Chapter 1
Introduction
1.1 Background of Study
Malaysia is one of Asia’s developing countries, and traditional oil-exporting countries in Southeast Asia. From the beginning of 1970, oil companies through joint development with world-renowned production methods, opening up the market, and gradually developed and formed its own characteristics in the refined oil market, operational and management model. Refined oil as an important strategic energy resource of a country’s economic Thesis is provided by UK thesis base http://m.elviscollections.com/ and economic security has a decisive significance. The refined oil market and management of great importance through the legislative approach, according to the law to regulate oil markets, giving the relevant regulatory bodies strong enforcement powers to ensure that the country’s energy security and its healthy development of refined oil market.
1.2 What is CSR?
CSR stands for Corporate-Social-Responsibility, that the corporate social responsibility. The corporate social responsibility is and enterprise in creating profits for shareholders and also assuming pairs of workers, consumers, environment, community and other stakeholders responsibility. Its core is to protect the legitimate rights and interests of workers, a wide range including non-discrimination, safety and health working environment and system.
1.3 The Importance of Corporate Social Responsibility
There are two aspects to take part in understanding the importance of CSR, which is from the enterprise’s own perspective and the perspective of society as whole benefits.
1.3.1. Enterprise’s Own Perspective
From the perspective of enterprise’s own, it is an important way which CSR is conducted in enhancing competitiveness of enterprises. Whereas CSR is clarified definitely, CSR doesn’t include all cases for most of companies to increase competitiveness, yet the CSR can bring commercial advantage indeed, which include attracting, retaining, motivating staff within saving energy usage. Furthermore, CSR can decrease the cost of development of new services and products to resolve the issues of sociality and carry out innovation. Meanwhile, CSR also helps establish a brand image and enhance corporate reputation. Finally, CSR is also continuing to meet consumer need in a way that the Thesis is provided by UK thesis base http://m.elviscollections.com/ is environmental friendly. From the analysis on top, CSR represents around the world including China, even the development of new business opportunities as well as economic globalization.#p#分頁(yè)標(biāo)題#e#
1.3.2. Interests of Social Perspective
From a social perspective, CSR can help coordinate economic better, social and environmental development and competition. If more and more businesses to assume social and environmental concerned, it can enable us to better pursue sustainable development goals. We also believe that the government can contribute to the development of public policy objectives through the CSR companies. For example, enterprises recruit more employees and improve allow businesses from disadvantages group. An enterprise with a biggest social responsibility has to create more value with society for healthy development of the company. Non profit organization should talk about social responsibility because only a successful company will take cares the benefits of employees and its communities.
Corporate social responsibility is also demonstrated in the environment protection. For example, in the Internet Company, Alibaba in e-commerce provided professional services for the B2B.Although environmental issues such as Alibaba itself is too far away and more and more of our service business is the production of trade-oriented enterprises,
Corporate social responsibility is also reflected in the humanistic care. Corporations should provide safe and healthy working environment to the employees. In a global procurement even if the vendor offers the quality product with low price and the employees work in a bad living environment, buyers would also refuse to buy. Corporate social responsibility is demonstrated in a level playing field for SMEs as well. As Alibaba an example, in e-commerce field, it solved the previous supply and demand of SMEs basically in different parts of information asymmetries in order to all enterprises are involved in global competition directly.
From the big department, business is exactly important in current society organizations. This called corporate “social responsibility” is so important organization in society as a whole issue of what role to play, it mean that concerns of responsibility are clear. One further point that the so-called what role, that is the manner in which enterprises should what idea, what kind of norms to deal with groups of various types of relationships, other social organizations and how to do with the government. To put it plainly, this is included in the corporate social responsibility, values, beliefs, organizational culture as well as the daily management, marketing activities.
1.4 Introduction of Oil Companies
1.4.1. Introduction of Shell Oil Company
Shell Company is an existing company which does not do any business or have any assets actually. The most interesting thing to investors is that Shell Company has a listing. Shell Refining Company (Federation of Malaya) Berhad Malaysia is the only public listed company. In 1960, Shell in Malaysia was founded and today it holds forty nine percents participation of the public. “Shell conducts in state of the art technology, and Shell has main petroleum products which are supplied to Shell’s branch business in Malaysia. Shell’s oil refinery produces a variety range of petroleum products at Port Dickson, and over 80% are consumed in Malaysia”.#p#分頁(yè)標(biāo)題#e#
1.4.2. Introduction of BP Oil Company
BP Oil Company is one of the world’s leading oil companies, on the basis of market capitalization and proven reserves. The key businesses of the company are exploration and production, refining, marketing and chemicals.
Exploration and Production’s activities are oil and natural gas exploration, field development and production, pipeline transportation, natural gas processing, power marketing together. Refining and Marketing contain oil supply and trading, refining and marketing as well. Chemical activities include petrochemicals manufacturing and marketing. Additionally, the BP Company has a solar energy business, in which is one of the world’s largest manufacturers of photovoltaic modules and systems.
1.4.3. Introduction of PETRONAS Oil Company
PETRONAS is short for Petroleum. Petroleum Nasional Berhad is a local owned gas and oil company in Malaysia, which was founded on August 17 of 1974. The company is owned by the Malaysia Government totally, and is given with by entire oil and gas resources in Malaysia, and PETRONAS is trusted with the responsibility developments and putting worth to all of these resources. PETRONAS is a corporation, which ranked in Fortune Global 500’s biggest corporations in the worldwide. Fortunately, PETRONAS was ranked as the 95th biggest company in the world in 2008 and 80th biggest in 2009. PETRONAS is ranked, as the 8th most profitable company in the Asia, even in the world.productdevelopment
1.5 Research Problems
The emphasis on company should be shown importance of CSR, and pay attention to the good times which has been too much on profit and debt. The survival and sustainability of CSR is playing a key role in Oil Company in Malaysia, such as Shell, BP and PETRONAS. In this research, it will be shown that how these oil companies to deal with the social problems including involvement about the community, environment and employee, as well as the business ethics. So that the companies evenly to carry out the development of sustainability reporting in each year.
1.6 Research Question & Objective
The main purpose of my research paper is to comprehend the trend of CSR in Malaysia. My research’s target is some main oil corporations in Malaysia.
1.7 Organization of the Research
The statement below demonstrates how the research was structured in manner orderly for readers.
The chapter 1 is an introduction in the whole discuss of CSR and the importance of CSR, including background of understanding the Oil companies in Malaysia. For instance, I choose Shell, BP and PETRONAS Oil companies.
The chapter 2 is about literature review. It provides bases acknowledgements of the CSR under considerations through previous studies and literature. It generally covers the effects of CSR in our lives and how the people have opinions of CSR in worldwide, especially in developed countries.
In the chapter 3, it outlines the structure of ways in methodology used and helps the research to obtain or gather data. #p#分頁(yè)標(biāo)題#e#
The chapter 4 is analysis. This area is the obtain result from the previous chapter which is analyzed. By providing a number of theoretical perspectives, it tries to make sense of the factors behind engaging with CSR activities.
The final chapter is summary of this study that is to prove the research results prior to issues and argument before.
Chapter 2
Literature Review
2.1 Introduction of CSR
Corporate social responsibility means that a corporation should be held accountable for any of its actions that affect people, their communities, and their environment (Management-issue, 2006). It implies that negative business impacts on people and social should be acknowledged and corrected of at all possible. It may require a company to forego some profits if its social impacts are seriously harmful to some of the corporation’s stakeholders or of its funds can be used to promote a positive social good (William C.Frederick, 1996).
However, being socially responsible does not mean that a company must abandon its primary economic mission. Nor does it mean that socially responsible firms can not be as profitable as others less responsible. Social responsibility requires companies to balance the benefits to be gained against the costs of achieving those business firms actively strive to be socially responsible. Others are doubtful, saying that business’s competitive strength is weakened by talking on social tasks (James E.Post 1996).
