How ESG Is Changing the Oil & Gas Industry

When Sean Eby considers the complex subject of environmental, social and governance standards, his thoughts start somewhere surprisingly simple: the refrigerator in his kitchen. 

Eby often thinks about what ESG means at the individual level, and the spoiled lettuce in his crisper drawer is a prime example that is relatable to many people. After all, the average U.S. household wastes $1,866 worth of food each year, according to the American Journal of Agricultural Economics.

“It’s terrible to throw food away,” Eby said. “It’s not just better for the environment to waste less food, but it also saves you money. These are good things to do from a social and environmental standpoint, and they are also good for your pocketbook.”

The same principles apply to ESG solutions on a corporate level, which Eby helps implement by building industrial optimization tools at ENGAGE. Its fintech products help industrial clients improve efficiency, and as a byproduct, improve their ESG measures. The company currently serves customers in waste management, renewable energy, oil and gas, and the government, helping reduce metaphorical spoilage in the figurative fridges of each of these industries.

ESG is big business. According to Bloomberg, $120 billion went to ESG-focused exchange-traded funds in 2021, which was more than twice the ESG investment seen in 2020. For two years, investors have “increased their bets on companies deemed to have the highest environmental, social and governance credentials.” 

This increased investment bodes well for ENGAGE, but that doesn’t mean the work is easy. Built In Colorado connected with three key leaders at ENGAGE to learn how they address the stigma of working with oil and gas companies and why ESG work is important to them. 

Tell us about your background.

Implementation and ESG Advisor Farhana Morales: I’ve been in oil and gas for 14 years, since moving to Colorado from the U.K. The industry has been amazing in the opportunities that it has opened up for me. People always have this idea of the industry being run by a certain type of person and wonder how I fit into the industry as a woman of color. My response is, “If someone like me doesn’t work here, how are we going to change the industry?” I find it challenging and fun to be in the industry and attempt to make changes through environmental, social and governance initiatives. 

If someone like me doesn’t work here, how are we going to change the industry?”

Eby: I come from a software engineering background. Before coming on to run our engineering teams, I was energized by meeting our CEO and co-founder, and the tech stack was also appealing. I’ve co-founded a couple of successful companies and like to spend my time in early and growth-stage engineering and product development teams, which is why ENGAGE was a great fit. I’m also the house mixologist.

VP of Marketing Ross Miller: I was the first non-founding employee hired at ENGAGE. That’s unique for a technology company, considering I’m in marketing. We obviously had to build technology that works, but we were very brand-focused from the beginning stages. 
 

Why is accurate and transparent ESG reporting important?

Ross: The investment community is demanding it. They are pushing money to companies that are able to show impact. I find it funny that some people think ESG is some sort of conspiracy to push a political agenda. Making the world cleaner is important to all of us, however ESG initiatives also have an impact on making companies more money. It’s built on efficiency and making a company better at what it does. The truth is that the investment community wouldn’t dictate that ESG initiatives be measured and improved upon if they’d make less money doing it.

Morales: On the data and reporting side, it will be more streamlined in the next five years. It’s difficult for companies in different industries to present their ESG data in a way that you can compare apples to apples. You see companies like Shell or BP present data against a real estate company and you can’t help but wonder if the comparison is accurate. I advise clients to just start somewhere with reporting to initiate a baseline of data, even if it looks bad, because then at least you are being transparent and showing that you want to make a difference. Investors and the public expect change over time, so companies should get comfortable with reporting. I consider this journey a marathon rather than a sprint.

Ross: Change can’t happen if you don’t know where the starting point is. It’s important for us to help companies figure out where their baseline is and have authenticated metrics to improve upon. Those are the keys we are giving our clients, and it’s disrupting the industry.
 

Why is it important to track ESG metrics?

