AAG’s Contribution to the Environment, Economy and Society


AAG Energy Holdings Limited

 
CSR in AAG is strongly supported by AAG’s executive management and governed by corporate core values: Integrity, One Team, Entrepreneurship, Initiative, People, EHS and Accountability.

INTRODUCTION

As a leading foreign company that engages in the exploration, development, and production of CBM in China, AAG understands that its main objective is to provide superior rates of return to shareholders’ investment while simultaneously shouldering its corporate social responsibility. AAG works with Chinese organizations at all levels to jointly address social, energy, and environmental challenges in order to make contributions to China’s economic growth by supplying clean and economically efficient energy to residential and industrial end-users through commercial development of CBM.
  • AAG is committed to adopting fair labor practices at its workplaces and abides by all relevant laws and industry standards.
  • AAG is committed to preventing any work-related injuries, fatalities, or health impairments of its employees and contractors.
  • AAG will form open and trustworthy relationships with all stakeholders to increase mutual understanding on matters of common concern.
  • AAG will strive to run its operations in socially responsible, sustainable, and environmental manners; thereby preventing or minimizing adverse impacts caused by CBM operations.

FRAMEWORK AND STRATEGY

AAG’s CSR Contribution
One of AAG’s key factors in its success has been its technologically advanced methods of gas extraction, which allows for the ability to adapt to many different topographical and geological conditions. An example of this would be the multi-lateral drilling methods employed by AAG, which permit efficient production from large and extended areas while simultaneously allowing for a very small footprint, as many wells can be drilled from a single small well pad. This simultaneously reduces the environmental effects and limits the impact to the local community. Additionally, as the most environmentally conscious and safely operating CBM extraction company in China, AAG has set the higher standard for all other companies to aspire to, leading the entire industry towards overall cleaner and safer operations.

CSR in AAG is strongly supported by AAG’s executive management and governed by corporate core values: Integrity, One Team, Entrepreneurship, Initiative, People, EHS and Accountability. AAG has integrated social, environmental and economic concerns into every aspect of our corporate values, culture, and decision making process from the first day of operation in Panzhuang and Mabi. AAG fully understands that its CBM business in the communities they operate are not in isolation, so stakeholder’s engagement is a very important part of CSR. Its government coordination team has regular dialogue with local county government entities to ensure that all AAG’s operations are run in a socially responsible, and environmental protective manner that minimizes any adverse impact to the local community. Local socioeconomic and environmental issues are always at the top in the decision making process.

ACHIEVEMENT AND IMPACT

The basic principles that AAG follows are:
  • Identify the Stakeholders and have regular communication
  • Build up mutual-trust relationships and understand the stakeholders’ needs
  • Assess various legal risks and identify the best solutions
  • Integrate CSR philosophy into all business strategies and get stakeholders involved in the decision making process.
  • Achieve AAG’s CSR objective.
China has come great lengths and achieved great success with its energy and industry development, but has faced significant hurdles in the process. Coal is still the most widely used source of energy in China, and greatly adds to the environmental impacts of this great leap in industry. As a key unconventional resource, CBM will play an important role in China’s continued economic development by providing a source of clean energy, which will reduce the need for burning coal during the transition to a more sustainable development model. AAG also realizes that the local communities tend to burn coal as a main source of energy for their heating and cooking needs, adding to the local environmental damage with multiple sources of air pollution. It is for this reason that AAG allocates a percentage of its clean burning CBM to the local communities in the areas in which it operates. This greatly reduces their dependence on burning coal allowing them to live a healthier life with significantly improved air quality.

FUTURE DIRECTION

The world’s business environment is changing both rapidly and tremendously. Expectations of society towards business have grown significantly during the past few decades. Organizations should have a wider view regarding CSR, and those that failed to implement CSR would jeopardize their ability to create profits and could increase legal risk. Strategic CSR is essentially a good approach to offer clear business benefits as well as the contribution of well-being towards society.
AAG Energy is the leading independent coalbed methane (CBM) producer in China, focused on the development and value optimization of unconventional gas resources in order to supply clean energy to the Chinese economy. AAG Energy’s key assets, the Panzhuang and Mabi concessions, are located in the southern Qinshui Basin, which contains the largest amount of proven CBM geological reserves of any basin in China. The proven ability to commercialize CBM, along with a highly regarded management team has attracted support from leading international and Chinese investors including Warburg Pincus, Baring Private Equity Asia, Chinastone and Ping An.