2.1.1 Issues CSR globally.
Many people are concerned about potential corporate influence, in 1989, two-thirds of a national sample believed that “Business has gained too much power over too many aspects of American life.” The focused power found in the modern business corporation means simply that every action it takes can affect the quality of human life-for individuals, for communities, and for the entire globe (Business week, 1989). All societies are now affected by corporate operations. In Asia, not many corporations and businesses attach much importance to the idea of being socially responsibility (Birch & Moon, 2004). In a 2004 study, it is found that the level of corporate social responsibility (CSR) in, for instance, Singapore, is quite low (Ramasamy and Hung). Not only is the concept often misunderstood, it is ignored when businesses are locked in competition or are under economic pressure (The Business Times, Singapore, Mar 26, 2004). According to Paia Consulting, a Singapore-based consultancy firm, “In Singapore, there is very little public pressure on companies to be accountable to wider society” (Roche and Webb, 2003).
Despite the growing importance of CSR, there is little agreement as to what the phrase really means and there are so many different names for the same or similar concept, such as Corporate Social Responsibility, Corporate Citizenship, Business Sustainability and Corporate Responsibility (Osha review, 2009). While some may argue over the distinctions among these terms, at the core they all point towards the same fundamental principle: that a company is responsible for providing more benefits than just profits for shareholders. It has a role to play in treating its employees well, preserving the environment, developing sound corporate governance, supporting philanthropy, fostering human rights, respecting cultural differences and helping to promote fair trade, among others. All are meant to have a positive impact on the communities, cultures, societies and environments in which companies operate. (Juno, 2005)#p#分頁(yè)標(biāo)題#e#
The term CSR stands for Corporate Social Responsibility, a trend that has emerged in the western business practice seeking to integrate businesses into the society as responsible and ethical citizen. This trend has been most popular in the United States and the United Kingdom; however continental European countries with the European Union at the front are increasingly witnessing a change in the private sector with more and more businesses committing themselves to creating a private sector that takes into account the environmental and social aspects of their activities and organization as well.
For the business CSR can be a source of opportunity, innovation, and competitive advantage (Michael & Kramer: 2006, p.1) while at the same time providing with the opportunity to actively contribute to the sustainable development. Thus, in addition to the obvious, direct, benefits of CSR enjoyed by the ultimate beneficiaries of responsible corporate practices, CSR brings benefits to the companies that practice it. Organizations considering environmental, social and broader economic questions in connection with their core operations unleash innovations and deliver better financial returns. Strategically and systematically integrated into their business, CSR helps companies to better address reputation risks, attract investors, improve relations with stakeholders and become more competitive in mature markets. (Kori Udovicki, Baseline study on CSR practices in the New EU Member States and Candidate Countries, 2007)
2.1.2. Efforts of CSR
These efforts should also benefit a company’s various stakeholders, who comprise all or some of the following: customers, employees, executives, non-executive board members, investors, lenders, vendors, suppliers, governments, NGOs (nongovernmental organizations), local communities, environmentalists, charities, indigenous people, foundations, religious groups and cultural organizations (tutor2u review, 2009). Against the backdrop of this national initiative and the effort by some corporations to incorporate CSR principles, not much is really known about the state of affairs in Singapore. In fact, the general observation is that there is a lack of CSR studies on Asian countries (Chapple and Moon, 2005). As a result, social responsibility has become a worldwide expectation.
2.2 Two Main Principles of CSR
Carroll’s (1979, 1991) Pyramid of Corporate Responsibility identifies a spectrum of obligations that companies have toward society. It serves as a framework which places primary emphasis on economic results but argues for legal, ethical and philanthropic behavior. In a recent conceptualization, he terms this as “the four faces of corporate citizenship” (Carroll, 1998). Economic responsibilities pertain to the necessity for corporations to be profitable. Legal responsibilities require business to operate within the boundaries of laws and national policies. Ethical responsibilities demand that firms operate morally, fairly and justly. Philanthropic responsibilities oblige companies to contribute financial and other resources for the welfare and betterment of society and the community. The point to emphasize is that their business leaders believed that business has a responsibility to society that went beyond or worked in parallel with their efforts to make profits .As a result of ideals about business’s expanded role in society, two broad principles emerged (Anne T. Lawrence, 1996). These principles have shaped business thinking about social responsibility during the twentieth century.#p#分頁(yè)標(biāo)題#e#
2.2.1. The Charity Principle
The idea that the wealthier members of society should be charitable toward those less fortunate is a very ancient notion. Royalty through the ages has been expecting to provide for the poor. The same is true of those with vast holding of property, from feudal times to the present. Biblical passages invoke this most ancient principle, as do the sacred writings of other word religions. When other wealthy business leaders endowed public libraries, supported settlement house for the poor, gave money to education institutions, and contributed funds to many other community organizations, they were continuing this long tradition of being “my brother’s keeper.”
This kind of private aid to the needy members of society was especially important in the early decades of this century. At that time, there was no Social Security system, no Medicare for the elderly, no unemployment pay for the jobless, and no United Way to support a broad range of community needs. There were few organizations capable of counselling troubled families, sheltering women and children victims of physical abuse, aiding alcoholics, treating the mentally ill or the physically handicapped, or taking care of the destitute. When wealthy industrialists reached out to help other in these ways, they were accepting some measure of responsibility for improving the conditions of life in their communities. In doing so, their actions helped counteract the critics who claimed that business leaders were uncaring and interested only in profits. For many of today’s business firms, corporate social responsibility means these kinds of participation in community affairs-making paternalistic, charitable contributions. However, charitable giving is not the only form that corporate social responsibility takes.
2.2.2. The Stewardship Principle
Most of today’s corporate executives see themselves as stewards, or trustees, who act in the general public’s interest. Although their companies are privately owned and they trying to make profits for the stockholders, the company is managed who believe they have an obligation to see that everyone-particular those in need-benefits from the company’s actions. According to this view, corporate managers have been placed in a position of public trust. They control vast resources whose use can affect Thesis is provided by UK thesis base http://m.elviscollections.com/
people in fundamental ways. Because they exercise this kind of crucial influence, they incur a responsibility to use those resources in ways that are good not just for the stockholders alone but for society generally. In this way, they have become stewards, or trustees, for society. As such, they are expected to act with a special degree of social responsibility in making business decision. #p#分頁(yè)標(biāo)題#e#
This kind of thinking eventually produced the modern theory of stakeholder management. According to this theory, corporate managers need to interact skilfully with all groups who have a “stake” in what the corporation does. If they do not do so, their firms will not be fully effective economically or fully accepted by the public as a socially responsible corporation. As one former business executive declared, “Every citizen is a stakeholder in business whether he or she holds a share of stock or not, is employed in business or not, or buys the products and services of business or not. Just to live in American society today makes everyone a stakeholder in business.”
The business case supporting CSR has been documented. Burke and Logsdon (1996) argue that CSR activities can help to create strategic benefits. For instance, CSR involvements by companies could lead positive long-term financial impact (Murray and Vogel, 1997). In a recent book by Kotler and Lee (2005), there is detailed discussion on how CSR engagements could help companies increase sales and market share, strengthen brand positioning, improve corporate image, attract, motivate and retain employees, reduce operating costs and enhance appeal to investors and financial analysts (Chapter One: Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause). It is useful to ask the question what are the benefits or perceived benefits of CSR. Answers to this question would be a good input into education programs on CSR in Singapore and elsewhere.
2.2.3. Modern of CSR
These two principles-the charity principle and the stewardship principle established the original meaning of corporate social responsibility (James Weber, 1996). Figure 2-1 Foundation principles of corporate social responsibility and their modern expression.
Charity Principle Stewardship Principle
Definition Business should give voluntary aid to society’s needy persons and groups Business, acting as a public trustee, should consider the interests of all who are affected by business decisions and policies
Modern Expression ? Corporate philanthropy
? Voluntary actions to promote the social good ? Acknowledging business and society interdependence
? Balancing the interests and need of many diverse groups in society
Examples ? Corporate philanthropic foundations
? Private initiatives to solve social problems
? Social partnerships with needy group ? Stakeholder approach to corporate strategic plans
? Optimum long-run profits, rather than maximum short-run profits
? Enlightened self interest attitude
Figure 2-2 recommended social responsibility actions-committee for Economic Development shows a list of social priorities from the early 1970s development by the Committee for Economic Development (CED).
