Equitable Origin: An Eco-label for Fossil Fuels
Imagine a Fair Trade-style eco-label for fossil fuels. A glance at the logo tells customers buying this fuel – or products made from it – that it’s produced using the highest environmental standards and in a way that helps rather than harms local communities. This is the idea behind Equitable Origin, the first and only independent certification and certification trading system for oil and gas production. It’s now seeking impact investment on the Maximpact deal site.”
The buzz in cleantech circles may be about renewable energy, but fossil fuels are set to be the world’s main energy source for decades to come. Demand is projected to rise 7% by 2020 and 28% by 2035 due to industrialization of countries such as China and India. And not only will the environment suffer from this increased push for production, so will many indigenous communities. Some 60% of the world’s proven oil reserves are located in emerging economies; countries that lack national standards for responsible production or the incentives to enforce them.
David Poritz, Equitable Origin founder and co-President saw the impact of these problems first-hand. He spent a decade working with indigenous peoples in Ecuador, a nation rich in fossil fuels where local communities struggle to protect themselves and their lands from the negative consequences of extraction. Through this experience, he began to see an urgent need for a market-based mechanism to incentivize oil and gas companies to operate with the highest levels of social and environmental performance.
Poritz developed the Equitable Origin system through extensive consultation with the oil and gas industry, NGOs, indigenous communities and governmental agencies. The result is the EO100 Standard, a comprehensive standard for oil and gas exploration and production as well as a certificate trading system and ecolable program.
The EO100 Standard provides metrics and performance targets that address the social and environmental impacts of oil and gas production. It rates a company on six principles: corporate governance and accountability, human rights and social impact, fair labor, indigenous rights, climate change and environment, and project life-cycle management. Companies that score above a certain minimum level of performance and in these areas are granted certification.
Certification can then be converted into tradeable certificates that can be bought by consumer-facing brands wanting to green their supply chain and offer a choice to support responsible production. The Equitable Origin logo can be attached to products made from certified fuels, rewarding oil and gas industry for applying the highest standards of environmental and cultural care to their work while allowing customers to support better production practices with their choices.
Equitable Origin has built an impressive cross-sector team around this idea including experienced petroleum industry professionals and environmental, sustainability and stakeholder involvement experts. It is now seeking investment to scale its operations into more markets in oil-producing countries including Ecuador, Brazil, Peru, Bolivia, Venezuela and Mexico.