Morales: ESG has been around for a long time, in one form or another, in all industries. The new development is that it is now under this umbrella term of ESG. For example, many companies have kept health and safety metrics for months, years or decades; now it’s housed under the umbrella that is ESG. The same is true for environmental or diversity metrics. 

Ross: ENGAGE didn’t set out to be an ESG company. In fact, during the first year, nobody here could have told you what the acronym meant. Our clients were coming to us and telling us that we were an ESG company because of the data we were collecting and how we were making their services more efficient. These were side effects that we didn’t initially set out to achieve. 

Eby: ESG ties into the general idea of conscious capitalism. Companies focused on these areas unlock access to other types of capital. Investors are looking for companies that are not only monitoring ESG, but are actually making progress against the metrics and are not only paying lip service. It’s important not only for oil and gas customers, but any industry vertical.

With growing pressure for oil and gas companies to be accountable for their impact on the environment, what’s your perspective on why ESG metrics matter for your customers?

Morales: If you look at ESG in the oil and gas industry right now there are gold standard companies, some in the middle and some laggards. The laggards are watching to see what everyone else is doing, wondering if ESG is going away or if they need to invest in it. If you look at the gold standard companies, they are being progressive; they’re focusing on sustainability and hiring diversity and inclusion officers. The laggards, if they don’t catch up, will probably have to merge or get acquired. 

Ross: There is a bit of a negative perception in the energy sector; people are frustrated with gas prices or think the industry is negatively impacting our world. I came to ENGAGE without any oil and gas experience, but I have seen how disruptive we are, in a good way. We won the High Impact Cleantech Company Award from the Colorado Cleantech Industries Association in 2021. It highlights that we are doing good for the environment, and there is merit to what we do. People may have issues with oil and gas, but we are doing good work.

What drew you to ENGAGE? And how do you respond to job candidates who may have reservations about working in the oil and gas industry?

Ross: I knew I wasn’t a great fit for corporate America because I have a tendency to get bored if I do the same tasks over and over. My passion is in being able to make an impact at the companies I work with. I’ve been able to do that since the beginning and can continue to do that even as we grow. I love the people I work with and I love not having a typical day.

We are a technology company first; we just happen to work with those clients because our founders had that background. If you fast forward five years, we will be a universal industrial fintech company that helps provide transparency and optimize workflows. We’re excited about opening up and working with different industries, and that’s one of the reasons we’re bringing on new talent. 
 

In five years, we will be a universal industrial fintech company that helps provide transparency and optimize workflows.” 
 

Eby: For me, it’s important to make something that people want. That’s a rallying cry for software engineering and product development teams. There’s a lot of joy that comes from building a feature or product and putting it into the world and seeing it get used. That’s what keeps us going, and it’s unlimited job security. 

For some people, oil and gas is just a dealbreaker. But it’s not so clearly defined at ENGAGE. Though we have a high number of oil and gas customers, if we were to categorize our company it would go in the tech industry, not the oil and gas industry. 

Morales: I’ve been in the industry for all these years and if I didn’t believe I could make an impact — whether it is in the industry, in a company, or on an individual level — I would have never joined. Instead of complaining about an industry from the outside, why not help improve it while being in it? It has not been an easy journey, by any means, but I am a change leader and need to make an impact.  

What would you say to someone considering working at ENGAGE?

Eby: We are still in the growth phase. We are small enough where people are empowered to choose how they and their team are going to accomplish something. There’s an incredible amount of flexibility.

Morales: We have a flexible work-at-home policy that I am currently taking advantage of due to the pandemic. So it’s clear to me that the company cares about keeping you and your family safe. I would also say, “Get ready for a rollercoaster ride,” as every day is a new adventure with helping clients achieve their goals, and that is what keeps it interesting and varied.

Ross: People are encouraged to be entrepreneurial in their roles, from the bottom to the top. Part of our culture is to never discourage anyone from bringing new ideas to the table. It takes a certain drive to excel in that startup environment. We look for people who want to work outside of the box and make things better.