? Economic growth and efficiency
Improving productivity#p#分頁(yè)標(biāo)題#e#
Cooperating with government ? Education
Giving aid to schools and colleges
Assisting in managing schools and colleges
? Employment and training
Training disadvantaged workers
Retraining displaced workers ? Civil rights and equal opportunity
Ensuring equal job opportunities
Building inner-city plants
? Urban renewal and development
Building low-income housing
Improving transportation systems ? Pollution abatement
Installing pollution controls
Developing recycling programs
? Conservation and recreation
Protecting plant and animal ecology
Restoring depleted lands to use ? Culture and the arts
Giving aid to arts institutions
? Medical care
Helping community health planning
Designing low-cost medical care programs ? Government
Improving management in government
Modernizing and reorganizing government
2.3 Voluntary and Mandatory of CSR
The campaign for a voluntary approach to corporate social responsibility (CSR) is gaining momentum. CSR is about the relationship between a company and its host community. But this does require that the host community knows the company is there (ICIS Magazines2002).
Community volunteering is an initiative in which the corporation supports and encourages employees, retail partners, and/ or franchise members to volunteer their time to support local community organizations and causes. Volunteers’ efforts may include employees volunteering their expertise, talents, ideal, and /or physical labour. Corporate support may involve providing paid time off from work, matching services to help employees find opportunities of interest, recognition for serviceman organizing teams to support specific causes the corporation has targeted (Philip Kotler 2005).
2.3.1. The Virtue Matrix of CSR
CSR is still in its infancy and is a rapidly developing area with companies and regulatory bodies learning all the time. Legislation at this stage, enforcing a prescriptive 'one-size-fits-all' approach, could dampen the current level of innovation. The virtue matrix depicts the forces the forces that generate corporate social responsibility. The bottom two quadrants of the matrix are the civil foundation, which consists of norms, customers, and laws that govern corporate practice. Companies engage in these practices either by choice or in compliance. Behaviour in the civil foundation does no more than meet society’s baseline expectations. Because it explicitly serves the cause of maintaining or enhancing shareholder value, this behaviour can be described as instrumental (Harvard business review 2003). Figure 2-3 shows the virtue matrix
Frontier
(Intrinsic)
Strategic
Structural
Choice Compliance
Civil Foundation
(Instrumental)
2.3.2. Typical Program of Voluntary
Corporate support for employee volunteering ranges from programs that simply encourage their employees to give back to their communities to those representing a significant financial investment and display of recognition and reward. Examples representing types of support include the following:#p#分頁(yè)標(biāo)題#e#
? Promoting the ethic through corporate communications that encourage employees to volunteer in their community and that may provide information on resources to access in order to explore volunteer opportunities.
? Suggesting specific causes and charities that the employee might want to consider and providing detailed information on how to get involved, often with causes and charities supported by other current social initiatives.
? Organizing volunteer teams for a specific cause or event, such as a United Way “Day of Caring” event, where, for example, employees pant the interior of a child care facility for homeless children.
? Helping employees find opportunities through on site coordinators, web site listings, or in some cases, through sophisticated software programs that match specific employee interests and criteria with current community needs.
? Proving paid time off during the year to do volunteer work, with typical benefits ranging from offering two to dive days of annual paid leave to do volunteer work on company time, to more vigorous programs that provide opportunities for an employee to spend a year on behalf of the company working in developing country.
? Awarding cash grants to charities where employees spend time volunteering; grant amounts are then often based on numbers of hours reported by employees.
? Recognizing exemplary employee volunteers through gestures such as, emotions in internal newsletters, awards of service pins or plaques, and special presentations at department or annual company meetings.
2.3.3. Potential Benefits of Communities’ Volunteering
The benefit for the initiative reflects its unique capacity to build strong and genuine relationships with local communities and to attract and maintain satisfied and motivated employees. This may be one of the best initiatives for augmenting and leveraging current involvement and investments in social initiatives. Additional potential benefits have been experienced as well, including contributions to business goals, enhancing corporate image, and providing opportunities to showcase products and service (Philip Kotler 2005).
1. Building Genuine Relationships in the Community
Recipients of volunteer efforts recognize the spirit of commitment that a company has when volunteers show up personally to help their organization’s causes. The relationship and community building opportunities for these sincere contributions are perhaps strongest for this corporate social initiative. It seems that anyone can write out a check or provide apace for cause promotional materials in retail stores.
2. Contributing to Business Goals
Many companies like Hewlett-Packard believe corporate social initiatives can be both a good business investment as well as a social one. They believe that by assisting communities in realizing the potential that technology can have on economic development; for example, they can also building new markets for the company, In the following example, Hewlett –Packard’s chairman and CEO, Carly Fiorina, presents perspectives that counter many of those presented in Milton Friedman’s seminal work 33 years ago entitled The Social Responsibility of Business Is to Increase Its Profits. He argued that business leaders had “no responsibilities other than to maximize profits for the shareholders.” To this Ms.Fiorina commented in a recent keynote address, described in the next example, “The ideal that companies have no responsibility to the communities in which they operate, that in other words, we operate in a vacuum, or the idea that our actions have no consequences on the world around us is short-sighted at best, and it is certainly not sustainable for very long.” #p#分頁(yè)標(biāo)題#e#
3. Increasing Employee Satisfaction and Motivation
A company’s reputation for community involvement, including support for employees to volunteer for cause, can influence their moral, as well as their choices about where they work. For example, after 9/11, a Cone/Roper’s study indicated that 76% of respondents said a company’s commitment to causes was important when deciding where to work. And in their 2002 Citizenship Study with a national cross section of 1,040 adults, 80% of respondents say they would be likely to refuse to work at a company if they were to find out about negative corporate citizenship practices.
4. Supporting Other Corporate Initiatives
Supporting employees to volunteer for causes that are a strategic focus for the organization can leverage the contributions already being made through other initiatives such as cause promotions and philanthropy.
5. Enhancing Corporate Image
Many companies are discovering that strong reputations for corporate social responsibility can be enhanced, even won, through the generous actions of employees whose volunteer efforts in need. Among all the corporate social initiatives, perhaps this one has the most ability to generate feelings of goodwill among employees and members of the community at the same time.
6. Providing Opportunities to Showcase Products and Services
Philanthropic initiatives that include donations of products and service can be enhanced through volunteer efforts that provide additional opportunities to associate products with corporate community goodwill.
Will business knowing that society expects a high standard of social behaviour decide voluntarily to be socially responsible, or we need laws and government regulations to ensure socially responsible conduct by business? The answer to both these question is “Yes”. Business does need social guidance from laws and public policies. Without them, companies would be uncertain about which social goals they should pursue and in which order of priority (Danish Commerce and Companies Agency 2009). They tell business that an environment protection is an important social goal with a high priority.
Laws and regulations also help create a “level playing field” for businesses that compete against one another. By requiring all firms to meet the same social standard-for example, the safe disposal of hazardous wastes-one firm can not gain a competitive advantage over its rivals by dumping its wastes carelessly without the risk of lawsuits, fines, possible jail terms for some of its managers and employees, and unfavourable publicity for the lawbreaking firms.
2.4 IASB’S Argument of CSR
IASB is argued that the information that Corporate Social Responsibility (CSR) reports could include this data or that listing agreements could be amended to require its disclosure (IASB Segment Reporting 2005). However, they argue that because the CSR model relies on voluntary disclosure, it is believed that few entities would provide the additional information. In their view a compulsory regime within an IFRS platform is necessary. They concluded by adding that the suggested disclosure could be produced at relative little cost as this information is already generated at subsidiary level (IAS 14 Segment Reporting2006). Object to either requirement at the time, but they can not provide a solution to this problem. The reasons are: #p#分頁(yè)標(biāo)題#e#
1. CSR reports are voluntary. To ensure comparability, compulsion is required for the data we ask for. It is too important for too many parties to be left to voluntary disclosure;
2. CSR reports are not always subject to audit. The data we request needs to have been verified if it is to be relied upon;
3. There are no standards yet fixed for CSR reporting. The GRI is useful, but has not taken issues as far as what we would like, partly because of the constraints imposed upon it for reason of it requiring voluntary disclosure. Only compulsory disclosure can create the level playing field that will ensure that all companies can declare this information without harm to their commercial well-being.
