New group explores how treasury will support the transition to net zero carbon energy.
Last week, NeuGroup, launched, in partnership with Societe Generale Americas, an Oil & Gas Treasury and Energy Transition Pilot Group. The aim of the group is to help treasurers at upstream and midstream companies in the sector exchange knowledge on navigating and funding their transition to net zero carbon businesses. NeuGroup brings its unrivaled process of facilitating sharing and learning in these unprecedented times and Societe Generale brings its global expertise in energy and sustainability finance and how it applies to the unique circumstances of the Energy Transition in the US market.
“It is important to look at North American Oil & Gas companies as an important part of the energy transition solution, and not in binary terms of us vs. them, in the context of any discussion on climate change and getting to net zero by 2050,” says Karl Pettersen, Chief Sustainability Officer and Head of Ratings Advisory for the Americas at Societe Generale.
Says Elizabeth Hunter, Managing Director and Head of the Houston Office for Societe Generale: “this is a time to support a pragmatic approach to help corporate treasurers in the North American Oil & Gas think through, and plan for, the potential ramifications for capital access and cost for this very important sector, which is truly at the tip of the spear in terms of the intersection of credit ratings and the new world of ESG ratings”.
Topics in focus
The first meeting focused on 1) the capital market outlook for the Oil & Gas sector on the bank and bond side; 2) current projects and areas of focus for participating companies and 3) the intersection of ESG scores and credit ratings, plus the impact on agency relationship management and fixed-income investor relations. Subsequent sessions will explore the policy changes at major banks toward financing tied to fossil fuels, further refining bank communications and investor relations strategies, regulatory changes in the US and globally impacting sector firms’ financing needs, as well as evolving best practices for finance and sustainability/ESG team collaboration. Other pressing topics for treasury in the sector outside of energy transition will also be part of sessions going forward.
“The formation of this group comes at the right time, as the pace of energy transition it appears is picking up as public policy, the courts and investors look to respond to heightened concerns about climate change,” noted NeuGroup Founder and CEO Joseph Neu.
The week of the meeting saw an important ruling by a Dutch court to bring forward Shell’s carbon reduction targets, for example, and activist investors succeeded in placing additional energy transition nominees onto the board of ExxonMobil, as well as a non-binding shareholder vote for more extensive Scope 3 GHG emissions target reductions at Chevron.
If you are a treasurer in the sector and would like to learn more about the group, please inquire here.