In this episode of Beneath the Subsurface, we're focusing on ESG. We'll unpack what each of the elements are; Environment, Social and Governance, their measurement, and how they permeate our business. With growing requirements for standardizing and quantifying efforts, this discussion tackles how we at TGS are focusing on each of these efforts on a fundamental level. Jaclyn Townsend chats with Whitney Eaton and Gabe Rolland about this essential and quickly evolving topic.
Join Jaclyn Townsend, Whitney Eaton, and Gabe Rolland as they discuss the growing need, quantification, and evolution of ESG.
TABLE OF CONTENTS
00:00 - Intro
00:52 - The Rise of ESG to Normalcy
05:07 - ESG is important to... Everyone
07:14 - Regulating the Metrics and Conversation
09:08 - The Big Footprint (Emissions)
14:17 - Quantifying ESG
16:50 - The Asset-Light Advantage
20:14 - Unpacking Social and Governance
26:07 - Expanding Partnerships: Industry Groups and Academia
30:46 - Supply Chain & Vendors
EXPLORE MORE FROM THE EPISODE
Jaclyn Townsend (00:03):
Welcome to TGS' Beneath The Subsurface podcast where we're tackling bigger picture issues and topics facing the energy industry today. I'm Jaclyn Townsend back as your host for today's discussion with guest speakers, Whitney Eaton, VP of Sustainability and Compliance at TGS and Gabriel Rolland HSE manager at TGS. If you've been around the industry for a minute, you've probably heard the terms, ESG and sustainability, increasingly gaining coverage and traction. For many, the term ESG probably brings to mind environmental issues like climate change and resource scarcity, but it's much more than that during today's chat. We'll gain insights about why ESG is important, what's measured and why understanding your impact is essential for business today. So welcome Whitney and Gabe.
Whitney Eaton (00:50):
Hello.
Gabe Rolland (00:50):
Hello.
Jaclyn Townsend (00:52):
So let's jump right in. I want to start by mentioning a Hart article recently published about ESG, where they lightheartedly, but in the same breath, seriously mentioned that ESG is now making a consistent appearance in earnings calls presentations.
Jaclyn Townsend (01:06):
They say, quote, "ESG reporting has moved from an afterthought at the end to a highlight at the beginning companies, large and small operators and service providers are releasing separate sustainability reports and more frequency" end quote, our CEO Kristian was also featured in this particular article and he emphasizes the importance of ESG and how our industry plays a critical role in moving towards a more sustainable future. The article also emphasizes an undeniable movement that's happening around ESG. So we know it's important, but why Whitney we'll start off with you. It wasn't too long ago that the acronym ESG was not well known, and now it's all over the place. Splashed in investment journals articles, like the one I just mentioned and now appearing as special topics at key conferences to give our listeners a quick understanding of what ESG is and how it's linked to sustainability. Can you shed a little light on the subject for us? What is ESG and why is it important?
Whitney Eaton (02:06):
So ESG for those who aren't aware stands for environmental, social and governance, and essentially means the same thing as sustainability, or the more outdated term, corporate social responsibility (CSR). It's something that's actually been around for organizations for several decades, health and safety, probably the most traditional sustainability topic has been around for decades. Companies and organizations have been required by law to track and report on their health and safety statistics. Another well-known sustainability topic is anti-corruption compliance. The Foreign Corrupt Practices Act in the U.S. has actually been around since the 1970's, but it wasn't until the early two thousands, when the U.S. Government started to aggressively enforce this law, as well as publish guidance to companies, that you started seeing independent compliance programs, being established within organizations. Each of these were standalone efforts, almost siloed within their practice area. What you're seeing now is companies, investors, are consolidating their reporting on all of these issues into one report, and they're linking them together.
Whitney Eaton (03:16):
They're doing a holistic analysis on ESG, not just from a health and safety standpoint or an anti-corruption standpoint, but as an overall sustainability standpoint and adding into these topics is human rights. That has gotten a significant legal push in the past couple of years, and then climate change. Climate change is a little bit unique from these other topics, is that it's not being led so much by government regulation, but by investors and shareholders. The Paris accord is the impetus for a lot of these climate change requests from investors and shareholders. And we are being asked more and more to not just report on what we are doing or how we're tracking our emissions, but also what we are doing to reduce them. ESG is also important to understand in the category of not just your organization, but how your organization fits within the value chain.