2.5 Sustainability Report
The responsibility for social and ecological matters taken by companies (Corporate Social Responsibility) is recognized today as these bases for sustainable business management and a strategic competitive advantage. CSR continues to focus on building shareholder value by investing in and growing its businesses while operating in a sustainable manner across the company (Katalin Urban). Improving and protecting of company's reputation as a sustainable leader is an advantage for relations with employees, customers, investors and other corporate stakeholders. Meeting customers’ expectations, complying with legislative body's standards and managing the risks in the supply chain are additional benefits for company.
Successful sustainability management is a demanding task. Corporate social responsibility data needs to be collected, consolidated, evaluated and communicated from various sectors such as community investment, human resources and potentially throughout the organisation (Matthias Reimers, 2009). Continuous reporting enables the company to realize the successful gains of sustainability strategy at any time. The company can communicate their results in various reporting formats (Corporateregister, 2007, 2008) e.g. GRI, CDP or own parameter systems internally or externally.
2.5.1. Method of Sustainability Reporting
The Global Reporting Initiative (GRI) is a network-based organization that has pioneered the development of the world’s most widely used sustainability reporting framework and is committed to its continuous improvement and application worldwide (GRI.org). In order to ensure the highest degree of technical quality, credibility, and relevance, the reporting framework is developed through a consensus-seeking process with participants drawn globally from business, civil society, labor, and professional institutions.
2.5.2. Benefit of GRI Reporting
Sustainability reports based on the GRI framework can be used to benchmark organizational performance with respect to laws, norms, codes, performance standards and voluntary initiatives; demonstrate organizational commitment to sustainable development; and compare organizational performance over time(GRI,2006).GRI promotes and develops this standardized approach to reporting to stimulate demand for sustainability information – which will benefit reporting organizations and those who use report information alike(Cooper,B.2009).By implementing the improvements and achieving the set goals, the company make your company sustainable and demonstrate your "sustainability leadership"( PWC ,2007).#p#分頁(yè)標(biāo)題#e#
2.5.3. ISO reporting
ISO (International Organization for Standardization) is the world's largest developer and publisher of International Standards.
ISO is a network of the national standards institutes of 163 countries, one member per country, with a Central Secretariat in Geneva, Switzerland, that coordinates the system.
ISO is a non-governmental organization that forms a bridge between the public and private sectors. On the one hand, many of its member institutes are part of the governmental structure of their countries, or are mandated by their government. On the other hand, other members have their roots uniquely in the private sector, having been set up by national partnerships of industry associations. Therefore, ISO enables a consensus to be reached on solutions that meet both the requirements of business and the broader needs of society.
Environmental reporting has been a contentious issue since ISO 14001 was drafted during the mid-1990s. At that time, the work group charged with writing the standard was characterized by two distinct positions. Some participants wanted to include a requirement that organizations regularly share information about their significant environmental aspects and impacts with interested external parties. Others opposed to a mandatory reporting requirement argued external reporting fell outside the scope of a system that purported to assist in internal management of environmental issues. Ultimately, compromise language was struck.
2.6 Auditor’s reports
At the request and as part of remit as statutory auditors, the procedures applied have outlined below to a series of indicators and data published on the Group's Corporate Social Responsibility (CSR). The aim of the audit being to obtain a moderate level of assurance, checks were run on only certain data and on eight indicators (M.Ryan 2008). Auditor performed in accordance with the professional guidelines outlined in ISAE 3000 of the IFAC (International Federation of Accountants). Full responsibility for the information is accepted and indicators are published on CSR. The Group is also responsible for ensuring that the reporting protocol applied in 2008 - a summary of which is given in the "Methodological Note" available on the CSR - is appropriate and distributed to all interested parties, as well as for ensuring that all indicators are drawn up in compliance with this protocol. Their role is to express an opinion on the data and indicators used on the basis of our work. Additional and more exhaustive checks would be required to obtain a high level of assurance.
2.6.1. Nature and Scope of the Checks for CSR
For the selected CSR data as following:
? review of the content of the CSR report in order to identify the main claims made by the Group with respect to its CSR strategy and performance, notably as regards the following themes: climate change, microfinance, project finance (Equator Principles), sector-based policies and Socially Responsible Investment (SRI);#p#分頁(yè)標(biāo)題#e#
? Interviews with: those in charge of the effective implementation of the Group's CSR strategy; those affected by the CSR strategy within the various transverse functions (compliance, risk management, human resources and purchasing); those affected by the CSR strategy within the Group's investment and financing, asset management, and individual and corporate banking activities;
? Verification, through checks, of the existence of supporting documentation for the claims made (minutes of CSR committee meetings, internal and external presentations, studies and the results of surveys, etc.).The auditors performed the following due diligences in order to obtain a moderate level of assurance as to the absence of any major anomalies.
? Review the Group's reporting protocol in order to assess its consistency, relevance, reliability, objectivity and clarity.
? Hold interviews with those in charge of consolidating the indicators, then carry out the relevant analyses and verified, on the basis of surveys, the manner in which the indicators were calculated and consolidated.
? Interview those in charge of collecting the data used to draw up the indicators, verify the correct comprehension and application of procedures and carry out detailed tests, on the basis of surveys, in order to check the calculations made and reconcile the data provided with its supporting documentation.
2.6.2. Reporting Protocol
? Relevance:
The ongoing integration of CSR considerations within auditor Group’s various business lines was further reinforced in 2008 (Neuilly-sur-Seine, 2009), particularly as regards its SRI policy (consolidation of in-house expertise and methodology) and the assessment of the ESG risks of major projects (PROJETHIC meets the risk assessment requirements advocated by the Equator Principles of which the Group is a member).The Group also focused on other ESG priorities specific to the banking industry such as the prevention of climate change, support measures for microfinance institutions and investment in renewable energies. The publication of information and indicators according to business line on the CSR, including those that are currently being checked, reflects the gradual implementation of ESG criteria in the operations. The implications for human resources management, notably when it comes to diversity, recruitment and training, are examined in greater detail on the site. The Group’s social reporting complies with the profession's best practices. In terms of the environment, the main factors linked to the Group's footprint (paper, energy and water consumption, waste) are included in its yearly summary table of indicators.
? Completeness:
The Group's reporting protocol and indicators are intended to cover all of its business lines and entities (as specified in the Methodological Note, Rosbank, which was acquired in 2008, is not yet integrated within the non-financial reporting process). Their effective implementation by local players must be pursued to ensure their coherent application across the board, particularly as regards environment indicators.#p#分頁(yè)標(biāo)題#e#
? Accuracy, objectivity, comparability:
Feedback on data collection campaigns allows for greater precision in the definitions, methods of calculation and uncertainty margins of the data sheets used to draw up the indicators. The methodology therein is outlined in full in the Methodological Note as well as on the indicator sheets and footnotes to the data published. It also outlines the shortfalls in the methodology used for a certain number of indicators.
? Reliability:
The source databases input by the business lines, notably those that handle financial flows, do not undergo specific controls by those in charge of collecting data. Data is entered by all business lines and is subject to in-house and external checks to ensure their integrity and reliability. Any changes to the reporting protocol or methodology must be planned sufficiently upstream of collection campaigns in order to ensure operational staff are aware of these changes. The controls in place linked to the collection, composition and consolidation of indicators must continue to be improved and, in particular, be explicitly described on the indicator sheets. The systematic validation of data collected must be implemented and carried out separately.
2.6.3. Findings
With regards to the CSR reporting procedure (Paris-La Défense, 2008):
• Processes described in the social and environmental reporting procedure are designed to ensure the correct collection and consolidation of CSR indicators. Despite consequent efforts aiming at adapting reporting procedure to the new CSR organization, the application of reporting procedure is still not fully uniform within the network, in particular concerning the understanding of occupational accidents and disabled people indicators’ definition.
