ESG (Environment, Social, Governance) has become essential in business and investment circles, setting a new standard in measuring the sustainability and ethical impact that a company makes.

Global sustainable investment now tops $30 trillion—up 68 percent since 2014 and tenfold since 2004[1].

The acceleration has been driven by heightened social, governmental, and consumer attention on the broader impact of corporations, as well as by the investors and executives who realise that a strong ESG proposition can safeguard a company’s long-term success.

ESG reporting offers a way for customers, investors and society to hold companies to account, to make sure that the issues people care about (social justice, equality, diversity, environment, etc.) are reflected and appropriately addressed by the companies we choose to do business with and invest in.

All while delivering outsized financial returns to investors, meaning a win-win for every stakeholder.

Six ASX listed companies are leading the way being the first to start reporting on ESG using a recently launched global standard ESG framework – they are reporting over and above the quarterly financial and operational update required by the Australian Stock Exchange.

Why will ESG companies (and their investors) win in 2021 and beyond?

Businesses that can demonstrate real ESG commitments, progress and credentials can gain from significant benefits, such as:

• Access ESG funds: There is currently more ESG money than there are ESG investment-ready opportunities.
• Secure top tier customers: Top companies are conscious of ESG in their supply chain and want to buy from best-in-class ESG suppliers
• Attract the most talented teams: Smart people no longer want to work for non-ESG companies.
• Positive community perception: Doing business at all levels is just easier when the community wants you to exist and supports you.
• Shareholder returns with positive impact: Be proud in creating positive change in the world while providing outsized returns to shareholders.

Companies that align their goals to the long‑term goals of society are most likely to create long‑term sustainable value, while driving positive outcomes for the business, the economy, society and the planet – and ultimately shareholders as well.

From an investor’s point of view, ESG companies will deliver better returns as they attract more customers, more investors and better talent.

Before choosing an investment or purchase, all stakeholders want to be assured businesses are truly “walking the ESG walk” and not just ‘ESG washing’. However, the key challenge for many companies is the lack of a universal and consistent framework to measure and report the shared and sustainable value they create.

 A new universal ESG framework

To address the lack of consistency in reporting ESG, the World Economic Forum (WEF) set out, with the support of the Big Four accounting firms (Deloitte, EY, KPMG and PwC), to create a common ESG framework to measure and disclose meaningful and relevant aspects of corporate performance on environmental, social and governance matters.

In September 2020, WEF launched its White Paper “Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation” which called for a universal framework for ESG measurement. This framework consists of 21 core and 34 expanded metrics and disclosures aimed at mainstreaming reporting and progressing toward a generally accepted international standard for ESG.

First group of ASX companies have adopted this ESG framework

Keen to maximise the benefits associated with demonstrable ESG, the first cohort of small to medium ASX listed companies have released their first quarterly ESG Progress report using the newly released WEF ESG metrics.

Companies who have released their first ESG progress report include:

• Vulcan Energy (ASX:VUL) – Exists to decarbonize the currently high carbon production footprint of lithium-ion batteries used in electric vehicles by producing a world-first Zero Carbon Lithium® hydroxide product in Germany.
• Whitehawk (ASX:WHK) – Empowering a fearless internet through Online Cybersecurity Exchange platform that provides cyber risk scoping, prioritization and mitigation products and services
• Euro Manganese Inc. (ASX:EMN) – Green and European source of ultra high purity manganese for electric vehicle batteries developed from the recycling of a tailings deposit located in the Czech Republic.
• Elixir Energy (ASX:EXR) – Elixir Energy is exploring for natural gas on the Mongolian-China border to replace burning of coal for energy in China
• Minbos Resources Limited (ASX:MNB) – Exploration and development of a phosphate (fertiliser) project in Angola and training local farmers to increase crop yields
• Myfiziq (ASX:MYQ) – Health Tech – Accessible yet advanced human imaging via smartphone app for health, fitness and wellbeing

Getting started – technology plus metrics delivers accessible ESG

The above companies are using impact monitoring technology, Socialsuite, to periodically collect and report across the World Economic Forums recently released 21 standard ESG metrics.

Socialsuite’s impact monitoring technology provides structured ESG data collection, ongoing ESG reports that can be directly inserted into quarterly reports, benchmarking across other similar companies’ ESG journeys and expanding ESG reporting depth/complexity as the company grows over time.

Socialsuite provides a clear and practical way businesses can get started with ESG measurement based on the company’s size and resources, which can be scaled and extended as capacity increases. It uses the World Economic Forum’s 21 material ESG metrics and records “ESG Progress velocity” from quarter to quarter, enabling businesses to measure, track and report progress toward the ESG indicators.