Whitney Eaton (04:08):
So in order to know what sustainability issues are relevant to you as an organization, you need to understand both your value chain and what your stakeholders care about. Here at TGS, we took a very critical look last year at our whole value chain from start to finish both within the geoscience industry, but also within the overarching oil and gas industry. And then we mapped out who our stakeholders are at each step along the value chain. And then what sustainability issues they care about. Some of these issues may be risks, like anti-corruption, some of them may be opportunities, like knowledge sharing or promotion of technology. Doing this helped drive what our sustainability strategy is here at TGS. It also helps us identify what we need to focus on as an organization and how we can merge our strategies to ensure we have a more holistic strategy that affects the entire value chain on a more long-term or consistent basis.
Jaclyn Townsend (05:07):
Who is ESG important to? You mentioned investors, are there other audiences or key segments of the industry that really need to be paying attention to ESG?
Whitney Eaton (05:18):
So investors are the big ones right now. Investors are the ones that are really driving the reporting aspect of ESG. I would say, I don't think they're actually driving the compliance with the health and safety laws, but they are driving the reporting aspect of it. Customers are becoming a stakeholder in this as well. We're seeing a larger push from our customers to report on not just our traditional health and safety or anti-corruption compliance programs, but we're seeing a push to report on our emissions, to report on human rights. So our customers who will have the same push from their investors to share their sustainability issues, they're pushing it down the supply chain as we are as well. And then other stakeholders that are relevant are countries and governments, where we go to work. A lot of our data is acquired in places where we have to work with the government to be able to acquire, market, and license the data. And ESG is becoming a significant factor. And it's actually an opportunity in these regions where we can highlight what we do in a way that benefits both the country and how we acquire the data within that organization or in that country.
Whitney Eaton (06:22):
And then knowledge sharing. We work with academia and universities to promote knowledge and sharing of technology so that we, as an overall society can improve and find ways to advance. So our stakeholders are not just our investors and our customers, but it can be governments we work with, it will be our own suppliers, it's our employees - our employees at TGS are very interested in ESG and a wide variety of the ways we can use technology to develop and become more sustainable or ways we can use geoscience data in ways that help renewable industry or to help with natural disasters and other ways. So the stakeholder chain for us is pretty broad and not just investors, but I will say they've driven a lot of the reporting obligations under sustainability.
Jaclyn Townsend (07:14):
Gotcha. So it sounds like there's, like you just mentioned a broad range of stakeholders and how is that all regulated? If you're talking about different countries and different types of stakeholders, is there one way to regulate this or does it vary?
Whitney Eaton (07:29):
It can vary And we'll talk there- there's two different ways. I think we should look at regulation. There is the legal regulations, what we have to do to comply with the laws. And that largely drives how we handle our compliance program, how we handle health and safety compliance with environmental laws, for operations. Compliance with the law is a significant part of regulating sustainability.
Whitney Eaton (07:49):
But I think what's really driving sustainability today is the regulation from investors and analysts and the consolidation of how we report on sustainability. So we, here at TGS, not only are we a part of the UN Global Compact and the sustainable development goals help drive some of our sustainability issues. We also work and follow the task force on climate-related financial disclosures that is considered in my opinion, to be one of the preeminent documents on how you report your sustainability metrics. And I think it's an important one that is now being widely considered as a key way to share how you handle sustainability. These investor surveys that I mentioned earlier, we participate in several CDP is predominantly focused on climate change, but that's become in my opinion, one of the predominant ways in which companies report on their climate change efforts. And I think as you see more and more companies focus on these investor analyst surveys that will drive how this information is reported. So there is the government Regulation aspect, which is important, but how companies are reporting is largely being driven by investors and analysts and the task force and mechanisms, they are using to measure companies against one another.
Jaclyn Townsend (09:08):
All right, so moving on Gabe there is a lot of talk about carbon emissions and how to reduce them. Consumers and investors are more conscious of their footprint and are pushing businesses to measure and report their impact. So with such a heavy emphasis on carbon emissions. How does measuring emissions help quantify efforts for ESG?