• The dedicated computer-based CSR reporting tool used to report on social and environmental data. This tool is properly mastered by the correspondents belonging to the worldwide social and environmental reporting network that we have interviewed.
• Within the frame of an ongoing improvement process, internal controls performed both during data collection and data consolidation should be more formalized and more systematized. Description of roles and responsibilities should be reinforced regarding internal controls required at each step of the reporting.
Chapter 3:
Research Methodology
3.1 Introduction
The objective of the project is to identify exact contribution in corporate social responsibility (CSR) to Malaysia Oil Company; it must be measured in order to be correct evaluated. This intent was to explore how these oil companies respond to the CSR agenda and to highlight current best practice. Companies within a proven track record in CSR related activities such as community initiatives, environmental management, and employee related initiatives were selected from a search for award winning business. For the reporting of CSR, we will see kinds of categories of CSR reporting in Shell, BP and PETRONAS. It contains the communities, employees and environment and so on. This chapter demonstrates how activity in research which this study is defined, how this project should be done, how this sample and data are collected, and the sources of data, even limitation of research.#p#分頁(yè)標(biāo)題#e#
3.2 Source of Data and Sample
Main data in this paper was secondary data which was mainly searched from relevant website. Moreover, Google, Access my library and Ebsco were used to get reliable information and evidences. By using the internet, it offered variety of datum and information about the research topic. Furthermore, some of the evidence and information were obtained from texts and journals. The sample for this study comes from the findings appearing to suggest that the level of CSR disclosure in annual reports of corporations based on the degree of ‘‘public tension’’ met by each company. Hence, participation of corporations in social contributions should be compulsorily disclosed in annual reports for the sake of investors. Research found that ownership structure should be included in CSR disclosure because it has direct impact on business performance of company. .
3.3 Scope of Study
The study finds that, there is considerable variability in the amount of social activities disclosed in corporate annual reports for Shell, BP and PETRONAS Oil Company in 2007. Because 2007 is visit Malaysia year, to investigate specifically (i) The positions and objectives of CSR in Malaysia; (ii) Different practices of CSR in Malaysia; and (iii) Future proliferation of CSR in Malaysia. The oil and gas industry appears to be under greater pressure to manage its relationship with wider society. This study is to investigate the extent to which the development of local communities, society at large and indeed the natural environment can benefit from the voluntary activities of oil companies. It focuses on the key areas of CSR policies where oil companies are expected to make a positive contribution: improvements in environmental performance, development and governance.
3.4 Limitation of Research
? The view of CSR didn’t take into account.
? The management frameworks which try to cover social and environmental aspects, such as Global Reporting Initiative, by providing a number of related performance measures, were not able to connect them with corporate strategy.
? Balanced Scorecard approach (CSR performance measurement framework) was not presented in this paper.
? There were poor evaluators of cause-effect relationships between CSR and business performance.
For the evolution of the suggested framework, the available assessment of CSR and Corporate Sustainability actions of the oil corporations of varied sectors were analyzed in order to clarify and evaluate the performance of CSR as well as the current limitations. For the traditional balanced scorecard, it should be extended and improved to get better understanding about the impacts of CSR on company performance.
3.5 Operational Definition
3.5.1. Corporate Social Responsibility (CSR)
Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large#p#分頁(yè)標(biāo)題#e#
3.5.2. Corporate Citizenship
Corporate citizenship is an alternative term for CSR, involving that the organization is a responsible “citizen” in meeting all its obligations.
3.5.3. Corporate Governance
Corporate governance is most often viewed as both the structure and the relationships which determine corporate direction and performance. The corporate governance framework also depends on the legal, regulatory, institutional and ethical environment of the community.
3.5.4. Ethical CSR
Organizations pursue a obviously defined sense of social conscience in managing their financial responsibilities to shareholders, their legal responsibilities to their local community and society as a whole, and their ethical responsibilities to “do the right thing” for all their stakeholders.
3.5.5. Business Sustainability
Business Sustainability is any organization that participates in environmentally-friendly or green activities to ensure that all processes, products, and manufacturing activities adequately address current environmental concerns while maintaining a profit.
3.5.6. Corporate Responsibility
Corporate sustainability initiatives take on an increasingly central role in companies' operations, the need for systems to efficiently manage and report on the voluminous data associated with annual sustainability reports is growing.
3.5.7. Philanthropic responsibilities
Philanthropy encompasses those corporate actions that are in response to society's expectation that businesses be good corporate citizens. This includes actively engaging in acts or programs to promote human welfare or goodwill. Philanthropy is more discretionary or voluntary on the part of businesses even though there is always the societal expectation that businesses provide it.
3.5.8. The Charity Principle
The principle of charity requires interpreting a speaker's statements to be rational and, in the case of any argument, considering its best, strongest possible interpretation. In its narrowest sense, the goal of this methodological principle is to avoid attributing irrationality, logical fallacies or falsehoods to the others' statements, when a coherent, rational interpretation of the statements is available.
3.5.9. The Stewardship Principle
Stewardship requires appreciating the two great gifts that a wise and loving God has given: the earth, with all its natural resources, and human nature, with its biological, psychological, social and spiritual capacities.
3.5.10. Communities’ Volunteering
Volunteering is the practice of people working on behalf of others or a particular cause without payment for their time and services. Volunteering is generally considered an altruistic activity, intended to promote good or improve human quality of life, but people also volunteer for their own skill development, to meet others, to make contacts for possible employment, to have fun, and a variety of other reasons that could be considered self-serving.#p#分頁(yè)標(biāo)題#e#
3.5.11. GRI
Global Reporting Initiative (GRI) is an international organization of companies, NGOs, and government agencies that joined to develop uniform standards for sustainability reporting.
3.5.12. ISO
International Organization for Standardization (ISO) is a standard that to consider the value of developing management.
3.5.13. Sustainability Reporting
Sustainability reporting is the practice of corporation publishing information about its economic, social, and environmental performance.
3.5.14. Sustainable Development
Sustainable development is an ideal of economic growth that meets the needs of the present without consuming social and environmental resources in a way that future generation.
3.5.15. Auditor’s Report
An audit report is a codification of the process, findings and outcomes of the audit process, usually prepared by the auditors and project team.
3.5.16. Socially Responsible Investment (SRI)
Socially Responsible Investing (SRI) is a well-designed economic discipline which offers investors with strict moral standards to invest their money without having to compromise their core beliefs and principles.
Chapter 4
Analysis
4.1 Introduction
Corporate Social Responsibility is necessary to grasp two things: Firstly, we must base ourselves on the specific characteristics of each industry, such as our magazine includes a business sense, the media business, that’s why we must pay attention to social responsibility. Our corporate social responsibility is different in generality. That is a business change in the ways, and the human society for thousands years. On the most important social activities, business activities become more convenient, safer, and more humane which can create more wealth. Secondary, it should be sure that the corporate social responsibility is not to flaunt put. It is formed in the process of business growth. It is not a slogan and used as a public relations and advertising strategy. Therefore, there are many kinds of categories in CSR of Oil companies in Malaysia, such as community, environment, and employees and sustainability reporting in 2007 so on.
4.2 CSR Categories of Shell, BP, and PETRONAS Company
4.2.1 Involvement of Community
Categories Shell BP PETRONAS
Disclosure on community YES YES YES
1.Offer jobs YES NO NO
2.Test safety driving YES NO NO
3.Test reactions of drivers YES NO NO
4.Create tangible benefits NO YES YES
5.Create enduring solutions NO YES YES
6.Social benefit and quality of life NO NO YES
Table 4-1 shows the community involvement of Shell, BP, PETRONAS Company.
