CSR in the Oil Industry

Olufemi Ajayi, Basim Al Halal, Riliwan Balogun, Vladislav Jensen, Adeope Ojo, Mohammed Tariq.

What is CSR and Sustainability?

Corporate Social Responsibility (CSR) is a process of assessing an organizations impact on society and evaluating their responsibilities. Operating in a responsible manner that benefits their people, communities and environment.

CSR in oil industry Mission statement

Companies we looked at: BP, Saudi Aramco, Chevron, ExxonMobil, Shell, Statoil.
Our long-term operational and commercial success is closely linked to our ability to effectively manage the environmental and social challenges, risk and opportunities our operations face. Statoil Our progress contributes towards our long-term prospects as a company and to society as a whole BP Protecting the environment while meeting the worlds demand for energy is fundamental to our success Chevron

Why is CSR needed in the oil industry?

Balancing economic growth Social development Environmental protection

Operating in an extremely watchful and volatile external environment

HSE policy
Target of 0 fatalities. - Shell Safety culture, grounded in leadership at every level of organization. - ExxonMobil Preventing accidents by providing relevant training to employees. - BP Continuous risk assessment and risk management. - Chevron Nobody gets hurt policy - ExxonMobil. Minimise impact on the environment and climate. SaudiAramco Working with suppliers to ensure HSE results - Statoil Having an open dialogue with society. - Statoil

Fatalities
30 25

No. of Fatalities

20 Shell Exxon Mobil 15 Statoil Chevron B.P 10 Saudi Aramco

Includes contractor fatalities

0 2007 2008 2009 2010

Environmental Performance Key facts

Key figures from five major oil companies in 2010
CO2: 49.52 metric tons Oil Spills: 206,707.52 barrels Flaring: 68 million metric tons (ExxonMobil and Chevron)

Green House Emission (C02/Metric Tonns)

80 70

No. of Metric Tonns

60

50

Shell Exxon Mobil

40

Statoil Chevron

30

B.P Saudi Aramco

20

10

0 2007 2008 2009 2010

Frequency of Spills
900 800

700

No. of Spills

600 Shell 500 Exxon Mobil Statoil 400 Chevron B.P 300 Saudi Aramco

200

100

0 2007 2008 2009 2010

Environmental Performance

Focus on infrastructure upgrades and special programs at the sites with highest spill rates. CO2 emission reduction targets and carbon capture technology. Work to certify remediated sites as protected wildlife habitat and conservation areas. Better understanding on water, more efficient exploration and drilling Improved production process and sulfur recovery. Investment in renewable resources.

Business Ethics

Commitment to respecting Human Rights.

Integrating human rights in Operations Promoting Labor Standards

Ethics and Anti-Corruption.

Strict Anti-Thrust policy. Integrity Due Diligence on suppliers.

Transparency
EITI (Extractive Industries Transparency Initiative)

Community Development
Promoting Local Content. Employing people locally. Using local suppliers. Local Spin-offs. Sustainable Community Development. Education and Capacity Building Community Development: Water and Sanitation, Health in suburban and rural communities Promoting Human Rights & Good Governance. Voluntarism and Giving.

Community Development - Investment Figures

Key figures of investment in community from five major oil companies in 2010 Statoil- $36 million Shell- $121 million Chevron-$197 million BP-$115.2 million Exxon Mobil- $237.1 million

Stakeholder Engagement

Local Communities Customer Employees Shareholders and analyst Government Regulators Non-Governmental organization Suppliers

Stakeholder Engagement
Government Collaboration with policy leaders on issues of mutual interest Local Community Healthcare, Infrastructure development, Schools. Shareholders Discussing performance and addressing shareholder concerns by conducting shareholder meeting Customers Providing trusted quality products to customers Suppliers Training local suppliers to develop a reliable supply chain Employee Promoting a leadership and safety based culture by organizing leadership and safety programs

GRI Index

Statoil A+ ( Ernest and Young) Shell - A+ (Llyod s Register Quality Assurance) Chevron- A+ ( Llyod s Register Quality Assurance) BP- A+ (Ernest and Young) Exxon Mobil- A+ ( Llyods s Register Quality Assurance)

Differences & Limitations

The paradox of plenty (Karl, 1997) Corporate response strategies : Level of commitment and Degree of commitment Level of commitment socialization process in which corporations recognize their social role Degree of commitment how well the company live up to standards and aspirations, it communicates.

Level Of Commitment

None of the companies acknowledge that they are part of Paradox of plenty Most companies have their human rights implemented apart from Chevron which will be implemented in 2013 BP aims to be a force of good while shell will strive to make a better world

Level Of Commitment

BP, Shell and Statoil all emphasis the need for transparent governance in their report, disclosing all revenues and payment Only BP and Shell indicate a broader concern, extending to alleged misuse of public revenues to which they contribute BP and Statoil set a new standard of fiscal transparency

Organizational Response

Shell set new standard by publishing reports against child labour and anti-bribery measure Shell and BP consult NGOs on regular basis during the formulation of company policies

Degree of Commitment

Statoil: Entry into Iraq Chevron Indonesia: Cultivating Gotong Royong BP: Investments in Indonesia Saudi Aramco: Investments in Saudi Arabia Shell: Investments in Iraq and Nigeria. ExxonMobil: Papua New Guinea

Conclusion

Investigated overall CSR performance of the oil and gas industry. Single company can not address global challenges therefore a collective action is needed. Emissions will be high due to increase in production.