Vitol's ESG journey and our ambitions and plans for the future

Interview with Gerard Delsad, Chair of?Vitol's ESG Committee

What does ESG mean to Vitol?

ESG equates to good business practice. It is good business to ensure that operations are managed safely and responsibly, that our workforce is diverse and that stakeholder views are both canvassed and considered. Increasingly, in the context of the energy transition, it is also good business to think strategically about the implications of the transition on the company and how this will evolve in order to mitigate risks and identify and capture opportunities.

Over the years, we’ve tackled many of the issues related to ESG in an informal manner and with various degrees of granularity across our business. But as the business evolved it became evident that a more formalised approach was required. Co-ordinating an ESG approach through the ESG committee that we created in 2018 has enabled us to be more strategic and thoughtful, as well as providing the framework for us to ensure ESG is applied in a consistent manner across all our operations, according to best practice.

Why have you only recently started reporting on ESG?

We’ve always been mindful of ESG considerations and discussed these with key stakeholders, such as our financing banks, co-investors or customers. For us, 2021 was the right time to consolidate our thinking and performance into a formal document. But 2021 was just the start; putting frameworks in place, collating and verifying data all takes time and we intend to build on this year-on-year to provide more transparency about what we are doing and our performance.

What has surprised you the most since you started on this ESG journey?

The internal response. When we began this journey, only a few people were familiar with the concept of ESG. But as we’ve explained it and as the value has become apparent, the buy-in and genuine interest from employees to participate in this journey has been really appreciated.

How are your ESG efforts structured?

We have a six-pillar strategy covering ESG, human rights, energy transition, education and training, risk management and reporting. We have made some good progress over the last three years under each pillar, but there is still much to do to embed our E&S framework across all of our activities.

Has ESG impacted the way you manage the business?

On the reporting side, the implementation of a more formalised structure has enabled us to monitor performance across the company better, highlighted potential areas of weakness as well as areas where we can improve. The changing energy mix is the greatest challenge the company has faced and is impacting people across multiple functions from finance, through to operations, shipping and trading. What ESG and related reporting guidelines have done is give us a framework to articulate our thinking. Every conversation with stakeholders begins with questions about our approach to ESG!

Where does Vitol have the greatest room for improvement?

Across the board we expect to improve continuously; the goalposts will, quite rightly, keep moving and ever higher standards will be expected of us. More specifically, areas that require a focus in the near term are diversity and human rights.

Regarding diversity, we simply do not have enough women in senior commercial roles. Regrettably, this problem is common across our industry so hiring senior women is not a solution. Instead we are focusing on hiring, developing and nurturing female talent at an earlier stage in their careers.

For human rights we began formalising our approach in 2019. Last year we hired our first human rights manager and we trust this will enable us to improve our approach and reporting around human rights.

Are there any downsides to a more formalised approach to ESG?

Not thus far. I believe the key factor is to make sure that the frameworks are relevant and useful for the business. There is no point in reporting if it is not truly relevant and representative and if it does not have a positive impact on underlying business operations.

What aspects of ESG are you (personally) passionate about?

I care about the business and our role in society. It is imperative that we do not cause harm. On a personal level, I am excited by the potential we have to use our business to improve lives and accelerate the energy transition. The transition will require capital and if we deploy ours wisely, we can build a sustainable future.

You can find our full ESG Report 2021 here ESG Report 2021 - Vitol