4.2.1.1. Compare and contrast community of Shell, BP and PETRONAS Company.
Let’s compare and contrast with these three companies in communities. Firstly, Shell Company’s involvement of community givens a few examples: They supply some Shell service jobs in their stations for Orphan kids, the secondary schools graduates; Shell offered 60 jobs nationwide when an initiative of Shell since 1998, they also offers around ten jobs for assistants of forecourt or servicing customers who are filling fuel, cleaning windows of cars, and checking oil and so on. These children can get equal opportunities from Shell company provides jobs. The orphan kids can be provided the job training in service stations. For activities of road safety, commitment in long term, provides respective state, local institutions involved in the own initiatives activity. In 2001, Shell got a name of National Campaign “To save 200 human lives, to put the safety belts”. In 2002, Shell got “Test for safety driving with Shell” in National Educational Campaign. For the issues, a training tools for first to third grade, financial support for “Alone on the road” in 2001 and 2002. In 2003, they also were supported by “Speed and safety” of National Campaign in order to increase the drivers who are awareness about risks when they are on the road.#p#分頁(yè)標(biāo)題#e#
While the goals of community of BP is that “Everywhere BP work; they seek to become the local energy company, bringing benefits to the local community as well as business. The success of depending on ability is to create tangible benefits from presence and gain supports in all kinds of local communities”. The projects for BP Company have a period of 20 to 30 years typically, to do this, the company takes some actions which is relevant to the local circumstances and mutually beneficial and designed to create enduring solutions, comparing to short-term fixes. For example, in financial times, BP’s contributed directly to communities in 2008 of community programmers was $125.6 million. Over the past five years, the total spending to $ 551.3million is more exceeding than their expected spending of $500 million over the terms of five years in the beginning of 2004. Thus, this distribution to communities in 2008 was accounts of $74.9million contributed in the US $20 million in the UK, $ 4.3million in other European countries and $26.4 million in the rest of the world. The Exhibition 4-2 shows the contribution to communities by region.
On the other hand, PETRONAS which is as a responsible corporate citizen, has initiated successfully and supported a variety of social, environmental and community projects, cooperation with non-profit organizations, designed to help the economic community and social opportunities for social benefits and a better quality of life. PETRONAS’ education programmer is consistent with the National goals to create ‘towering Malaysians’ who can navigate the intricacies of a rapidly globalizing world’. In the past decades, PETRONAS was used its substantial financial resources to build a wide-ranging plan called PETRONAS in Education. This programmer is to cut through the company’s various institutions in all sectors of the community, such as Persians, Education Sponsorship Unit (ESU), Petroleum Resource Centre, Universiti Teknologi PETRONAS, PERMATA, PMTSB and Malaysian Maritime Academy (ALAM).
PETRONAS has managed to work through experiential learning, best practices, education, and encouraging outstanding students at all level of society demonstrations covering a wide range of everything. That is their emphasis on integrity, ethics and nurture leaders. There is clear evidence shows that the PETRONAS in Education programmers have been built to last. PETRONAS plays its CSR role and responsibility of putting millions of ringgit in time, effort and sustainability of reintegration into the community. PETRONAS in Education is supervised by a dedicated team of professionals and adequate financial resources to create the different programmer in independent companies and institutions.
4.2.2. CSR Involvement with Education
Categories Shell BP PETRONAS
Disclosure on Education YES YES YES
1.Offer carrier path YES NO NO
2.Supply part time job and internships YES NO NO
3.Fund education and training NO YES YES#p#分頁(yè)標(biāo)題#e#
4.Education and training NO NO YES
Table 4-2 shows the CSR of education in Shell, BP and PETRONAS
4.2.2.1. Internships of Education of Shell, BP and PETRONAS
Nowadays, Shell is exposing actively for high educated and young graduates directly from universities, they also offers young graduates carrier path which is getting a high level managerial roles. Shell Company supplies part time jobs for internships students as well.
Additionally, the aim of BP for education is said that “The Company supports education because it increases opportunities among communities and provides skills that are essential to BP”. Their involvement in education is diverse and extensive. They help to fund a scope of educational programmers, from early years to learn advanced university research, building skills and community capability. Their goal is to expand the existing talent BP and other energy companies, but also advancing the problem of knowledge on issues such as the effective economic management of natural resource-rich countries and climate change. Education Investment can improve sustainable development, like BP and other companies provide skilled workers. Support local business to drives economic growth and to help local companies as qualified suppliers.
Furthermore, PETRONAS aims to continually develop the aptitude to learn and to increase the ability of staff in PETRONAS Group, within the PETRONAS Education Division. In according with PETRONAS core values of Loyalty, Cohesiveness, Integrity and Professionalism; they are committed to promoting the establishment of education cooperation, including the value of global partnering. The implementation of the overall plan which covers PETRONAS Education and Training Masterplan will see the changes of a strategic transformation within the entire education framework. This will promote the value of investment in education of PETRONAS progress. Emphasis on the concept of "The Total Learning Approach" is give, optimizing the line trainers’ usage and deploying innovative tools and technologies into cooperating knowledge-management techniques, e-learning facilities and multimedia resources, which offer a key challenge in meeting the intellectual advantages of capital development.
In pursuit to expand skill developments and borders of knowledge, PETRONAS form strategic alliances with world-class business schools, institutions and companies to establish in education programs with global partners. These initiatives will be implemented in the near future measures, include undergraduate and postgraduate courses in collaborative efforts, management procedures, advanced management procedures, research collaboration and technology-enable learning and in the future of "incubators" for entrepreneurs and management research development .
4.2.3. CSR Involvement of Employees
Categories Shell BP PETRONAS
Disclosure on Employment YES YES YES
1.Open resourcing YES YES YES#p#分頁(yè)標(biāo)題#e#
2.Flexible working hours YES NO NO
3.Home base work YES NO NO
4.Virtual team work YES NO NO
5.Universal declaration of Human Rights NO YES NO
6.Talent search exercise NO NO YES
7.Techinical or managerial track occupational mobility NO NO YES
Table 4-3 shows the employee involvement of Shell, BP and PETRONAS Company.
4.2.3.1. The issues about the Employee training in Oil Company
Firstly, Shell has People Survey to measure and check employees’ attitudes and satisfactions in annual. It is necessary to give opportunity of each employee through a policy of Open Resourcing to get a job in Shell Group Companies for all kinds of businesses across the world in element of requirements competence. Promoting on personal skills has different programs. Shell develops new ways of working, for example, flexible working hours, home based work and virtual team work.
Meanwhile, BP Company recognizes that their actions may provide with the potential impact of the rights of employees and those who live in the communities around their operations. They support for the Universal Declaration of Human Rights and their human rights guidance document outlines action on human rights in BP management’s expectations. Their commitment is to respect the embedded through a variety of policies and practices of human rights. Such as, BP’s code of conduct outlining their commitment to is fair employment and equal employment opportunity. It also makes clear expectations that employees should deal with governments and integrity of suppliers and their intent is to conduct an open and transparent dialogue and community consultations. BP Company is to achieve environmental and social practices documents, including the requirement to consider, such as the rights of indigenous peoples, involuntary resettlement and worker work fare issues. A guidance document outlines the human rights of their actions on human rights, management’s expectations.
Besides, PETRONAS is committed to recruit and retain the best and exciting and challenging areas of all kind of talent, as integrated oil and gas operations of transnational corporations across a global wide-ranging cooperation of oil and gas operation. Each year, PETRONAS finds these talents from the relevant local and overseas graduates. With continuous business growth, PETRONAS conduct regular talent search exercises to meet increasing demand of human resource. Recently, there has a more than 30,000 workforce of operating in more than 30 countries the world. PETRONAS provides along either technical or managerial track occupational mobility, as well as ample opportunities to learning and growing. PETRONAS’s career means “unleashing your truest potential”.
