Crowe TXBizCon 2022: ESG and the energy industry

Devin Hall, Christopher McClure
Crowe TXBizCon 2022: ESG and the energy industry

At Crowe TXBizCon 2022, specialists discussed the latest in the ESG and energy industry. Here are the highlights.

In this TXBizCon session, we heard from Devin Hall, Crowe energy managing partner, and Chris McClure, Crowe partner and ESG services leader, on the current environmental, social, and governance (ESG) landscape.

Devin Hall spoke about the Inflation Reduction Act of 2022 (IRA) and energy tax incentives. During the session he touched on: 

  • A new, game-changing option in tax credit administration that allows tax credits to be sold or transferred to a third party, which allows many taxpayers to monetize the credits instead of needing a tax equity partner, which was the precedent
  • Direct payment opportunities for entities that implement IRA-related initiatives, such as solar panels on buildings or charger stations in parking garages (the payouts are available even to historically tax-exempt organizations)
  • Prevailing wage and apprenticeship requirements 

You can read more of Devin’s insights here. For even more information on the IRA in the energy industry and potential tax savings, read this guide.

Deep specialization in the energy industry
Crowe specialists understand the challenges, market needs, and opportunities in the energy landscape. Get resources to help guide your strategy from every angle.

Chris McClure gave a refresher on the broad basics of ESG topics for the energy industry. While ESG is becoming more and more familiar to the industry at large, it's important to remember these key topics and trends:

SEC proposed rules

In March 2022, the Securities and Exchange Commission (SEC) released 500 pages of proposed rules for climate-related disclosures for public registrants. The proposal included five major types of disclosures that could pertain to public registrant reporting in the future:

  1. How an entity governs and manages climate-related risks
  2. Actual or material impacts of climate-related risks on business, strategy, and outlook
  3. Quantitative measures of greenhouse gas (GHG) emissions
  4. Climate-related targets and goals, scenario analyses, and transition plans, if applicable
  5. Footnote disclosures with financial impacts

Energy sector regulations

The energy sector increasingly is affected by the proliferation of major regulations, including but not limited to:

  • Climate risk and GHG emissions
  • Conflict minerals and extended mineral compliance
  • Anti-human trafficking/forced labor
  • Global mandatory supply chain due diligence
  • Uyghur Forced Labor Prevention Act (UFLPA) 
  • Chemical compliance
  • EU Corporate Sustainability Reporting Directive

Your ESG strategy

Lastly, here's a breakdown of what you could be doing now for your ESG strategy, if you aren't already:

  • Governance
    Understand your organizational purpose and develop ESG objectives and governance mechanisms to support a strategic framework. Educate your board and management.
  • Implementation
    Form a cross-functional team with representatives from sustainability, risk, legal, financial reporting, IT, internal audit, and others to properly assess and manage ESG processes and reporting.
  • Materiality assessment/stakeholder engagement
    Engage with key stakeholders to understand ESG priorities and identify important topics for disclosure that align to your business strategy.
  • Data and process management
    Evaluate data maturity and reporting processes to identify critical data gaps based on potential key performance indicators and reporting needs.
  • Internal audit
    Integrate sustainability into the internal audit plan. Evaluate or establish appropriate controls under the framework established by the Committee of Sponsoring Organizations of the Treadway Commission.
  • Strategy integration
    Integrate ESG objectives into strategic planning and resource allocation and priority ESG topics into enterprise risk management. 

Keeping up with ESG standards can be daunting. These are just a few important steps to take, but the required measures may be different depending on your organization's unique needs.

If you're looking to take your ESG strategy to the next level, explore our resource page to learn more. Don't hesitate to reach out to our specialists for tailored insights. 

Listen to the full session

Key insights for energy leaders

Make forward-thinking decisions about your ESG strategy

Access our resource hub for the latest in ESG and learn more about how to confidently and responsibly fulfill your business purpose.

Get the resources

ESG resources

Contact us

For additional information on energy tax incentives or other ESG topics, contact our team of specialists.
Devin Hall
Devin Hall
Managing Partner, Energy
Chris McClure - social
Christopher McClure
Partner, ESG Services Leader