Health, Safety and Environmental (HSE) performance contributes to “top line ” value creation, which has to do not only with brand premiums and new products, but time to market and even access to markets - a company’s social license to operate. Meeting customer environment and sustainability needs creates opportunities for new products / services / business models, i.e. value creation. 
 

Furthermore, there is a “bottom-line” capital efficiency component to HSE - compliance upgrades and asset life considerations for existing assets and appropriate valuation of carbon, compliance and legacy liabilities and assets for acquisitions. 

“Measuring Return on Environment (RoE)” (SPE Paper # 111982) chronicles a meta-analysis of environmental metrics in the oil and gas industry. The paper summarizes a business analytics approach to defining a common language for measurement and communication of performance HSE metrics that position company’s to:

 

More and more, HSE aspects are being considered in project financing in the capital markets (look at the World Bank – International Finance Corporation guidance and the Equator Principles – a benchmark for the financial industry to manage social and environmental issues in project financing). HSE performance is highly regarded by Analysts as a proxy indicator of the overall Quality of Management and presents a risk profile for investment analysis.

 

The SPE Paper written by MetaVu summarizes oil and gas industry trends and best practices of environmental and sustainability metrics for operators in the upstream, midstream and downstream sectors. Further, the paper discusses how to utilize metrics to drive integration of the HSE function throughout the O&G Value Chain, from entry strategy, through exploration, production, marketing distribution and exit strategy.