CNX Resources Corp. released its 2020 corporate responsibility report on July 22 announcing its net carbon-negative achievement, a rarity for the oil and gas industry, the shale gas producer’s top executive said, despite the current ESG buzz.

“Many in the energy industry and capital markets continue to speak in the abstract and distant future about ESG, sustainability, resiliency, carbon intensity and the industrial logic of consolidation,” commented CNX President and CEO Nick DeIuliis in a company release.

However, according to DeIuliis, CNX pursues a different path, which is “one that prioritizes the development of our extensive existing asset base over further scale, and that focuses on transparency, measurable outcomes, current and nearer term deliverables, and long-termism defined by growing per-share intrinsic value.”

CNX Resources is an independent natural gas development, production and midstream company headquartered in Canonsburg, Pa. At year-end 2020, the company, which operations are centered in the major shale formations of the Appalachian Basin, had 9.55 Tcfe of proved natural gas reserves.

On July 22, CNX Resources released its annual corporate responsibility report detailing ESG achievements from the past year. Key highlights from this year’s report include:

Environmental and Safety

  • CNX is net carbon negative for Scope 1 and 2 emissions—unique in the natural gas upstream and midstream sectors, the company noted in its release;
  • Annual abatement of venting of over 300,000 metric tons of third-party methane (which equates to approximately 7.5 million metric tons of CO₂e emissions);
  • Adoption of the Task Force on Climate-related Financial Disclosures framework and Sustainability Accounting Standards Board standards;
  • Employee safety Total Recordable Incident Rate (TRIR) of 0.0 in 2020;
  • Contractor safety TRIR of 0.92 in 2020;
  • Recycled 99.6% of produced water in the company’s core operating area in 2020; and
  • Management compensation now tied to the company’s methane intensity footprint.

Social Responsibility

  • Median compensation package over $150,000—top among regional public companies, according to CNX;
  • $30 million invested in local communities over last 10 years;
  • New $30 million philanthropic commitment and establishment of CNX Foundation to drive regional progress;
  • Establishment of mentor academy for young adults in local, underserved communities;
  • No layoffs, paid front line worker bonuses, and no acceptance of government assistance during COVID;
  • Half of CEO direct reports are diverse;
  • In 2021, introduction of a cross-training rotation program for diverse employees, comprehensive review of compensation programs with emphasis on pay equity, and diversity and inclusion training of all employees; and
  • CNX targets 33% diverse employee workforce by 2024 and 40% by 2026.

Governance

  • First to provide multiyear, transparent financial guidance via a 7-year free cash flow generation plan;
  • CEO pay for performance philosophy with 90% of compensation at-risk;
  • Insider ownership at 2.5% of outstanding shares;
  • Stock retention requirements for executive management;
  • Small, focused board of directors with diversity of skills, professions and gender; and
  • Full board participation in Environment, Safety and Corporate Responsibility Committee.

“Our tangible, impactful and local ESG approach coupled with our non-replicable asset base,” DeIuliis continued in his statement, “results in a net carbon-negative footprint today, a truly sustainable business model of a low-cost producer that regularly returns capital to shareholders and the opportunity to pursue exciting new opportunities for further methane capture and abatement.” 

“We believe we are the rare combination of tangible, impactful and local ESG results coupled with low-risk free cash flow per-share generation that presents the best-in-class option for ESG-focused investors,” he added. 

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