The benefits of ESG compliance for small to medium listed companies are significant, which is why the first cohort of ESG reporters have been so quick to pioneer ESG compliance in Australia by beginning to measure their progress and demonstrate their credentials.

A technology platform like Socialsuite combined with the new WEF ESG metrics has made best practice ESG reporting accessible.

Francis Wedin, Managing Director at Vulcan Energy explains, “At Vulcan, positive impact and ESG is the core reason we started the company and our Zero Carbon Lithium®️ project. We are proud therefore to be a first adopter of the ESG Global Standard Metrics. We know that by delivering against ESG we can create long‑term sustainable value, while driving positive outcomes for the business, the economy, society and the planet. Working with Socialsuite technology and the standard ESG metrics has helped us get started with reporting our ESG position and understanding how we can continue to build over time.”

If you want start growing your ESG monitoring capacity you can start your baseline ESG report today at https://socialsuitehq.com/esg/

[1] Global Sustainable Investment Review 2018, Global Sustainable Investment Alliance, 2018, gsi-alliance.org

88 Energy Ltd (ASX:88E; AIM:88E) this week executed its drilling contract to drill the Merlin-1 and Harrier-1 wells for Project Peregrine on the North Slope of Alaska.

In fact, the Alaska North Slope is home to the US’s largest two oil fields and it hosts some of the world’s largest discoveries over recent years, featuring both onshore and conventional (not shale) with enormous potential.

With excellent infrastructure and low royalty rates it is a good place to do business.

Project Peregrine has a 1.6 billion barrel mean unrisked recoverable prospective resource, located on trend to recent discoveries, including one by oil super major ConocoPhillips (NYSE: COP).

The project has multiple compelling targets, that are shallow to drill test – which means relatively low cost drilling.

An independent resource assessment arrived at an unrisked prospective oil resource of over 1.6 billion barrels at Project Peregrine, across three prospects, two in the Nanushuk formation (Merlin and Harrier), with a Harrier Deep prospect located in the deeper Torok formation.

Recent further seismic analysis increased the company’s confidence at the Project, which identified several similarities between 88E’s Merlin and Harrier prospects and existing discovered oil fields nearby.

Merlin-1 drilling is imminent

88E is on track for its scheduled spud date of the Merlin-1 well February 2021, which is planned to be drilled to a total depth of 6,000 ft, and aims to intersect the shallower Nanushuk topset horizons listed above.

88E recently confirmed a farm out partner who will contribute US$11.3M toward the cost of the Merlin-1 well, and earn 50% of the Project. The estimated gross cost is US$12.6M.

88E’s farm-out partner is the Alaska Peregrine Development Corporation LLC (APDC), a high calibre group of private US individuals that have experience in oil and gas, including owning businesses that directly operate in the sector.

88E only needs to contribute US$1.3M, representing its 50% ownership share over and above a US$10M carry. All additional costs associated with the project above the US$10M carry will be borne equally by both and 88E.

This is a good deal for a small cap oil explorer like 88E, as it allows the company to retain 50% of the upside of drilling success, without having to outlay a large sum for drilling. It is close to a 2 for 1 deal for 88E investors and effectively gives 88E a low cost shot at a potentially large oil discovery early next year.

88 Energy has executed a rig contract with All American Oilfield, LLC for the use of Rig 111 to drill the Merlin-1 and Harrier-1 wells at its Project Peregrine in the NPR-A region of the North Slope of Alaska.

Managing director Dave Wall said of the spud, “The farm-out was finalised late last week and now the rig contract is executed.

“Drilling at Project Peregrine is moving ahead as planned and we are only three months away from spud on what will be a potentially company-making prospect for our shareholders.”

Pantheon’s spud could propel 88E forward

88E operates the majority of the vast 475,000 acre Project Icewine, targeting oil on the world class North Slope of Alaska. The company’s goal is to build a successful exploration and production company that delivers material benefits to its shareholders and contributes to the development of the regions in which it works.

Within the region is the £211 million (AU$380) Pantheon Resources (AIM: PANR), which will spud its Talitha-A well, located close to the northern border of the 88E central acreage position, in January.

Several of the prospective horizons in Talitha-A are interpreted to extend into 88E acreage as indicated below.

As Pantheon’s drilling is ahead of the Merlin-1 spud, 88 Energy’s share price could receive some support for 88E, increasing the perceived value of Project Icewine’s real estate.

Support for 88E is already strong

88E has found strong support in the December quarter, with liquidity in the stock building as interest in its drilling plans grows.

The company was trading between A$0.005 and A$0.006 in late September, and since then has raised A$10M at A$0.006 per share.

The stock has traded as high as A$0.009 in late November.

News of the spud and farm-out should provide further momentum with significant near-term catalysts in the lead up to the spudding of the Merlin-1 well. A significant oil discovery would drive a substantial rerating of 88E.