CERAWeek by S&P Global — an annual global energy conference focusing on the industry's biggest goals and challenges — began on Monday in Houston, Texas. The conference brings together all manners of professionals, including senior executives, government officials, academics, and more. One of the main overarching themes for the conference is the energy transition and how companies and governments can join in on that transition.
S&P Global (SPGI) CEO Douglas Peterson — whose company organizes the conference — joins Yahoo Finance's Julie Hyman to discuss the future of energy transition, benefits from President Biden's Inflation Reduction Act, and other prevalent themes part of the CERAWeek conference's overall discourse.
Peterson comments on recent rules passed by the Security and Exchange Commission (SEC) for companies to disclose environmental and climate goals and improve transparency over those goals: "I think it's a really good idea to have consistent standards and, first of all, I'm going to say globally. There's an organization called the International Sustainability Standards Board, the ISSB, that is looking at ways to have consistent standards for disclosure about climate action around the globe, and the US needs to get on board. And the US actually is a member of the ISSB, which comes from the IFRS [International Financial Reporting Standards Foundation]. I was encouraged that the rule that came out was one where both the environmentalists and some of the others were against it. Means that maybe they're starting to hit the right balance on it."
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Nicholas Jacobino
Video Transcript
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JULIE HYMAN: You're watching Yahoo Finance. I'm Julie Hyman, here in Houston, Texas, at the CERAWeek by S&P Global conference. It is the big annual gathering for the oil and gas industry.
And as we talked about earlier, they're talking about all kinds of themes. The energy transition, all the M&A that's been going on, AI, of course. I'm here with this CEO of the host of the conference, S&P Global, Douglas Peterson is here with me.
DOUGLAS PETERSON: Great, Julie, thanks for being here. But especially thanks for being here for CERAWeek. You're going to have a fantastic opportunity.
JULIE HYMAN: I am very--
DOUGLAS PETERSON: --so many people.
JULIE HYMAN: So talk to us about what you see as some of the big themes of the conference, and what you're most excited to hear about as you're here.
DOUGLAS PETERSON: You mentioned oil and gas, and traditionally, this was an oil and gas conference. It goes back over 40 years. But over the last few years, it's transitioned into a conference about energy transition.
And the themes are, some people are going to talk about molecules, about hydrogen and how things are changing. Energy transition. But this is a real conference about revolution, about innovation, and how the energy landscape is going to look many, many years going forward.
JULIE HYMAN: Now, you guys help measure how that is all working, right. You have different scores for companies, you're a data company, and there was a new rule that was proposed by the Securities and Exchange Commission to try to improve transparency and reporting-- some new reporting requirements put on companies having to do with climate.
A court, actually, just paused the implementation of that rule on Friday. But I'm curious what your view is. Do you think that it's a good idea and is it helpful?
DOUGLAS PETERSON: I think it's a really good idea to have consistent standards and, first of all, when we say, globally. There's an organization called the International Sustainability Standards Board, the ISSB, that is looking at ways to have consistent standards for disclosure about climate action around the globe, and the US needs to get on board. And the US, actually, is a member of the ISSB, which comes from the IFRS.
So I was encouraged that the rule that came out was one where both the environmentalists and some of the others were against it, means that maybe they're starting to hit the right balance on it. But we need to have something that allows us to have disclosure.
By the way, about 85% of the companies in the S&P 500 are disclosing climate disclosure today. They have it in a report. Might be called a climate report or an impact report or something like that. So this is going to allow to have consistency, transparency, comparability, which would all be great for the markets.
JULIE HYMAN: And when you look at the energy industry in particular, and I know S&P gives ESG scores to every company, a lot of the companies here are talking about the energy transition and what they're doing. Are they actually doing it? How far along are we?
DOUGLAS PETERSON: Well, this is something, why we're here for this conference, to understand that. And one of the things that we're measuring is a company's ability to meet their transition promises. Many companies has put out a 20, 30, a 20, 40, a 20, 50 target, and we want to see, are they going to have the ability to meet those targets? And that's going to be one of the discussions here in this conference.
JULIE HYMAN: How helpful has the IRA been in terms of helping spur changes there, helping spur money flowing into some of these new technologies also?
DOUGLAS PETERSON: Well, the IRA is bringing a level of infrastructure investment that we hadn't seen in the United States for a long time, and it's going to allow this concentrated investment go into energy transition. And it's some of the areas that are difficult to get to, batteries, new types of metals that are needed, hydrogen.
Hydrogen is something that's going to have an opportunity, and especially in the Southwest, this area of the country, because of the sun. Because of the energy that's here.
And so the IRA is bringing a massive amount of investment from around the globe. Things like batteries for different types of energy sources. So the IRA is a really important initiative in the US.
JULIE HYMAN: How important is this election for the energy transition? And are we seeing an outcome where it's going to look very different, depending on who wins the presidency?
DOUGLAS PETERSON: I don't think it will look that different. Well, first of all, there's over 4 million people around-- 4 billion people voting around the world this year. There's elections going on all the time. I don't think that it's going to have that big of an impact on the energy transition story.
I believe that the IRA will be here to stay. I don't see any reason why that would change, no matter what the outcome of the election. But energy transition and climate is on every single person's mind. I can't have a meeting where we don't talk about it.
You mentioned AI, at the very beginning, that's another one of the themes, interest rates, there's a few themes that every meeting I go to, we talk about those. But energy transition is on everybody's minds. People are starting to build energy transition plans. That's not going to change because of the election.
JULIE HYMAN: But are your clients asking you for advice on how to prepare for, specifically here in the US, each eventuality?
DOUGLAS PETERSON: We're not consultants so we're not giving advice, we're providing transparent consistent data so people can make informed decisions. But in maybe more informal conversations, we talk a lot about the elections and what some of the different impacts could be.
But I really don't think in the energy business, that the election will have that big of an impact because companies are already moving and they're moving fast.
JULIE HYMAN: And then finally, just quickly, on AI, I know you participated in a panel on this very topic. What's the biggest change that AI is bringing to energy? Because it's not necessarily something that people think of right away when they think about AI, is the energy industry.
DOUGLAS PETERSON: Yeah. The AI is going to bring an opportunity to completely rethink the way you use data. And the way you can project forward how different technologies are going to be used for the energy transition.
In addition, it's going to be very valuable for the part that's difficult for any transition, is the financial impact. There is trillions of dollars needed to invest and finance the energy transition. s AI is going to also help with that to find the most promising investments, the most promising approaches to energy.
But I think when you go to this molecule approach that some people are talking about, you'll also be able to apply AI to some of that kind of study as well. But big compute, AI are going to be advantage going forward as well for the energy transition.