Gabe Rolland (09:31):
Yeah, that's a great question. And, you're absolutely right that there's an ongoing effort to better understand how a company's carbon emissions impact, not only the environment, but also the communities in which we live and work, and also how we can potentially reduce them over time. It's also important to note that, and you alluded to this in your question, that there's also been a significant push by investors and even by some of our clients to measure, collect, and report, our carbon emissions. So first of all, I'll say that when it comes to measuring and quantifying carbon emissions, I really think TGS is actually in a unique position relative to our peers for a number of reasons. And I will give you a few examples to make my point. So, first of all, because we're an asset-light company compared to our peers who own vessels and vibrators and crew trucks, et cetera, we really don't have much to show.
Gabe Rolland (10:18):
In the way of what we call direct emissions, which are basically greenhouse gases emitted from equipment that TGS owns. And for us here at TGS, that's essentially the one company van that we own located here at the Clay Road office parking lot. So as you can tell, direct emissions from TGS equipment are quite low, which if you're an investor or client or individual that pays attention to a company's direct emissions output. And from that standpoint, I really think it makes our asset-light business model very attractive. Now, when it comes to indirect emissions, teach us, these are largely generated by our data centers where we process data using high power computing. So tracking and targeting these direct emissions is an area where at least as compared to direct emissions, we have a bit more control and a bit better ability to make an impact with respect to our carbon footprint.
Gabe Rolland (11:07):
I think another reason that puts us in a unique position is the fact that we are one of the largest buyers of seismic acquisition capacity. Actually, if not the largest. So we work closely with a large range of acquisition contractors and clients. Now because of this, I really think that we have an opportunity to influence, collaborate, and engage with the industry to better quantify carbon emissions, and also generally improve our ESG efforts. So at a minimum, you know, we're uniquely positioned to gather greenhouse gas emission information across a wide range of acquisition methods, vessel types, et cetera. And actually this year, we did take several steps towards achieving this by contractually requiring vessel contractors to report their carbon emissions to TGS. So what that basically means is that in the long run, that the steps we've taken so far in capturing carbon emissions statistics is really important because over time we'll be able to analyze this data, do things like set benchmarks on carbon emissions based on survey type and design, or we'll be able to better predict what our carbon footprint will look like based on a wide range of data that we'll have collected over a period of time.
Gabe Rolland (12:13):
Now, as a last example, we're also looking at how we can track carbon emissions for business related travel by car, plane, et cetera. So I know that we're not traveling much this year, thanks to COVID, but the end of the day we are an international business. So when COVID is finally in the rear view mirror, I think it's safe to assume that business travel will ramp back up. So quantifying our business travel related emissions will provide us with valuable information. And here, I think we'll also see that there are opportunities to reduce our carbon footprint by for example, better planning, more use of video conference systems, or even by offsetting carbon emissions that will be generated through business travel. So as you can see, measuring and understanding what our carbon emissions look like across the value chain is a big step towards quantifying our overall ESG efforts. And personally, I'm looking forward to seeing how this develops over the next several years, and also where TGS can make improvements.
Jaclyn Townsend (13:11):
Is there anything that TGS has done in the past to quantify our efforts to support ESG? We talked a little bit about what we're doing now, is there anything we've done in the past?
Gabe Rolland (13:23):
So, you know, particularly when you look at marine and land operations, you know, historically we have done quite a bit, you know, in terms of mitigating our impacts or potential impacts on the environment. And that's actually something that I go a little bit more into in one of the next questions.
Whitney Eaton (13:38):
So one other thing I would like to add is what we did in 2019, is we started looking at our carbon emissions by survey and tracking not only our carbon emissions by survey, but then also looking at the average emissions per type of survey, and we detail this both on our website and in our sustainability report. What is relevant to know is that we'll be able to, going forward when planning surveys, take into account potential emissions or what average emissions might look like for a survey based upon size, type, or scope. And I think this will be really relevant, not just for us, but also for our clients and customers as well.
Jaclyn Townsend (14:17):
So another question, carbon emissions are a big part of ESG. I think we know that, but what are we doing past and present at TGS to quantify our efforts to support ESG further?
Whitney Eaton (14:26):
So quantifying ESG progress is a significant part of demonstrating our efforts with respect to sustainability here at TGS. We set and track KPIs or quantitative metrics by which we can demonstrate improvement. This is most relevant in the 2019 highlights chart in our sustainability report for each UN Global Compact goal, we set and identified specific actions we took in 2019 to address those goals. And our aim is the coming years to then advance upon those goals or to track those numbers over time. Some of these may include training hours provided as part of our commitments to governments and our knowledge sharing efforts, our traditional health and safety statistics, both of our workforce and our contractors in the field. This demonstrates our continued commitment and achievement of our safety goals or environmental metrics that we've historically tracked such as unplanned spills or unplanned releases into the Marine environment.