4.2.4. Involvement of Environment
Categories Shell BP PETRONAS
Safety involvement YES YES YES
1.Security process YES YES YES
2.Safety culture YES NO YES
3.Improve health of employees YES YES YES
4.Improve overall sickness YES YES YES#p#分頁(yè)標(biāo)題#e#
5. Collection of health and safety management control NO YES NO
6.Traffic light systems NO NO NO
7.Eliminate risk of injuries, health hazards and loss to property NO YES YES
Table 4-4 shows the different items of Safety in these Oil Company
4.2.4.1. Different Reporting of Safety Involvement
Safety involvement
Shell is conformed to get a goal of without damage for humans truly. In such approach, the goal to an HSSE performance can be great to win customers reputation and society. On the other hand, Shell Company has HSSE management in approach of systematic, for designing ensure compliance with law and achieving sustainable improvement performance. To achieve sustainable improvement performance of safety, within making goal progress towards zero casualties between need for security of the process and a strong safety culture. The continued efforts in health promotions education are to improve the health of employees results of original understanding between the aids cased four years from 2006 to 2007. In 2007, there was an improvement of overall sickness absence rate for employees over the previous years. The Total Sickness Absence (“TSA”) rate was 1.37% for 2007compared to the rate of 1.71% in 2006. To control and evaluate the performance against some objects, Key Performance Indicators (KPI’s) are critical.
Complementary, health and safety data is collected for 100%, all of BP’s business in the collection of health and safety management control. Data has not been collected in BP which is not operational command of the right, which includes state-owned entities and other operating joint ventures, including TNK-BP Corporation. Events are recorded in the local employees, contractors and management. Deaths, other serious and other major leak or fire, and the success of the Thesis is provided by UK thesis base http://m.elviscollections.com/
event along with events, free milestone in BP were also informed of the executive management. These events are communicated to all staff in the using of a traffic light system which to provide performance-friendly website on the signs of the internal. Detailed data collections are related to all incidents resulting involving employees, contractors or third parties fatalities. Incidents which cause injury or illness to working people (employees and contractors) are recorded and classified in terms of severity on using the US OSHA 300 Protocol definitions.
Lastly, within conducting PETRONAS activities of health, safety and environmental protection, they will do all practicable steps to protect , eliminate the injuries’ risk, health hazards, loss of property, and also will do positive measurement protect environment. This figures show below is the safety in PETRANAS from 2003-2007 year#p#分頁(yè)標(biāo)題#e#
Categories Shell BP PETRONAS
Disclosure on Air involvement YES YES YES
1.Develop purer fuels YES NO NO
2.Emit low levels of CO2 YES YES NO
3.Introduce low sulphur YES NO NO
4.CO2,SO2 Emissions YES YES NO
5.Global warming potential NO YES YES
6.Exploration,production and refining hydrocarbons NO NO YES
7.Prevent and reduce gas emission YES YES YES
8.Limit emission of greenhouse gases YES YES YES
Table 4-5 shows the different items of air involvement in these Oil Company
Air Involvement
Shell has done actions of protecting air in the years of its operation: To developing purer fuels, Shell is committed to lead in such way. Shell recognizes low sulphur as important fuel parameter in order to enable vehicle emissions reduced, especially example, current injection vehicles, in which is emitting low levels of CO2 and energy efficient. Hence, Shell Corporation was the first introduced low sulphur Diesel at its gas stations. Emissions of CO2 were lesser if compared to last year. Emissions of Sulphur Oxide (SO) are related to feedstock disposal and it was decreased obviously compared with year 2006 because of lower disposal of sulphur.
Shell Corporation engages in GWP contribution in kiloton’s of Carbon Dioxide Equivalent in year 2004. Emissions of Perfluorocarbon (“PFC”), Sulphur Hexafluoride (“SF6”) and Hydrofluorocarbon (“HFC”) will be contributed to GWP, but the corporation does not use these gases. In year 2007, the Corporation recorded a GWP of 1,148 kT CO2 equivalent- 2.5% lower compared with the performance in year 2004. The main distinction between the performance of year 2007 and year 2006 was attributed basically to the decreasing overall flaring owing to the operation of lighter crudes in year 2007.
The method of BP air quality management, air pollution is a major environmental risk, health, estimated to cause about 2 million die prematurely worldwide each year and lead to damage to the environment. Natural and man- made air pollutants promote local, regional and global air quality concentrations; it is often the local climatic conditions and terrain. When it is runs, there may be several sources in order to promote local air quality degradation, including transportation, housing and other industries. Business areas in which there may be several sources in order to promote the degradation of local air quality, including traffic, houses and other industries. Local and regional effects can include acidification, eutrophication, tropospheric ozone formation and haze formation. All of which may lead to impact on the environment and health effects which depend on the level of emissions. Exploration, production and refining hydrocarbons involved of infrastructure and operations, may be the emission of air pollutants in the type. BP‘s aim is to understand the impacts of air emissions may be at the local and regional environmental air quality. They try to avoid, prevent and reduce gas emissions to mitigate the impact on human health as well as the potential for damage to the environment. They also hope to reduce emissions of hydrocarbons in the atmosphere.#p#分頁(yè)標(biāo)題#e#
On the other hand, for the PETRONAS approach to the climate change is the limiting emissions of greenhouse gases into the atmosphere. From 2003 year to 2007, PETRONAS limit the emissions of greenhouse gases as figure below,
Categories Shell BP PETRONAS
Disclosure on Water Involvement YES YES YES
1.Refinery’s effluent water YES YES NO
2.Increase effluent water quality YES YES NO
3.Monitors seawater quality YES NO NO
4.Water resources in reducing poverty and enable society to develop YES YES NO
5.Water use, cooling water and water discharge NO YES NO
Table 4-6 shows the items of water involvement in these Oil Company
Water Involvement
The primary leftover produced by Shell Corporation is the oil in the sea. “The refinery’s effluent water is discharged some 1k kilo meter offing through the piping”. In year 2007, the mean oil in water concentration was 8.8 milligrams per liter (“mg/L”). Even though it is higher than the water concentration in year 2006, it is still under the legal limit of 10 mg/L. Improvement programs have been developed and improved to leadership team of Shell Company. The fourth quarter of year 2007 showed a grand enhancement in effluent water quality with oil and grease in effluent water averaging 6.2 mg/L. The Company monitors the quality of sea water at the outflow point all the time. The monitoring result does not fall away with the budget result. Reports on the quality of effluent water and seawater are sent timely to the Department of Environment.
BP’s approach to water management, under the United Nations Environment Programmer (UNEP) about a third of the world’s population lives in countries with medium to high water stress with disproportionately high impacts on the poor. Water demand will increase to in the levels of, which will make the more difficult task of providing water for human sustenance, with current projected population growth, industrial development and the expansion of irrigated agriculture in the next two decades. The UN stressed the need for more effective water management around the world and the role business can play in taking effective action. BP recognizes that agriculture, community and industry competition water needs should be balanced in order to promote sustainability. BP understands water resources play an important role in reducing poverty and enabling societies to develop. As a responsible corporate in the pursuit of sustainable growth, BP are concerned about the effects of water use and discharges to water in local communities and the environment. BP also take an integrated approach to water use, cooling water and water discharges and place emphasis on preventing pollution and minimizing impact at source. The environmental impact on water with regard to operations depends on the location, nature and scale of withdrawal and emissions. BP evaluate the significance locally, and develop water management plans to reduce the impacts as part of Environmental Management System (EMS).#p#分頁(yè)標(biāo)題#e#
Categories Community Education Employment Safety Air Water
Quality YES YES YES YES YES YES
Quantity YES NO YES YES YES YES
Table 4-7 shows the type of reporting in these Oil Company
In this table, it shows each involvement gets both quality and quantity except education of quantity. In community involvement, for example, BP invests $125.6million in community programs, and how successful in part of their capability to create tangible benefits and so on. On the other hand, for the education involvement, these three companies only disclosure about the quality about for skills. For instance, PETRONAS develop strategy with world-class business schools and companies to establish in education programs in pursuit to expand skill development and borders of knowledge. While the employment in those oil companies, Shell upgrade on individual skills for different programs and provide new and contemporary ways of working. BP supports the human rights for the employees and conducts their commitment for fair employment and equal employment chances. Lastly, PETRONAS show how many workforce of operating in the worldwide.
For safety of environment, these oil companies’ disclosure how they make progress towards goals of zero for security and safety cultures and report the collection of safety management control data every year. For the air involvement of CSR, how Shell, BP and PETRANAS reduce the emission level of CO2 and SO2, and measure the global warming potential to improve the air quality, on the other hand ,for example, Shell provide the emission of CO2 and SO2 reporting from 2004 to 2007. Finally, CSR for the water involvement, for example, Shell offers the approach water management to refinery’s effluent water and effluent water quality and report the quantity for oil in effluent water.
