Case study: How Parex creates economic value for its stakeholders
Parex is the largest independent oil and gas exploration and production company in Colombia, focused on growing its reserves and production through safe, sustainable exploration and development. Growing its business and generating sustainable value for all its stakeholders, is a top priority for Parex. Tweet This!
This case study is based on the 2021 Sustainability Report by Parex, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Parex’s investments in oil and gas exploration and development activities generate economic value, allowing Parex to deliver returns to shareholders, pay taxes, strengthen local businesses’ capabilities, create employment, and generate long-term benefits for communities. In order to create economic value for its stakeholders Parex took action to:
- create economic value for employees
- create economic value for the government
- create economic value for society
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With this case study you will see:
- Which are the most important impacts (material issues) Parex has identified;
- How Parex proceeded with stakeholder engagement, and
- What actions were taken by Parex to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2021 Sustainability Report Parex identified a range of material issues, such as corporate governance and ethics, community investment/ relations, water stewardship, health and safety. Among these, creating economic value for its stakeholders stands out as a key material issue for Parex.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process s of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Parex engages with:
To identify and prioritise material topics Parex engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Media | · Press releases · Information meetings · Corporate website · Compliance with information request |
| Community | · Information meetings and projects socialisations · Consultation meeting and social investment monitoring meetings |
| Contractors and suppliers | · Audits · Abastece Platform |
| Authorities | · Information, coordination meetings |
| Civil society | · Corporate website · Information meetings |
| Employees | · Intranet · COPASST (Joint Committee on Health and Safety at Work) · Town hall meetings |
| Customers | · Corporate website · Information meetings |
| Partners | · Periodic reports · Coordination meetings |
| Investors and shareholders | · Quarterly business performance reports · Website · Investor conferences · Press releases · Annual General Meeting |
What actions were taken by Parex to create economic value for its stakeholders?
In its 2021 Sustainability Report Parex reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- In 2021, Parex paid $62.40 million for employee salaries and benefits.
- Creating economic value for the government
- In 2021, Parex paid $147.36 million in royalties and $53.48 million in taxes.
- Creating economic value for society
- In 2021, Parex spent $3.97 million in social investments.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
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References:
This case study is based on published information by Parex, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://parexresources.com/wp-content/uploads/2022/10/IS-PAREX-2021-FINAL-INGLES.pdf
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