Williams Reports Progress on Environmental Performance Metrics

Rhea-AI Summary

Williams (NYSE: WMB) has released its 2023 Sustainability Report, highlighting progress in environmental performance and management. Key achievements include:

1. Advancing towards a 30% reduction in intensity-based carbon emissions by 2028 from 2018 levels.

2. Outperforming the 5% methane emissions reduction target.

3. Joining OGMP 2.0 and setting a Scope 1 methane intensity target of 0.0375% for operated assets by 2028.

4. Executing NextGen Gas strategy and supporting two DOE-selected hydrogen hubs.

5. Receiving top sustainability ratings, including inclusion in the DJSI North America and World indices.

The report, prepared using GRI Standards 2021, covers operations from January to December 2023 and received third-party assurance for select data.

Positive

• Outperformed 5% methane emissions reduction target
• Set ambitious Scope 1 methane intensity target of 0.0375% by 2028
• Awarded two DOE CarbonSAFE Program grants for carbon storage
• Included in DJSI North America and World indices for multiple consecutive years
• Received top score in S&P Global's 2023 Corporate Sustainability Assessment for North America Oil & Gas Storage & Transportation industry
• Upgraded to 'A-' score on 2023 CDP Climate Change Questionnaire
• Maintained 'A' rating from MSCI
• Ranked first in Energy & Utilities industry by Newsweek's America's Most Responsible Companies 2024

Negative

• None.

Environmental Sustainability Expert

Williams' latest Sustainability Report showcases significant progress in environmental performance, particularly in greenhouse gas emissions reduction. The company's commitment to decrease intensity-based carbon emissions by 30% from 2018 by 2028 aligns with the Science Based Targets initiative, demonstrating a proactive approach to climate change mitigation. This target, coupled with their outperformance in methane emission reduction, positions Williams as a leader in the midstream sector's sustainability efforts.

The company's participation in OGMP 2.0 and its ambitious Scope 1 methane intensity target of 0.0375% by 2028 are particularly noteworthy. This target is more stringent than the EPA's requirements, indicating Williams' dedication to exceeding regulatory standards. Such commitments can potentially lead to improved operational efficiency and reduced environmental impact, which may translate to long-term cost savings and enhanced stakeholder trust.

Williams' involvement in hydrogen hub projects and carbon storage initiatives demonstrates a forward-thinking approach to diversifying its business model in line with the energy transition. These projects could position the company favorably in emerging low-carbon markets, potentially opening new revenue streams and mitigating risks associated with traditional fossil fuel infrastructure.

The company's improved CDP Climate Change Questionnaire score and consistent inclusion in sustainability indices like DJSI reflect positively on its ESG performance. These recognitions can enhance Williams' appeal to ESG-focused investors and potentially lower its cost of capital. However, investors should note that while these achievements are commendable, the long-term financial implications of these sustainability initiatives remain to be seen in the context of the evolving energy landscape.

Financial Analyst

Williams' sustainability report, while not providing direct financial figures, offers insights into the company's strategic positioning and risk management that are relevant to investors. The company's focus on decarbonization and methane emission reduction aligns with increasing regulatory pressure and market demands for cleaner energy solutions. This proactive stance could help Williams avoid future compliance costs and potential penalties, thereby protecting its bottom line.

The investment in NextGen Gas and hydrogen projects demonstrates Williams' efforts to diversify its revenue streams and adapt to the changing energy landscape. While these initiatives may require significant upfront capital, they position the company to capitalize on emerging markets and potentially secure long-term contracts in low-carbon energy infrastructure.

Williams' consistent high rankings in sustainability indices and improved CDP scores can enhance its attractiveness to ESG-focused investors, potentially broadening its investor base and improving access to capital. This could lead to more favorable financing terms and a lower cost of capital, which would positively impact the company's financial performance.

However, investors should consider the potential short-term costs associated with implementing these sustainability initiatives. The report doesn't provide specific financial allocations for these projects, making it challenging to assess their immediate impact on profitability. Additionally, the long-term returns on investments in emerging technologies like hydrogen and carbon storage remain uncertain and may carry technological and market risks.

Overall, while the sustainability report paints a positive picture of Williams' environmental stewardship, investors should closely monitor how these initiatives translate into financial performance in upcoming earnings reports. The company's ability to balance sustainability investments with maintaining strong operational efficiency and shareholder returns will be important for its long-term financial health.

TULSA, Okla.--(BUSINESS WIRE)-- Williams (NYSE: WMB) today released its latest Sustainability Report, which provides a comprehensive review of environmental performance and management and details the company’s efforts on social and governance topics for the 2023 reporting year. An electronic version of the report is available at www.williams.com/sustainability.

“Sustainability is central to our natural gas-focused strategy at Williams, and this report illustrates our core values in action as a best-in-class operator in the many communities we touch across the country,” said Williams President and CEO Alan Armstrong. “As demand for natural gas accelerates, Williams is applying innovative technology and operational improvements to further decarbonize our industry while reliably serving growing energy needs and delivering long-term returns for shareholders.”

