental compliance, and reputational risks and opportunities, as they related to direct GHG emissions. The seven GHGs covered under the Kyoto Protocol are included within the category—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3). -
Air Quality
The category addresses management of air quality impacts resulting from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes) as well as industrial emissions. Relevant airborne pollutants include, but are not limited to, oxides of nitrogen (NOx), oxides of sulfur (SOx), volatile organic compounds (VOCs), heavy metals, particulate matter, and chlorofluorocarbons. The category does not include GHG emissions, which are addressed in a separate category. - Energy Management
- Water & Wastewater Management
- Waste & Hazardous Materials Management
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Ecological Impacts
The category addresses management of the company’s impacts on ecosystems and biodiversity through activities including, but not limited to, land use for exploration, natural resource extraction, and cultivation, as well as project development, construction, and siting. The impacts include, but are not limited to, biodiversity loss, habitat destruction, and deforestation at all stages – planning, land acquisition, permitting, development, operations, and site remediation. The category does not cover impacts of climate change on ecosystems and biodiversity.
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Social Capital
- Human Rights & Community Relations
- Customer Privacy
- Data Security
- Access & Affordability
- Product Quality & Safety
- Customer Welfare
- Selling Practices & Product Labeling
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Human Capital
- Labor Practices
- Employee Health & Safety
- Employee Engagement, Diversity & Inclusion
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Business Model and Innovation
- Product Design & Lifecycle Management
- Business Model Resilience
- Supply Chain Management
- Materials Sourcing & Efficiency
- Physical Impacts of Climate Change
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Leadership and Governance
- Business Ethics
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Competitive Behavior
The category covers social issues associated with existence of monopolies, which may include, but are not limited to, excessive prices, poor quality of service, and inefficiencies. It addresses a company’s management of legal and social expectation around monopolistic and anti-competitive practices, including issues related to bargaining power, collusion, price fixing or manipulation, and protection of patents and intellectual property (IP). - Management of the Legal & Regulatory Environment
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Critical Incident Risk Management
The category addresses the company’s use of management systems and scenario planning to identify, understand, and prevent or minimize the occurrence of low-probability, high-impact accidents and emergencies with significant potential environmental and social externalities. It relates to the culture of safety at a company, its relevant safety management systems and technological controls, the potential human, environmental, and social implications of such events occurring, and the long-term effects to an organization, its workers, and society should these events occur. - Systemic Risk Management
Disclosure Topics
What is the relationship between General Issue Category and Disclosure Topics?
The General Issue Category is an industry-agnostic version of the Disclosure Topics that appear in each SASB Standard. Disclosure topics represent the industry-specific impacts of General Issue Categories. The industry-specific Disclosure Topics ensure each SASB Standard is tailored to the industry, while the General Issue Categories enable comparability across industries. For example, Health & Nutrition is a disclosure topic in the Non-Alcoholic Beverages industry, representing an industry-specific measure of the general issue of Customer Welfare. The issue of Customer Welfare, however, manifests as the Counterfeit Drugs disclosure topic in the Biotechnology & Pharmaceuticals industry.
General Issue Category
(Industry agnostic)
(Industry agnostic)
Disclosure Topics (Industry specific) for: Oil & Gas – Midstream
GHG Emissions
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Greenhouse Gas Emissions
The midstream industry generates significant greenhouse gases and other air emissions from compressor engine exhausts, oil and condensate tank vents, natural gas processing, and fugitive emissions, in addition to emissions from mobile sources. GHG emissions contribute to climate change and create incremental regulatory compliance costs and risks for midstream entities. At the same time, the management of methane fugitive emissions has emerged as a significant operational, reputational and regulatory risk. Financial effects on entities will vary depending on the specific location of operations and prevailing emissions regulations, and they include increased operating or capital expenditures and regulatory or legal penalties. Entities that capture and monetise emissions, or cost-effectively reduce emissions by implementing innovative monitoring and mitigation efforts and fuel efficiency measures, may enjoy substantial financial benefits. Entities can reduce regulatory risks and realise operational efficiencies as regulatory and public concerns about air quality and climate change increase.
Air Quality
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Air Quality
Air emissions from midstream entities include hazardous air pollutants, criteria air pollutants, and volatile organic compounds (VOCs), which can have significant, localised human health and environmental impacts. Of particular concern are sulphur dioxide, nitrogen dioxide, and VOC emissions. The financial impacts on entities from air emissions will vary depending on the specific locations of operations and the prevailing air emissions regulations. Active management of the issue—through technological and process improvements—could allow entities to limit the impact of regulations in an environment of increasing regulatory and public concerns about air quality. Entities could benefit from operational efficiencies that could lead to a lower cost structure over time.
Ecological Impacts
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Ecological Impacts
The storage and transport of crude oil, natural gas, and related products through a vast system of maritime transportation vehicles, pipelines, trains, and trucks presents considerable risk to the environment and to local communities. Leaks, accidental discharges, pipeline rights-of-way, and open easements over ecologically sensitive land could impact ecosystems in several ways, including natural habitat loss and changes in species movement. Regulatory agencies, supported by legislation that protects endangered species and ecologically sensitive areas, require plans to mitigate or remediate negative ecological impacts prior to project approval. Together with regulatory compliance costs, these can require significant capital and operational expenditures. As concerns over ecological impacts grow, entities could face the risk that additional areas are designated as protected areas under new or existing laws. Entities that prevent and proactively manage ecological impacts can avoid project delays, remediation, and litigation liabilities, and gain easier access to new projects and sources of revenue.
Competitive Behavior
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Competitive Behaviour
Entities that own natural gas pipelines and storage facilities face numerous and constantly changing regulations from the Federal Energy Regulatory Commission (FERC) in all aspects of their operations, including rates charged, access offered to pipelines, and siting and construction of new facilities. Pipeline entities enjoy a natural monopoly, and FERC regulations ensure that entities do not abuse this position through unfair pricing, discriminatory service, or by other means. Due to concerns about the impacts of oil and gas market distortions on American consumers and businesses, new market manipulation regulations issued by the Federal Trade Commission or the Commodity Futures Trading Commission could also affect the Midstream industry. Entities could be affected by prospective rate changes, compensation payments, or regulatory penalties for violating regulations governing competitive behaviour. Midstream entities face uncertainty in relation to their ability to change the rates charged, which could affect their ability to recover higher costs.
Critical Incident Risk Management
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Operational Safety, Emergency Preparedness & Response
Midstream entities operate a vast network of assets that face risks of spills and accidents. Any incident that results in the unintended releases of hydrocarbons could have wide-ranging impacts on the environment, employees, and local communities. As a result of these concerns, new safety regulations related to pipeline and rail operations are emerging. Significant events could create one-time costs from fines and corrective actions and contingent liabilities for remediation or damages in lawsuits. These factors could also erode an entity’s social license to operate. In order to avoid or minimise such risks, investigations of past incidents show that it is extremely important to develop a strong safety culture, and establish a thorough and systematic approach to safety and risk management. This includes emergency preparedness and response and operational integrity across the entity and in relationships with contractors.