African Energy Week Discusses Sustainability and Decarbonisation

Published on:
by KnowESG
tinywow tinywow pexels-anna-nekrashevich-6802048 7014378 7091489

During a panel discussion at the African Energy Week (AEW) 2022 conference, energy industry executives said that environmental, social, and governance (ESG) doesn't just mean decarbonisation and the use of renewable energy but is also needed for the sustainable development and exploitation of Africa's vast hydrocarbon resources to address energy security, socioeconomic development goals, and environmental sustainability.

Entitled; ‘How ESG has become the driving force in the energy sector,’ the panel discussion was moderated by James Carter, Partner at DLA Piper, UK and included Jorian Hamster, Senior Associate, DLA Piper; Festus Kapembe, ESG Manager, ReconAfrica; Michiel Coenraads, Partner, DLA Piper UK; Julien Perez, VP Strategy and Policy, OGCI and Liesl Esau, HSE & EC Lead, bp Southern Africa, as speakers.

According to Hamster“ESG is not just decarbonisation, it is not just renewables. By only focusing on decarbonisation, we miss the meaning, importance, and benefits of ESG in maximising energy development, ensuring energy security, and transferring the benefits of resource exploitation to local communities and economies. Today, we are seeing global investors just signing deals when they see that it is renewables and stepping back when it is hydrocarbons, yet even in massive renewable developments, ESG is not being prioritised.”

Speaking about how ESG is shaping energy market trends, Coenraads stated, “What we are seeing is a huge shift of capital from fossil fuels to renewables. Focus on ESG projects is about $600 billion, and on non-ESG projects is about $400 billion. Banks are moving away from investments in carbon chains, and many international companies have committed to net zero. This makes it hard for majors to finance infrastructure to get oil out of the ground because they need to reduce carbon emissions. As a result, they are now diversifying their assets. Shell, for example, has been instructed to reduce emissions by 45% by 2030.

Commenting on the increasing exits by majors across some of Africa’s hydrocarbon-rich basins in prioritising ESG targets set in their home countries, Hamster added that “Risks does not mean you have to diversify, you have to work together with all parties involved, including governments, and develop mechanisms to work around maximising both ESG and energy developments.”

Perez also said that because companies are putting ESG at the top of their list of priorities, investments in renewable energy and electrification will continue to rise. However, if investments in gas and new baseload power capacity stop, the energy system will be in a lot of trouble.

He said “We should continue investing in fossil fuels and at the same time use new technologies such as drones, data analytics, and satellites to track the environmental impacts of these projects. In our oil and gas projects, we need to come up with and use new ways to reduce carbon emissions. World players must be educated on what ESG entails.

The panel also explored what Africa as a continent needs to get out of the upcoming COP 27 summit in Egypt. Hamster said “There is something circular about these COP summits, especially around climate finance, and the commitments keep on being not delivered. There need to be practical solutions and implementation, not just promises. African voice in ESG, the energy transition and environmental issues needs to be heard and included in global frameworks.”

According to Kapembe“In addition to just maximising commitment and budgets in environmental and social spending, African companies and leaders need to raise issues around what is affecting the African population at COP 27. As much as we can explore renewables, we need to make use of the resources available in vast quantities on the continent. The African team needs to speak with one voice and make commitments that will help us keep making progress toward both environmental and socioeconomic development goals. Africa has a lot to contribute to addressing the global energy transition but needs to be listened to.”

Perez added that “It seems Europe and the west are talking to each other and not listening to the whole world. If we do not resolve the issue of ESG, climate change and energy poverty together, we are all going to lose. In terms of ESG, Africa has a lot to gain from speeding up investment and development in renewable energy sources and putting smart technologies into place. For climate activists, the fossil fuel industry is not a threat, and for the fossil fuel sector, ESG is not a challenge but a business opportunity.”

Esau highlighted the need for the implementation of campaigns aimed at increasing ESG awareness across the entire energy value chain, from policymakers, energy producers, retailers, transporters, and consumers.

Source: APO Group

For more environmental news

Share:
esg
esg
esg
esg