Annual Report and Accounts 2009 - BG Group

36
Directors’ Report: Business Review
The way we work continued
Society
Business Principles
• We work to ensure that neighbouring
communities benefit from our presence
on an enduring basis
• We listen to neighbouring communities
and take account of their interests
• We support human rights within our
areas of influence
Environment
Business Principles
• We make a positive contribution to the
protection of the environment
• We go beyond compliance with local
environmental regulation to meet
internationally accepted best practice
• We reduce to the minimum practicable
any adverse effects of our operations on
the environment
www.bg-group.com
Achievement of BG Group’s long-term
business objectives depends to a significant
extent on the support of host communities,
governments and other stakeholders with
a local interest in the Group’s activities.
Many of the Group’s operations are located
in areas with complex social, developmental
and economic challenges. BG Group aims
to contribute to the socio-economic aspects
of the broader sustainable development
agenda of host communities and
governments, as encapsulated within the
Group’s Social Performance governance
framework and Standard.
The governance framework consists of a policy
statement, the Social Performance Standard
(together with implementation guidelines
and tools) and an assurance process.
The Social Performance Standard is closely
aligned with the International Finance
Corporation (IFC) Policy and Performance
Standards on Social and Environmental
Sustainability, which are the industry
benchmarks for good practice. The
BG Group Social Performance Standard is
integrated into the Group’s core business
processes, including the development
project value assurance process.
Climate change is an issue of critical global
concern. The challenge for society is to meet
growing energy needs while managing the
growth of, and ultimately reducing,
greenhouse gas (GHG) emissions.
Although non-hydrocarbon energy sources
are growing in scale and significance, they
currently meet only a small proportion of overall
global energy demand. Fossil fuels will therefore
continue to be the predominant global energy
source in the near and medium-term future.
GHG emissions from natural gas combustion
are on average 22% lower than emissions from
oil use and 40% lower on average than coal.
BG Group believes that natural gas is an
essential ‘bridge’ fuel, helping to meet growing
global energy needs while also contributing to
strategies to limit GHG emissions.
BG Group’s strategic analysis of the business
risks arising from climate change includes an
assessment of the physical risks to operations,
as well as the potential impact on financial
performance arising from actual or proposed
regulatory schemes to disincentivise or cap
GHG emissions.
The Group also works to minimise its own
GHG emissions in its operations, reporting
During the year, BG Group continued
to implement the standard across all
Group-operated businesses, with training
and capability development in Australia,
Bolivia, Brazil, India, Italy and Nigeria. By
the end of 2009, the standard had been
introduced in the 10 priority assets assessed
to have the highest levels of social
performance exposure, and good progress
was being made towards compliance.
The Social Performance Standard requires
BG Group businesses to undertake a number
of critical activities including the development
of a socio-economic baseline assessment, and
the creation of a detailed Social Performance
implementation plan.
The socio-economic baseline assessment
gathers quantitative and qualitative data
on a range of factors, including health,
education, employment, mortality and
access to infrastructure, which indicate the
current status of the community. Generally
undertaken by independent experts, the
baseline assessment provides a blueprint
for the management of all aspects of Social
Performance, helping the Group’s businesses
to identify and manage potential risks which
could adversely affect the communities
in detail on progress against its GHG
reduction target in its annual Sustainability
Report, which can be found online at
www.bg-group.com/sustainability
In 2009, operations directly under the control
of BG Group emitted 8.6 million tonnes
carbon dioxide equivalent (CO2e), a decrease
of 0.2 million tonnes (2%) compared to 2008.
The Group also measures CO2e emissions
on an equity-share basis, reporting those
emissions as a proportion of the total in line
with the Group’s equity share in the operation,
regardless of control. Equity share emissions
from BG Group-operated and non-operated
activities were 13.9 million tonnes CO2e,
approximately the same as the 2008 emissions.
In 2007, BG Group committed to
improvements to existing operations and
proposed new projects in order to achieve a
sustainable reduction in the Group’s GHG
emissions of one million tonnes by 2012. The
target reduction is measured against a
‘no-action’ base case across existing and
planned operations between 2007 and 2012.
As at 31 December 2009, BG Group had
achieved a sustainable GHG reduction of