How ESG Impacts Small Operators in the Industry

The SEC’s proposed rules will amplify the role convenience retailers play in the ESG realm.

June 24, 2022

ESG Planning

By Sara Counihan

ALEXANDRIA, Va.—Fuel and convenience retailers play one of the most significant roles in the evolution of transportation and carbon reduction initiatives, according to Mike Roman, senior fellow for public policy and ESG at the American Council for Capital Formation. The evolution is being woven into environment, social and governance (ESG), and that is going to be amplified by the Securities and Exchange Commission’s (SEC) proposed rules on climate.

“It is going to bring to the front the importance of relationships between suppliers and the retailers at a level that we haven’t seen before,” said Roman on this week’s NACS Convenience Matters podcast episode.

ESG is not only something that publicly traded companies need to consider, it is impacting the small business owner as well.

“From a fuel retailer, convenience retailer perspective that’s not publicly traded and says, ‘I don’t really care,’ that’s a dangerous position because banks are now starting to condition underwriting and loan terms based upon your ESG plan. So, it’s affecting everybody,” said John Eichberger, executive director of the Fuels Institute, and co-host of this week’s episode.

Roman said that he personally has had discussions with banks, and they are being asked by their shareholders where they are investing their money and who they are financing.

“[Fuel and convenience] retailers are going to be needed for decades, which means that they are going to buy new sites [and] maintain and upgrade their existing facilities,” said Roman. “They’re going to have to borrow money and have to explain to a bank so a bank can explain to its shareholders where that money is going. That’s a challenge, and it’s a new one that they haven’t had to face.”

With rising gas prices, focusing on ESG can be complicated for some retailers or not a priority, but Roman said they need to be thinking long term.

“You need to realize that you have to make investments in this business. The suppliers have got to continue to be able to do the things that they’re doing to provide the products. And our retailers are going to have to be able to sustain their models for decades. And they will change along the way, and they will evolve, but they will need to be able to retain—because customers will demand them—their ability to sell the fuels they sell today,” said Roman.

There is an evolving demographic of the population that is much more attuned with environmental stewardship, and they’re making decisions about who they want to work for and who they want to shop with and do business with based on if they share their values, according to Eichberger.

“The pressure from financial institutions, governments, your customers, your employees, your communities is just growing,” he said. “And any organization that doesn’t pay attention to this is doing so at their own peril.”

Listen to this week’s NACS Convenience Matters podcast episode No. 341 “What Retailers Need to Know About ESG Planning,” and hear about what small operators should be considering when it comes to education and planning surrounding ESG.

NACS Convenience Matters podcast hosted a similar episode on ESG planning, and the NACS Magazine article “Challenge or Opportunity” looks at how ESG is affecting the convenience retailing industry.

Sara Counihan is contributing editor of NACS Magazine and NACS Daily. She can be reached at