ESG – short for Environmental, Social, Governance – is all the buzz on Wall Street and corporate C-suites, a sign of a shift toward socially responsible investing. ESG is the put-your-money-where-your-mouth-is descendent of the old trend of Corporate Social Responsibility, in that it requires companies to increase transparency and develop metrics that demonstrate how they took social and environmental impacts into account, and kept their governance strong.
The E and, to a lesser extent, the G, have been the more visible elements of ESG, especially given strong environmental advocacy campaigns trying to force investment funds and banks to only work with companies that meet their criteria. Governance, too, has garnered attention given the long history of companies that left shareholders holding the bag.
The nearly invisible element is the Social aspect. Ostensibly, it refers to companies being good neighbors and participants in the communities where they work. But it can also encompass technologies that make work easier and safer for employees. That is an avenue that should be highlighted – especially since most of humankind’s major evolutions to overcome challenges have involved new technologies – be it using stones as spear tips to hunt, the inventions of the wheel or iron, all the way up to automobiles and the advancements of the Internet era.
Recently, Nabors Drilling successfully launched successfully drilled three wells on a test site for ExxonMobil subsidiary XTO Energy.
While that technology in and of itself is impressive, how does it help ESG? Firstly, by making drilling safer for humans.
The floor of an active drilling rig has long been one of the most dangerous places for workers and “the labor intensive activities necessary to drill these deep holes into the earth have always accounted for a significant percentage of reportable, lost-time accidents that companies incur every year.”
By minimizing risk to workers and redirecting most of their work to running the automated rig, we have a social win – we’ve made things safe. Chalk one up for the S. Further, automation has the potential to further eliminate human errors that could have environmental impacts, helping the E column. Investing in better, safer energy infrastructure at once protects workers and their jobs, while giving us a return in the form of affordable energy that consumers, businesses, farmers and many others rely upon.
We’ve touched on the importance of maintaining energy infrastructure and how “last year alone, American’s consumed of oil as part of our total energy consumption.” Since the U.S. is the world’s largest producer of oil and gas, and the energy industry provides roughly 8% of our GDP, such advances on the Social front can have a stronger impact. Whether it is renewable, alternative or traditional energy, new technologies can and will drive the solutions to our energy and environmental challenges.
The future of energy is being written right now, and this automated drilling rig is just a small part of it. But it’s a good model for showing the many ways we can fulfill our shared ESG goals.