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There is no doubt that the corporate landscape is changing. Businesses are beginning to prioritize their climate change efforts as part of their environmental, social and governance (ESG) strategy toward a greener future. The discussion and activity around carbon neutrality has taken on a new urgency in light of statements by leading investment companies like Blackrock, whose CEO, Peter Fink, is asking companies to publicly disclose how their businesses will be compatible with a net-zero economy. This information is being used to form investment decisions and new government regulations like the EU Taxonomy and the UK mandatory climate-related disclosures, both of which start to take effect for 2021 reporting.
The direction of travel is clear – every individual, organization, and government needs to address their contribution to global warming and have a carbon neutrality strategy aligned with the Paris Agreement targets. New ways of working, operating and manufacturing will be sought as businesses, such as service providers like TGS, have a crucial role to play as the world, and our customers, seek to meet the goal of carbon neutrality.
So, what does the term – which TGS refers to as “net-zero” - actually mean? We consider it to be a state where no incremental greenhouse gases are released into the atmosphere. This means that global emissions output is balanced by the removal of carbon from the atmosphere via carbon sinks such as forests, mangroves and other vegetation, along with carbon capture. But the natural world cannot capture all of the present levels of man-made carbon emissions, so these emissions also need to reduce
As net-zero targets gain momentum among corporations, most of the headlines have been grabbed by the largest – and usually household – business names who know that reductions in emissions deliver many shared benefits to both the supplier and the customer. It is also clear that reducing them to net-zero represents a clear leadership statement, inspiring others to create similar initiatives. As a service company that fulfills the energy data needs of two industries at the forefront of emissions-reducing technologies - oil & gas and renewables - TGS knows that being carbon neutral is crucial in helping customers achieve their net-zero goals. Consequently, TGS looks to its own suppliers to provide products and services that fulfill carbon neutrality criteria.
ECIU's Net Zero Tracker monitors the long term 2050 targets and commitments of several different countries, states, cities and significant global companies. [https://eciu.net/].
For our part, TGS has been reporting our Scope 1 and 2 emissions since 2018. At the start of 2021, we set our target to be net-zero for Scope 1 and 2 emissions by 2030. These emissions are largely tied to the natural gas usage and electricity usage in our offices and data centers, with our data centers generating the majority of our emissions. Emissions reduction is a corporate goal adopted by our board of directors and company and the success of our emissions reduction efforts is tied to executive compensation through our long-term incentive program.
To target our Scope 1 and 2 emissions, which totaled 13,971 mt CO2e in 2020, we are taking a multi-faceted approach that includes utilizing more energy-efficient equipment, transitioning to and utilizing renewable energy sources, and offsetting emissions. We have partnered with Google Cloud and 25% of our 2020 data processing work by our Imaging department was performed in their carbon neutral data centers. We are also consolidating our data centers to our main data center in Houston and retiring older, less energy-efficient equipment in favor of more energy-efficient equipment that provides 78% power efficiency improvement. Therefore, while our on-premise computing capability increased by 50% in 2020, our on-premise power consumption only increased by 27%. Finally, we are looking to transition our offices to renewable energy sources. Our corporate headquarters in Norway is already powered by hydropower, and we are looking at transitioning our operational headquarters in Houston to solar power.
In 2019, we began reporting our emissions related to our seismic operations, which we consider to be Scope 3 , on a project-by-project basis. We recognize that it will take an industry collaboration to find innovation and practical ways to address emissions related to seismic operations. To that end, we are taking an active role in the International Association of Geophysical Contractors (IACG)’s emissions working group, which includes vessel contractors, multiclient companies, and clients, to set the standards for how our industry reports emissions related to seismic operations
Our board of directors is active in overseeing TGS’ ESG strategy and, to ensure the success of our climate change efforts, we established a separate executive position to focus on TGS’ ESG priorities.
As we further hone our strategy for a net-zero future, we have set a target of reducing our scope 1 and scope 2 emissions year-on-year with the goal of becoming net-zero in scope 1 and scope 2 emissions by 2030. Later this year, we will be publishing the results of our climate change scenario analysis that includes both a 2°C and lower scenario based upon the Paris Agreement and is in line with the Task Force on Climate-related Financial Disclosures’ framework. To advance our work on our scope 3 emissions, we are working to incorporate a climate-related impact analysis into our internal investment decision-making process. As a good corporate citizen that recognizes the value of continually developing long-term ESG activities, our commitment to net-zero will continue unabated.
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