Environmental rating of oil and gas companies in Russia: How assessment affects environmental transparency and performance

Business Strategy and the Environment. 2018. Vol. 27. No. 7. P. 1023–1038.

Shvarts E., Пахалов А. М., Книжников А. Ю., Аметистова Л. Е.

The article discusses the evolution and current state of transparency of environmental performance data in the Russian Oil and Gas sector. We build upon our first‐hand experience in a transparent, publicly available information and third‐party‐verified rating system. Based on 2014–16 successive annual ratings, we conclude that implementing “soft” responsibility mechanisms can improve environmental responsibility standards and transparency in the oil and gas industry. At the same time, in terms of improving environmental performance of oil and gas companies it is reasonable to assume an emerging trend. Its full realization will require (1) longer rating time, including that for public exposure to misleading environmental performance information and the use of poorly verified nonfinancial reporting; (2) application of independent analysis of satellite monitoring information to the professional audit and public verification of nonfinancial reporting; and (3) sophistication of guidelines for professional audit and public verification of nonfinancial reports.

Keywords: rating, information disclosure, environmental management, environmental responsibility, environmental impacts, Russian oil and gas industry