Corporate Social Responsibility and Market †Free Samples to Students

Question: Discuss about the Corporate Social Responsibility and Market. Answer: Introduction The United Kingdoms two leading oil and gas companies Shell and British Petroleum are taken into consideration for this assessment. Every organization publishes their sustainability report so that stakeholders of those companies can view their reflection on past performance and future initiatives in terms of social and governance (ESG), environmental aspects and corporate social responsibility to some extent. This assessment highlights the comparison of the two companies based on their sustainability report. The difference between these two companies based on the range of social, environmental and economic issues is also illustrated in the business report. Moreover, a difference between the reports that furthermore describes the differences of culture, attitudes, regulations and technology is also represented. The discussions of the differences in this sustainability report based on the Zadek et al.s (1997) criteria. Lastly, a group dissection based on the preferences of one of the t wo considered organization will also be discussed. Shell in the year 2016 had attained the annual revenue of $183,008 million which was $222,894 million in the previous year (Statista, 2017) The annual revenue incurred in the year 2016 by Royal Dutch Shell $233.59 billion; whereas, in the previous year the concerned organization have earned $ 264.96 billion (Statista, 2017). However, in terms of oil and gas sustainability ranking British Petroleum leads the Royal Dutch Shell. In this business report, the difference among the two companies is effective as both serve same performance and thus carrying a comparison between the two companies present a greater overview regarding the activities towards sustainability. Shell is associated with the business activity of oil exploration, development and extraction, manufacturing and energy production, transport and trading and sales and marketing. This information is present in the starting pages of the sustainability report of Shell. BP on the other hand is also liable for performing the similar job roles. Another fact that is necessary to address that is both the companies publishes their sustainability report from decades and thus it can be said that both these companies are aware of their responsibility towards the planet earth. Difference of the two companies based on range of social, environmental and economic issues Shell has mentioned the issue on climate change and energy transition, Business ethics, transparency and governance, environmental impacts, GHG and energy and Community engagement and societal impact. According to the CEOs letter, they are taking continuous effort to ensure safety so that they can work without causing harm to people and the environment. British Petroleum reported their social issues that are they have to play a crucial role in business for lower carbon future to take action on climate change, focusing on safe operations, maximizing value to society, respecting human rights and managing the local environmental impacts. The letter written by CEO of the concerned organization written that $1 billion of investment was made for formulating and implementing low carbon technologies to build a sustainable future. Thus, it can be said that both the companies are taking initiative for sustainable business procedure. Shell started their discussion of sustainability by representing their aim for running a safe, efficient, responsible and profitable business. The positive and unique attribute of this report is that they have presented their goals for the year 2016 and highlight the priorities for the year 2017. This approach shows that they have focused both on their current business strategies and future business plans. Shell also presented their work for addressing the climate change that is utilizing only the natural gas into different products that is liquid fuels, hydraulic fluids and lubricants for final use. The concerned organization also collaborated with government to create carbon pricing mechanisms. Moreover, they also have taken steps for demonstrating CCS technology with their global partners. British Petroleum highlighted their key issues prior to any other information. However, the report consists of the details of the business functions, their business trading throughout the world and segmentation of their employees based on region and segments, which is not required to be reported in sustainability report. In addition to that, there positive aspect of this report is that they have presented their green house gas emission and their breakdown along with their details for the year 2012 to 2016. British Petroleum also presented their timeline of two decades that illustrates their initiatives of tackling climate change. They have also represented a statistical representation of GHG movements from 2015 to 2016 along with their performance for reducing the climate change impact. Evaluation of social accounting approach according to Zadek et al.s (1997) criteria Lee and Vachon (2016) stated that there are total of eight principles under the Zadek et al.s (1997) criteria- inclusivity, comparability, completeness, evolution, management policies and system, disclosure, external verification and continuous improvement. Iannuzzi (2017) furthermore explains that these criteria assess whether or not an organization is auditing their sustainable report appropriately. In this aspect both the companies- British Petroleum and Royal Dutch Shell reported their issues, controversies and transparency in their business. Shell has successfully identified their Board of Directors (BOD) who is liable to assess the governance of tax. These members also assess system of risk management and internal control. However, the key members and their role in maintaining the sustainability are not present. The committee about which the details are given is for the corporate social responsibility. This committee is also responsible for measuring sustainability performance and audit results. Alike Royal Dutch Shell, British Petroleum also stated that their Board of Directors evaluate the carbon emission and carbon footprint research. However in this case also, the stakeholders details are not discussed. Shell has information about their corporate social