The honesty of Hess’s reporting is laudable. But failing to include sustainability in its core values is a notable failings

With an A+ GRI (G3) application rating, the Hess Corporation seems to take transparency to the highest level. The oil company is clearly an advanced reporting organisation and its 2012 corporate sustainability report reads like an example of how to fill out a GRI checklist. Reporting enthusiasts will rejoice at the clear organisation of the report, which seamlessly segues from indicator to indicator within each chapter. Yet, for all its transparency, Hess’s reporting lacks some key elements.

Hess was once an integrated oil company. It has shed, or is in the process of shedding, its downstream (refining) operations to focus on upstream (exploring, drilling), mostly around shale gas, which is the subject of environmental and social fears.

Such concerns are to be expected – Hess’s raison d’être isn’t exactly green. Nonetheless, by publishing the materials used in the hydraulic fracturing (fracking) process on a website FracFocus decreasing the amount of fresh water and chemical additives used in its operations, and exploring the use of biodegradable materials, Hess acknowledges the scope for improving the sustainability of fracking for shale oil and gas.

Complicated disclosure

These are steps in the right direction, but unless you’re a chemical engineer, you’ll probably not understand much of what Hess is disclosing, especially on the FracFocus site. Considering the controversies surrounding shale gas, Hess should capitalise on its existing efforts by highlighting its work with FracFocus in a case study and communicating what Hess is doing in a way that’s more understandable to lay readers.

The report, a simple downloadable PDF with a few images, doesn’t catch the eye and appears targeted at a professional audience. But what it lacks in aesthetics, it makes up for in clarity and organisation. You don’t have to dig too deeply to find Hess’s vision: the company “strives each day to be a trusted energy partner that ensures the safety of our workforce and host communities and protects and preserves the environment”.

Hess’s goals are clearly laid out and easy to identify. Unfortunately, many of the goals are aspirational rather than specific and measurable. For example, it would never be possible to determine if Hess had achieved the following goals:

  • Continue to integrate sustainability into enterprise risk functions.
  • Further develop and deepen leadership engagement.

Some key goals do have quantifiable targets, particularly in health and safety, climate change and energy, and the environment, but they are few. Hess is in a period of transition; therefore a bit of murkiness is understandable. As the new Hess emerges, so should crisper goals with clearly defined targets that are not only material, but ambitious and achievable.

Readers may appreciate that Hess is clear about its progress and failures, particularly the company’s need to readjust greenhouse gas emissions targets as it sheds upstream operations and focuses on exploration and drilling. Hess also acknowledges the damage done by flaring and tells its readers that it is working hard to reduce flares. Despite the importance of environmental sustainability to the company’s performance and goals, its six core values – integrity, people, performance, value creation, social responsibility, and independent spirit – don’t include sustainability. Hess’s core values form the basis of its goals and vision according to the 2012 report.

Sustainability goals?

Sustainability’s absence as a key goal is especially surprising because the report has two sections dedicated to environmental issues. In fact, one of the report’s strengths is that the most material issues have their own sections. Climate and Energy is separated from the Environment section. Safety and Health isn’t couched in the Global Workforce section, but instead has its own chapter. Additionally, within each section, Hess has compartmentalised subsections effectively. If you want to read about Small, Diverse, and Local Suppliers, you know where to begin and where to end.

On the other hand, the only things breaking up the 74 pages of text are small pockets of case studies, flat graphs and charts, and a hotchpotch of photographs of oil wells and people of various ethnicities enjoying their jobs. Some of the case studies are interesting, while others are a stretch.

If Hess’s report is intentionally dull to give professionals the facts with minimum fuss, perhaps its sustainability website is a more lively experience? Unfortunately not. It wins points for its breadth; it’s chock full of PDFs covering very many topics and the animated performance graphs have potential, but overall the website is a missed opportunity to communicate with a broader audience than the report reaches.

This all being said, reporting is a path, not a destination. We push for reporting because we believe, to paraphrase Louis Brandeis, sunlight to be the best disinfectant. The more we know about a company’s operations, the better those operations will be run. In a sector not known for candour about sustainability, Hess maintains a measured position towards the front of the group.

Snapshot

Follows GRI? Yes, A+.

Assured? Yes, but not by GRI.

Materiality analysis? Yes.

Goals? Yes.

Targets? Few.

Stakeholder input? Yes.

Seeks feedback? Welcomes feedback, doesn’t seek it per se.

Key strengths? Transparent and reports on just about everything.

Chief weakness? Talks the talk, but action is limited.

Pleasant surprise? Hess’s honesty.

Arthur A Sprogis is a consultant at Context America.

CR Reporting  extractives  Hess  sustainability report 

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