Highlights of the report include the following:

Climate

• Progress on Williams’ updated greenhouse gas emissions reduction goal to decrease intensity-based carbon emissions by 30% from 2018 by 2028, which aligns with shareholder priorities and is informed by the Science Based Targets initiative (SBTi)
• Reduced methane emissions to outperform our Annual Incentive Program target of a 5% reduction from a 3-year (2020-2022) average
• Became the first large-scale midstream company in the U.S. to join OGMP 2.0, an international methane emissions reporting initiative, and approved a Scope 1 methane intensity target of achieving a 0.0375% methane intensity of operated assets by 2028 – a goal that is lower than the threshold established in the EPA's methane intensity rulemaking

Innovation

• Continued executing strategy to commercialize NextGen Gas, providing full supply chain measurement and certification of methane intensity from production through delivery
• Supporting two regional hydrogen hubs – one in the Pacific Northwest and the other in Appalachia – which the U.S. Department of Energy (DOE) selected for investment and development
• Awarded two grants under the DOE’s Carbon Storage Assurance Facility Enterprise (CarbonSAFE) Program and partnered with the University of Wyoming to evaluate permanent carbon storage

Community and employee engagement

• Volunteered at 92 nonprofit organizations in 19 states during Williams Volunteer Week
• Contributed more than $13.1 million to 2,142 organizations, including 348 first responder agencies, across 47 states and Washington, D.C.
• Conducted 589 total unique engagements with local community stakeholders
• Supported 10 Employee Resource Groups with total membership exceeding 1,350 employees

Sustainability Ratings and Rankings

• 2024 Dow Jones Sustainability Index (DJSI): named for the fourth consecutive year to the DJSI North America index and for the third consecutive year to the DJSI World index
• S&P Global Corporate Sustainability Assessment: received the top score in the 2023 Corporate Sustainability Assessment (CSA) in the North America Oil & Gas Storage & Transportation industry and the second highest score in the Oil & Gas Storage & Transportation industry globally for DJSI-eligible companies
• 2023 CDP Climate Change Questionnaire: received an upgraded ‘A-’ score on the 2023 CDP Climate Change Questionnaire, ranking well above the oil and gas storage and transportation sector (‘C’) and North American regional (‘C’) averages
• MSCI: maintained an ‘A’ rating
• Named one of America’s Most Responsible Companies 2024 by Newsweek magazine, ranking first in the Energy & Utilities industry

Williams’ 2023 Sustainability Report covers operations from January 1 through December 31, 2023, unless otherwise noted, and was prepared in accordance with the Global Reporting Initiative (GRI) Standards 2021, including GRI 11: Oil and Gas Sector Standard. The report references the Sustainability Accounting Standards Board (SASB) Oil & Gas – Midstream Standard, Task Force on Climate-related Financial Disclosures (TCFD), the United Nations Sustainable Development Goals (SDGs) and IFRS Foundation S2 Climate-related Disclosures. In addition, Williams’ 2023 Sustainability Report received independent third-party limited assurance from ERM Certification and Verification Services (ERM CVS) for select 2023 greenhouse gas emissions, pipeline integrity and safety data.

About Williams

Williams (NYSE: WMB) is a trusted energy industry leader committed to safely, reliably, and responsibly meeting growing energy demand. We use our 33,000-mile pipeline infrastructure to move a third of the nation’s natural gas to where it's needed most, supplying the energy used to heat our homes, cook our food and generate low-carbon electricity. For over a century, we’ve been driven by a passion for doing things the right way. Today, our team of problem solvers is leading the charge into the clean energy future – by powering the global economy while delivering immediate emissions reductions within our natural gas network and investing in new energy technologies. Learn more at www.williams.com.

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Source: Williams

FAQ

What is Williams' (WMB) greenhouse gas emissions reduction goal for 2028?

Williams (WMB) aims to decrease intensity-based carbon emissions by 30% from 2018 levels by 2028, aligning with shareholder priorities and informed by the Science Based Targets initiative (SBTi).

How did Williams (WMB) perform in methane emissions reduction in 2023?

Williams (WMB) outperformed its Annual Incentive Program target of a 5% reduction in methane emissions from a 3-year (2020-2022) average.

What is Williams' (WMB) Scope 1 methane intensity target for 2028?

Williams (WMB) has set a Scope 1 methane intensity target of achieving a 0.0375% methane intensity of operated assets by 2028, which is lower than the threshold established in the EPA's methane intensity rulemaking.

How is Williams (WMB) involved in hydrogen hub development?

Williams (WMB) is supporting two regional hydrogen hubs selected by the U.S. Department of Energy for investment and development, one in the Pacific Northwest and another in Appalachia.

What sustainability indices has Williams (WMB) been included in for 2024?

Williams (WMB) has been named to the Dow Jones Sustainability Index (DJSI) North America for the fourth consecutive year and the DJSI World index for the third consecutive year in 2024.