COMPANIES IN THE OIL AND GAS, chemicals, and mining sectors are among those with the highest environmental, social, and governance (ESG) risk profile2. Concern about this risk profile is growing significantly among investors, who no longer appear willing to accept certain behaviors as the cost of doing business. For evidence, look no further than the CEO of Rio Tinto and a set of direct reports, who resigned in late 2020 amidst a shareholder revolt over their legal – if not ethical or moral – decision to destroy an aboriginal cave as part of mining iron ore3. A heady combination of growing societal demands, increased regulatory pressure, and investor activism is driving natural resource companies to raise the bar on ESG stewardship – and a reasonable starting point is addressing the fact that natural resource companies contribute more, directly or indirectly, to GHG emissions than all other industries combined (Exhibit 1). Some companies like BP are now shedding GHG-emitting upstream and petrochemical assets and redirecting capital towards clean energy in a self-styled shift from an integrated oil company (IOC) to an “integrated energy company” (IEC).
Shishir Bhargava

Recent Posts
Fixing Flawed Environmental Clauses in Joint Venture Legal Agreements
Joint Venture Director Selection: Shouldn’t the Board Have a Say?
VIRTUALLY ALL joint venture legal agreements provide owner companies with the unilateral right to nominate anyone they deem fit to serve as their representatives on the JV Board or equivalent body. In practice, owner companies often make these choices based on internal needs and dynamics, and often in a rush – for instance, appointing their CFO to maintain optics after the partner does the same, or using the role as a development opportunity or carrot for a younger executive.
But owner companies almost never consult with the constituency best positioned to provide advice: the JV Board itself. This leads to JV Boards that lack the mix of skills and personal attributes necessary for success – and that miss out on an opportunity for self-reflection that fosters a common culture and collective sense of self.
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