Whitney Eaton (15:23):
Being transparent in our governance reporting. And the use of TGS' hotline is another area where we are being more transparent as well as quantifying metrics in tracking sustainability. So it's not just emissions where we need to set KPIs, but each of our sustainability efforts need to have tangible, quantifiable goals and targets that we are working towards and Gabe, can expand a little bit more on what we've done historically with respect to our environmental efforts beyond carbon emissions, as TGS has consistently reported over the years on specific goals when it comes to mitigating our environmental impact in our operations.
Gabe Rolland (16:00):
Yeah, sure. So as I discussed earlier, it's true that measuring and analyzing our carbon emissions and in turn understanding our carbon footprint is an important part of the ESG puzzle. But here I want to focus on the E in ESG or the environment. And I want to do this to explain what TGS and the seismic industry have historically done to mitigate any potential impacts on the environment. Now, because we're an oil and gas service company, I think that the seismic industry has historically been viewed negatively from an environmental standpoint, but the reality is that the seismic industry has invested time, effort, and also decades of research to mitigate and negate potential impacts on the environment. So for us at TGS, you know, I think that our multi-client business model is actually a more sustainable and environmentally friendly business model than say your traditional proprietary acquisition methods.
Gabe Rolland (16:50):
And I mean, if you think about it, by being both an asset-light and a multi-client company, we're essentially allowing for multiple companies to license the same set of data over time, which essentially decreases the need for multiple clients to acquire that similar data on a proprietary basis. So to put it in other words, rather than several companies acquiring data over the same area, which if you think about it potentially results in producing additional carbon emissions and potential impacts on the environment, we reduce the demand for multiple operations by acquiring, and then in turn licensing the same geoscience data to many clients. I think it's also important to point out here that aside from our multi-client business model, being better for the environment, reducing the number of seismic operations, also minimizes exposure risks to crews. So this also improves health and safety metrics and then potentially reduces the anti-corruption risks.
Gabe Rolland (17:43):
And another way we support ESG further is by leveraging our imaging technology, data analytics, and also artificial intelligence to improve the quality of the data that we provide. And we're able to do this without putting crews in the field, which then further reduces our potential impacts on the environment and also improves our health and safety metrics. So by using improved technology to reprocess existing datasets, this then allows us to provide our clients with a better product in a more sustainable manner. And it also allows us an opportunity to showcase and share our technology with governments and countries that we operate in. I also want to point out that while from an ESG standpoint, the things I mentioned are good for TGS. I think it's also very important for our clients because it both de-risks their exploration activities and also reduces the indirect impact that they might otherwise have on the environment if they were to acquire proprietary surveys themselves.
Gabe Rolland (18:35):
So in a way, if you think about it, we're supporting our clients ESG goals, which is both great for the environment, but also great for TGS as a business. Real quick, I also want to touch on some of the efforts that are implemented in the field to minimize potential impacts on the environment. And I do this because I think it's important to showcase the efforts that our industry has consistently put forth. So before we even begin to acquire field data, our project developers and operation managers here at TGS spend a lot of time assessing things like biologically important areas, Marine mammal, migration paths, spawning grounds, et cetera. And we typically do this through EIAs or Environmental Impact Assessments, which are essentially lengthy substantial documents that help us understand what potential impacts our operations might have and also how we can best mitigate or eliminate those impacts.
Gabe Rolland (19:25):
So once an operation begins in the Marine environment, for example, TGS employs a range of third-party contractors, such as Marine mammal and predictive species observers. And their placed on board to make sure that we have experts monitoring the Marine environment during our seismic operations. As another example, we also deploy passive acoustic monitoring systems, and this helps us detect Marine mammal vocalizations, which is particularly helpful when we're acquiring data at night or also during periods of reduced visibility. Now on the land acquisition side, our approach towards mitigating our environmental impacts are similar. It's a wide range of efforts that fall in line with what we do in the Marine operations world. So as a company, I think our efforts go a long ways towards supporting ESG. And we'll continue to look for ways to reduce potential impacts as we move forward in time.