responsibility along with their sustainable approaches. The details of the code of conduct is not discussed however a link is provided in which the values and business principles of shell is defined properly. British Petroleum does not include their CSR activities in their business sustainability report. On the other hand, details about governance of sustainability issues are given in the report. This committee is known as safety, ethics and environment assurance committee (SEEAC) but the details about code of ethics is absent in the report. In both the cases, the pictorial representation is not present for all the aspects. Descriptive detail is present that need much time to read and getting the information. In the sustainability report for Royal Dutch Shell, the information only focused on energy transition that is addressing climate change, utilization of natural gas, research and development for lower carbon alternatives. In comparison, British Petroleums sustainability report illustrates the sustainability in every aspect that is climate change, energy transformation, supply chain and inventory management. Details about freshwater consumption, water consumption intensity, air emissions and environmental expenditures are discussed properly that on the other hand is not present in Shells report. In both the cases the major accidents done by oil spillage is not highlighted in the sustainability report. Thus, it can be said that some important controversy is hidden in the report in both the case. Identification of the target line is not given in the report but the planning for reducing the carbon emission is present. However, the measures for reducing the number of accidents are discussed. Shell provides the details of their safety target in terms of road safety and oil spills only. British Petroleum in terms of major accidents consider vehicle accidents and traffic accidents is discussed. One positive aspect in this case is BPs report; the graphical interpretation of the vehicle accidents is given for the year 2012 to 2016. Management policies and system Shell have formulated energy and climate policy, retaliation policy, Health, Safety, Security and Environment and Social Performance (HSSESP) policy, child labor policy, employment policy, fair-work policy, policies for equal opportunities and supply chain policy. Policies in British Petroleum are formulated for risk management systems, greenhouse gas policy, consumer behavior policy, human rights policy and corruption policy. In both the reports there are definition of these policies are only present and the details of the implementation of these policies on breaching of the business approaches is not present. Thus, here also the sustainability report lacks some crucial details. In the report, Shell mentioned that they have disclosed their every details from their form 20-F, File No 1-32575 but the data is not present for public use or preview. The company also adhere Governments Regulations 2014 for disclosure related to payments. They have adhered to the transparency aspect under the initiative of Extractive Industries Transparency Initiative (EITI). GRI report is not present however only the Environmental data and social and safety data are disclosed for the year range of 2007- 2016. BP only follows Extractive Industries Transparency Initiative (EITI) for maintaining transparency. The suitability report of BP does not provide GRI index report which is necessary in resenting the sustainability report. External verification In terms of external verification, Shell has taken the help from EY to audit their performance in context of the sustainable business approach. British petroleum taken help from the Deloitte to audit the report of their sustainability activities. In both the cases, the CEO letter refers to the fact that they are taking initiatives for reducing the carbon emission and making their oil extraction process more eco-friendly and improve their system so that major accidents can be minimized. The value of the Royal Dutch Shell according to the sustainability report is to help shaping more sustainable energy for the future, sharing wider benefits in their business operation and executing a safe, efficient, responsible and profitable business. The value proposed by British Petroleum is focusing on quality oil projects gas, producing fuels and lubricants that can be used in cars, optimizing the growth of biofuel and transforming operational performance. Reflection of the group discussion There are two discussion sets among out team members regarding the preference company in terms of their sustainability approach. In the first session, we have decided to hold a discussion on their carbon emission approaches. It is found from the discussion that Shell has taken effort to present data in different aspect that is climate change, community engagement, social impact, safety measure, transparency policies. Whereas, there BP also focuses on the same but does not provide evidence of their initiatives. The second days we have decided to discuss about controversial things that newspaper article provide but are not present in the report. The discussion led us to the conclusion that both the companies have not illustrate the major accidents like transportation accidents and oil spill in that affects the climate more adversely. Thus, in this case, we found both Shell and British Petroleum to be unethical. However, in terms of more details about the sustainable activities and formulation of policies and maintaining transparency of data and business process, Royal Dutch Shell is considered to be more sustainable than BP. Conclusion Enormous challenge facing governments and compliance issue are present in the sustainability report for both the organization. Shell and British Petroleum are the two industries that are taken into consideration. There are much information present in both of the sustainability report but their initiative of reducing the problem of carbon emission is not present. Policy details are present in both the report but the utilization of these policies is not given in the report. In addition to that, the details about the all the crucial information related to controversy and adversity is not mentioned in the report. Thus, it is difficult to state whether their policy is effective to maintain the sustainability of the earth. 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