Abuja — The Chief Financial Officer, Seplat Energy, Mrs. Eleanor Adaralegbe has argued that Environment, Social and Governance (ESG) standards and regulatory frameworks in African countries significantly shape oil and gas investments on the continent.
Adarakegbe, who said this during a panel session at the Africa Oil Week (AOW) Conference & Exhibitions in Cape Town, South Africa, noted that these factors influence costs, compliance requirements, and project risk profiles.
Eleanor, while speaking on the theme 'ESG Investing: What strategies make African deals attractive in 2024?', said to ensure compliance and manage ESG-related risks effectively, companies should conduct thorough due diligence, align with international standards, engage with stakeholders, implement robust policies, and maintain transparent reporting.
"Clearly, ESG standards and regulatory frameworks in African countries significantly shape oil and gas investments. So, we need to take the right actions now. These actions not only mitigate risks but also create opportunities for enhanced stakeholder trust, improved financing options, and long-term project success," the Seplat Energy CFO stressed.
According to her, investors assess potential projects by screening them against ESG benchmarks; of which projects that fail to meet minimum ESG standards are often excluded.
She said: "Comprehensive due diligence is conducted to identify ESG risks, including environmental impact, community relations, and governance practices. Investors may use frameworks like the Equator Principles or International Finance Corporation (IFC) Performance Standards. In this regard, Seplat Energy is ahead, proactively setting up to ensure readiness very much aligned with Strategy.
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"Seplat Energy has shown commitment, which is driven from the top- Board, special board committee on ESG matters, and Sustainability management committee chaired by the CEO."
Eleanor advocated the need for operators in the energy space to building a sustainable business through social development, focusing on environmental care and reporting as well as maximising returns for shareholders.
With a mission to deliver the energy transition in Nigeria through upstream, midstream and new energy pillars, she identified the roles of strong governance and HSE, as is the case with Seplat Energy's operations in Nigeria.
Investors, she explained, are increasingly pushing for energy transition projects, such as natural gas developments that serve as a bridge to renewable energy; with also a growing interest in carbon offset initiatives linked to oil and gas operations, which could help mitigate climate impacts.