Jaclyn Townsend (20:14):
Thanks Gabe, so Whitney, what are other efforts that fall under ESG? When I think of ESG, I tend to think about all the environmental stuff first, but there's so much more that falls under the initiative, isn't there? Can you elaborate more about the S and the G of ESG?
Whitney Eaton (20:32):
Sure. And the environmental right now makes sense, I mean, we're the oil and gas industry, and we're seeing a lot of press and the impact that oil and gas industry has on the environment. But we really have a lot of impact on both the social and governance aspects as well. And these are critical parts of any kind of sustainability program. And we've already talked a little bit about how sustainability really needs to be thought of holistically within an organization. And so this comes both in how you work as a company, but also how you plan your operations. So when you plan a project, you don't just look at the health and safety risks, which are considered a social factor, but you also need to look at anti-corruption risks, human rights risks, the labor and environmental impact, the technology and knowledge share training. All of these are sustainable factors that go into planning a project for TGS.
Whitney Eaton (21:22):
Within our office environment, within our own workforce. We also need to make sure that we have a clear tone from the top that is transparent, that promotes ethics and compliance. And that is one that enables employees to feel that we are working in a diverse and inclusive environment that promotes knowledge and development of our own employees. Sustainability really is more than the environment. If you take a look at the UN sustainable development goals, these highlight the really all areas where companies have an ability to impact the world around us.
Whitney Eaton (21:55):
As I previously mentioned, TGS committed to five sustainable development goals. And that's not to say that we don't do work towards the other goals, but these were five goals we felt both clearly align with either what we do as a company or areas where we really felt opportunities for us to advance and promote TGS, TGS' efforts in our operations. So these five goals for TGS are: decent work and economic growth, industry innovation and infrastructure, climate action, life below water, and partnership for the goals. And then when you hear them, you can see why we at TGS selected many of these for our organization. Here at TGS one of our founding principles, and as part of our statement of values is our obligation and our commitment to advancing the communities and societies in which we live and operate. We are committed both within our organization and within our operations to engage where we do projects, we engage with the communities around us, whether it's with the fishing communities, whether it's with local universities or whether it's with nonprofits or community organizations that are serving a critical need for that community.
Whitney Eaton (23:05):
In addition to having our employees help the communities around us as part of our projects, we think it's important to give back to the countries and governments, where we acquire data. For example, in 2019, we provided over 103 weeks of training to governments as part of our projects in Africa, and this training included, sharing technical skill and knowledge related to the processing and interpreting of geoscience data with the goal that these companies will be able to have their own data centers, their own geoscience operations in the future for our own employees, we also provide training and development. And in 2019, we provided over 1800 hours of geological and imaging courses for our own employees to advance their own technical skill and knowledge. Both of these are critical, not just for the development of our workforce, but for the advancement of our industry as a whole.
Whitney Eaton (23:54):
We're continuing these efforts, and in 2021, we're looking to provide even more development and advancement opportunities, both in regions, where we operate as well as for our own employee base. But one of our other goals for 2021 is focusing on gender diversity and inclusion. Unfortunately, due to COVID-19, there's been a significant departure of women from the workforce as the impact of COVID-19 on households has disproportionately affected women greater than men here at TGS, we recognize that we have an obligation to ensure inclusion both within our current workforce, as well as with future recruitment. To that end in 2021, we've established a specific gender diversity strategy that is aimed at improving retention and recruitment of women within our industry. And we're looking to make sure that women not only have the support they need, but that we continue to advance women both within the geosciences and technological fields as well, as that's an area where historically gender diversity has been lagging.
Whitney Eaton (24:56):
Finally, the last big issue, I think we're seeing is human rights. This has become more relevant due to changes in laws, but we're also seeing a push from our customers on this issue. We not only have an obligation to ensure that our own workforce is managed in accordance with human rights laws, but we have an obligation to make sure our supply chain manages its workforce in accordance with modern slavery and human rights laws. Here at TGS, we've expanded our supplier due diligence process to incorporate human rights and modern slavery questions to understand what their workforce is made up of and to ensure they're complying with labor laws. We've also transferred this into our contracts as well, where we include contractual obligations for our suppliers to expressly comply with these laws and to ensure they have proper due diligence procedures in place to monitor their compliance. All of our sustainability issues and efforts are all being more transparently reported by TGS on the new sustainability portion of our webpage. We recently modified our website to make it easier for our investors, customers, and suppliers, to understand where TGS stands with respect to each sustainability issue that is relevant to our value chain.