4.3. Top Innovate CSR Ratings of Integrated Oil and Gas Companies (Shell and BP)
Shell and BP are the top performers of the innovation of integrated oil. It indicates how strongly the company manages the scope of activities. CSR leaders such as Shell and BP are all addressing climate switch in important ways.
4.4. Sustainability Report 2007 of Oil Industries
For the fourth consecutive year, Shell is the world's best sustainability Oil Company, corporate governance, social responsibility (CSR), ethics and transparency, according to the fourth annual oil/gas ranked by the sustainability research and evaluating firm Management & Excellence (M&E), Madrid. BP was ranked the fourth. The annual M&E ranking evaluates oil/gas companies' compliance with 386 relevant international standards such as those of SEC (Securities and Exchange Commission), national laws, Sarbanes-Oxley, Dow Jones Sustainability Index, OECD, industry standards, GRI, ILO (International Labor Organization), ISO(International Organization for Standardization), IUCN. Most Sustainable Oil Companies 2007 (compliance scores)
1. Shell 90.16%
2. Petrobras 89.64%
3. Total 86.01% #p#分頁(yè)標(biāo)題#e#
4. BP 81.35%
5. Repsol 74.35%
4.4.1. Meeting International Management Standards
Shell agrees to meet the principles of sustainable development in contemporary human needs without compromising future generations to meet their needs. Company which is as part of Shell Malaysia is in favor of the same principle of sustainable development. The code of conduct is need to make business decisions, giving proof of economic, social and environmental sense of responsibility and the community can accommodate.
Nowadays, sustainable development is not merely related to protection of the environment but also social concerns, it should care for the economic performance. To maintain healthy bottom-line, companies should prove a good environmental and social performance. Through the policy of sustainable development, Shell Malaysia has business of integrating the economic, environmental and societal, in order to achieve sustained financial success to protect our environment and develop good reputation as a partner, a wide range of audiences that preferred suppliers’ reputation. They are shareholders, employees, consumers and people who do business with Shell, as well as community and coming generations, they all expect Shell be in touch with, listen to their views and work with developing to meet their expectations changing.
4.4.2. Sustainability Report2007 for BP
Sustainable development report of BP is defined as the ability to withstand as a group: by renewing assets; creating and providing better products and services to meet the changing needs of community which has attracted generation after generations of employees; promotion of a sustainable environment; and retaining the trust and support of customers, shareholders and the communities in which BP operates. BP Sustainability Report 2007 solutes the question which have been identified as most important to their audiences. This report is aimed at specialist audiences with an interest in BP’s sustainability performance, including academics, investors and non-governmental organizations. In addition, online reporting covers a wider set of issues and reports on them in more depth.
Certain forward-looking statements are contained in BP Sustainability Report 2007, particularly those relating to the implementation and some security and environmental-related measures are completed; BP plans in development of hydrogen power plants and for the joint venture with Rio Tinto. Because of their nature, forward-looking statements involve risks and uncertainties because they relate to events and circumstances which will or may occur in the future. Actual results may be difference from those depending on a variety of factors.
4.4.2.1. The effect of reporting approach
Part of non-financial performance communications is formed in BP Sustainability Report 2007, which includes collectives, national and site-level reporting. BP Sustainability Report 2007 covers the period 1 January 2007 to 31 December 2007 of BP group activities. Approach of BP to materiality is an important driver in the way which identifies issues for inclusion in sustainability report. The matrices are also used when we engage with BP’s senior executive team, the safety, ethics and environment assurance committee, as well as with auditors to provide context on decision-making on which issues to include in reports. BP continues to assess the reactions of readers to the content and presentation of report via surveys, interviews, benchmark studies and workshops. The research in 2007 focused on US-based socially responsible investors, with a series of interviews exploring the success of the report in meeting their needs and identifying areas for improvement in future reporting. BP’s 2007 report is aligned to the Global Reporting Initiative’s (GRI) G3 sustainability reporting guidelines released in 2006, to an A+ level. This is alongside the strict application of materiality process to ensure that only report on those G3 indicators that are relevant to business. BP provides a complete index against both core and additional indicators and provides information on why have not reported against certain indicators in report. For the third year, BP maps the indicators to the IPIECA/API Oil and Gas Industry Guidance on Voluntary Sustainability Reporting. #p#分頁(yè)標(biāo)題#e#
4.4.3. PETRONAS Group Sustainability Report 2007
In all business activities, PETRONAS acknowledge the importance of maintaining the belief and confidence of shareholders, employees, customers, business partners and communities wherever company operates. This sustainability report describes the commitment to balance commercial, environmental and social benefits while managing petroleum resources.
Chapter 5
Finding and Conclusion
5.1 Finding of Research
Shell Company gives equal attention to caring for their environment and fulfilling their corporate social responsibility (CSR) obligations by contributing to social development in their community, education, employment, in order to strive for maximum returns to shareholders. They encourage and support diverse community, for example, Shell offer jobs, test reactions of drivers and test safety driving programs, and education. Shell is well done in the society community and environment involvement of CSR, especially, the air involvement and water involvement part.
In view of the research, BP corporate responsibility, BP will go to those who can anticipate in the environment involvement part well. It will help define companies, define reputation, define performance and define the boundaries between governments, companies and civic society. Corporate Social Responsibility is not an add-on, a set of charitable activities undertaken to demonstrate. Additionally, BP takes a good job with the improvement overall sickness and collection of health and safety management control in the safety involvement. On the other hand, BP also plays a role in emitting low level CO2 and limit emission of greenhouse gases. Finally, BP takes responsibility of increase effluent water quality in water involvement. It is about constructive and responsible engagement in all the countries in which BP operates on the basis of long-term mutual advantage. To stay in business for the long term, BP must demonstrate that they are part of society, making a unique and valuable contribution to environment and social development through responsible operations on a responsible basis. In the end, BP strives to be a force for good and human progress in Malaysia. Corporate Social Responsibility Sustainability remains at core of their businesses, driving everything they do.
PETRONAS is doing well in Corporate Social Responsibility activities. While PETRONAS pays more attention on non activities in the water involvement of environment. Pursuing to be a sustainable corporation, PETRONAS must start excising “true” Corporate Social Responsibility incurred by its operations which are seeking renewable and sustainable energy sources actively. In order to moving sustaining phase, PETRONAS must treat environment firstly as its definite stakeholder. PETRONAS’s Corporate Social Responsibility (CSR) activities are good, but are not enough and sustainable, such as the water improvement. Taking ownership direction to be a sustaining corporation which is PETRONAS must do. #p#分頁(yè)標(biāo)題#e#
5.2 Conclusion
In this research, it can be said that the area of corporate social responsibility (CSR) has a rapid growth in the past years and has become a global trend. Companies such as Shell, BP and PETRONAS, are now taking into account of the specific performance in various aspects. For example, it is not only about their financial results, but also their social and environmental performance. Therefore, more organizations are having serious efforts to identify and adopt CSR into all aspects of their operations.
With regard to terms used to describe companies’ responsibility of the society and environment, the most striking feature may be important to the concept of diversity, although the terms ‘Corporate Responsibility’ and ‘Corporate Social Responsibility’ are the most popular terms. The EU Commission’s emphasis on CSR mainly involving the efforts to move beyond formal legal requirement, the companies are asked about their awareness understanding of this issue. The main finding was that the companies do not agree with the EU Commission, as they give prime emphasis to CSR being a tool to achieve, to comply with mandatory social and environmental legislation. With regard to the issue of overall corporate CSR ‘visions’ and statements, all companies had such written statements. Almost all include promoting gender equality, and the majorities also includes mitigation of climate change and reduce the risks of chemicals.Finally, for the contribution of CSR instruments to performance, the most important ones is obviously ‘company specific’ instruments and to a lesser extent the more ‘standard’ tools. External influences on companies’ view and the self-confidence was high. There was a widespread belief that they have both helped lead to other companies’ innovation and the establishment of the conceptual basis of the new legislation.
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