Jaclyn Townsend (26:07):
Well, We know that from listening to you guys so far, that there's definitely a lot happening in the ESG world as it relates to environmental, but many more as you just described Whitney, we know moving forward ESG will continue to evolve. And we also know that we can't do it alone if we want to make an impact. So let's talk a little bit about who we're working with and why. You did mention universities and governments and things like that. Can you expand more on the efforts we're making in that realm?
Gabe Rolland (26:39):
And you're absolutely right. I mean, not only is the ESG going to continue to evolve, but it's definitely something that we can't take on alone. And fortunately we're not. So for instance, TGS has historically been a big proponent of the IAGC, which is the International Association of Geophysical Contractors. And actually several of our employees sit on various committees and work groups. And a couple of our executives also sit on the board of directors. Now, myself, I represent TGS on the HSSE committee. And, over the past 10 years, I've been fortunate enough to have participated in several work groups with the IAGC. Now there's actually an ongoing effort to kick off an emissions work group, and it will be tasked with standardizing how we track and also report carbon emissions as an industry. And I'm looking forward to this because Whitney and I are actually going to participate in this work group. And this is great because it'll allow us to come together as seismic contractors to discuss challenges around capturing carbon emission statistics, and also figuring out how to best report on all of these metrics.
Gabe Rolland (27:39):
Now, another way that we collaborate with the IAGC to try to make an impact is by supporting their Ghosts Net Initiative, which is a really great program from an environmental standpoint. So the Ghost Net Initiative is an ongoing initiative that basically promotes ocean debris removal. And it's a collaborative effort by the seismic contractors to remove things like fishing nets or other debris from the ocean. And this helps with not only reducing pollution, but it also protects Marine wildlife from becoming entangled in things like fishing nets. So here at TGS, we've really looked at how we can promote and also support this effort. And one way that we can do this is by encouraging our vessel contractors to participate in the initiative. Again, keeping in mind that TGS works with a whole lot of different vessel contractors. So we really, I think have an opportunity to make a big impact here with respect to the IAGC's Ghost Net Initiative.
Whitney Eaton (28:36):
Gabe's, right. Industry groups are a great way for us to do this. But as you mentioned, we do work with universities and academia as well. We do this in several ways, and we're looking at also expanding this in the future. Historically, TGS has been a long proponent of universities using our data to help promote their own research initiatives, whether it is in geoscience or in alternative ways, we've shared our data for example, with groups down in Indonesia, to help with their tsunami tracking and understanding of tsunamis in that region. We also share our data with other universities and academia who may use it in other unique or interesting ways outside of the traditional oil and gas exploration. Some of these universities will use our data to help with the renewables fields, maybe carbon capture and storage. Others may use this data as part of geothermal mapping or for natural disaster and environmental relief.
Whitney Eaton (29:29):
So we think it's very important here at TGS, that we give those who have the drive, the ability to advance knowledge and use our data to do so. We also want to work with universities who are specifically geared towards helping Sustainability reporting. The university of Houston, for example, has a specific energy sustainability consortium that is geared towards bringing energy companies together, to work on ways to address sustainability issues. We recognize that many of these problems cannot and should not be solved by one company. To generate real change we need industry solutions and industry cooperation. So we will continue our partnerships with the UN Global Compact and other internationally recognized sustainability organizations. One of the things that makes it so exciting for TGS is that we had the support and the ability to help drive change for our industry in these areas. Our board, for example, is incredibly supportive of our sustainability efforts, whether it relates to climate change, gender diversity, or human rights, and where possible TGS doesn't want to be just part of the discussion, but we want to lead the discussion. We want to continue to look for opportunities to work within our industry and within our value chain on sustainability initiatives.
Jaclyn Townsend (30:46):
So we talked a little bit about stakeholders and partners. What about our vendors? How are we helping our vendors with their ESG Journey?
Whitney Eaton (30:54):
Yeah, so we're working with our vendors in a lot of different ways. One of them is we've revamped our due diligence process, and we're also seeing a lot of our customers do this as well. Historically due diligence has largely been focused on anti-corruption risk or understanding health and safety risk, right? It's been very siloed. And what we're here we're trying to do is to broaden it up. And so our due diligence process now will look at a wide variety of risks. It will evaluate the governance of an organization to make sure we know who the owners are, whether there's any trade control risks. We look at any human rights concerns, are our suppliers using additional contractors or subcontractors that we need to be aware of, and how are they managing their subcontractors?
Whitney Eaton (31:36):
We also are working in things like the supplier code of conduct. We've set forth a very clear document that sets forth the obligations we expect our suppliers to abide by when they are performing on our behalf. And then part of this is also incorporating all of this into our contractual relationships with these third parties. So we've expanded upon our contracts with our suppliers and vendors to cover a whole host of sustainability issues beyond the traditional health and safety or anti-corruption. As I mentioned, we incorporate human rights Gabe mentioned, we incorporate emissions. We incorporate a lot of other factors that we need to, to make sure that we are all operating in the same manner and we understand the expectations of each. Going forward, I think, and Gabe alluded to this, is we need to work with our suppliers and this will be part of the IAGC working groups to understand how we can really track and target emissions within an industry when it comes to project planning. And we can't do that alone, we have to work together to that. And I think the IAGC working group on carbon emissions will be a great way for us to work with both our suppliers and our peers, to understand what we can do towards carbon emissions.
Jaclyn Townsend (32:48):
Last question, where are we seeing surging trends and where do you see ESG going? Gabe, let's start with you.
Gabe Rolland (32:58):
So generally I think that we're going to continue to see ESG play a more critical role throughout the supply chain. Now, historically within the seismic and oil and gas industries, there's been a lot of focus on health and safety across the supply chain and having robust contractor or subcontractor management systems. And I think moving forward, we're going to see a much greater emphasis being placed on ESG and managing the factors that are associated with it from Atlanta Marine operations standpoint, I think there's going to be a continued push to design surveys so that they're acquired in a more environmentally efficient matter and over time, it will be interesting to see how new acquisitions technology and equipment can contribute to this. I also see the industry developing more robust carbon emissions tracking and also reporting standards and guidelines, which I discussed earlier through efforts by the agency. And when you also expanded on this, and I think this is really great because on that front, it's going to be extremely important for us to come together as an industry to tackle this ESG challenge.
Jaclyn Townsend (33:57):
Whitney, what do you think?
Whitney Eaton (33:58):
I see ESG not becoming a standalone department or on the sidelines, but I see ESG factors becoming integrated into investment decisions. I think this has to be the case, whether you're taking into account the carbon footprint and incorporating that into your investment and pricing model for a project or just factoring in ESG so that when the business groups are planning a project, they don't go to a separate department for guidance, but they have the skill sets and the ability to spot these issues as part of their business. So I think ESG needs to become an integrated part of companies and how they do business and not just a standalone department. I also think we're going to see more uniformity and comparison of companies by investors and analysts on the ESG front. I think we're seeing a large push by investors to be transparent and to report on ESG in accordance with certain set standards, whether it's the TCFD or other organizations, such as the FASB or the like, but this push to consistent and uniform ESG reporting is something that will also help bring stability to how ESG is viewed between organizations.
Whitney Eaton (35:10):
And then finally, I think what will be interesting for our industry in particular is watching how we can diversify outside of traditional oil and gas, continue our knowledge sharing journey and see how the geoscience industry pivots its use of data from oil and gas exploration and uses its expertise in other ways. Whether it's renewables or alternative energy or the like. The continued knowledge sharing to me is one of the more interesting parts of where ESG can provide opportunities and not just be a risk metric. So I think we're going to see a lot of new changes coming in the future, and I look forward to seeing where they go.
Jaclyn Townsend (35:47):
Well, I think that is a great place to leave it. I want to thank both of you for a very informative discussion and there you have it folks, I'm sure there's more to see in this realm and more that will happen in this space. And we look forward to bringing you the insights, thanks to our audience for tuning in. If you're looking for more resources from this episode's topics, be sure to check out the show notes where we've included some insightful links and food for thought. And of course, if you liked this episode, don't forget to subscribe to this podcast wherever you listen to podcasts or by visiting tgs.com and search podcast. Thanks for listening to another episode of Beneath the Subsurface.