Organizations the world over have used diverse ways to implement corporate social responsibility (CSR), ranging from a focus on “social” responsibility to the inclusion of environmental responsibility, green supply chain, corporate citizenship, and sustainability programs (Flammer 758). The present paper not only investigates how British Petroleum (BP) implements socially responsible practices into its operating procedures, but also evaluates the impact of these practices on the company’s stakeholders.
Company Overview
With well-established operations spanning all continents, BP is a leading integrated oil and gas company engaged in providing “customers with fuel for transportation, energy for heat and light, lubricants to keep engines moving and petrochemicals used to make everyday items as diverse as paints, clothes and packaging” (British Petroleum 1). The company has over 80,000 employees, with most of them based in Europe and the United States. In 2013, the economic value generated by BP stood at $403.3 billion, while its economic value distributed to others stood at $342.6 billion (British Petroleum 4).
Stated Commitments to CSR
BP’s stated commitments to CSR include (1) supporting communities’ efforts to increase income and improve standards of living, (2) striving to be a world-class operator, a responsible corporate citizen and a good employer, (3) working to avoid, minimize and mitigate environmental impacts in its areas of operations, (4) engaging in joint venture partnerships with other companies to address carbon and climate risk, (5) empowering employees, and (5) investing in alternative energies (British Petroleum 4-23).
BP’s CSR Performance
In terms of employee/labor relations, the company has performed well in encouraging women participation in leadership, facilitating workforce diversity and inclusion, attracting and retaining the best talent through strategic recruitment, rewarding employee performance through executive remuneration and other benefits, building capability through leadership development, and entrenching a code of conduct that defines its commitment to higher ethical standards (British Petroleum 20-23).
In terms of environmental impacts, BP has received much support globally for its hands-on standpoint on environmental challenges, most notably for not only investing heavily in technologies aimed at reducing the carbon footprint, but also advocating for the use of alternative sources of energy such as biofuels and wind energy (British Petroleum 15-18; Christiansen 1). In particular, BP has performed well in:
- monitoring national and international climate and energy policy developments,
- encouraging the growth of natural gas and other sources of low-carbon energy,
- educating customers on the efficient use of fuels and engine oils, and
- mass planting of trees to reduce the carbon footprint (Flammer 761).
The social impacts of BP’s CSR initiatives have been witnessed in terms of the company’s attempt to support communities’ efforts to increase income and improve standards of living through supporting small business ventures, investing in healthcare and education, and offering employment opportunities to the local people. However, it should be remembered that the company has been accused of human rights abuses in Columbia, corruption and lack of transparency in Angola, and associating with tainted companies (Christiansen 8-12).
Lastly, it can be argued that BP has performed extremely well in complying with the law, national and international standards, as well as social, economic, and environment reporting initiatives. Although the company faces diverse and complex laws and regulations owing to the fact that it has operations in around 80 countries worldwide, it has been largely successful in managing the applicable legal and regulatory health, safety, security and environmental obligations through its operating management system (British Petroleum 35).
Assessment
Drawing from the above exposition, it is evident that BP’s CSR policies have a substantial effect on its actions, as witnessed by how the company has continued to allocate huge amounts of money to drive the mentioned CSR initiatives. The company’s actions are clearly driven by:
- its desire to maintain a low carbon footprint in the atmosphere,
- its aspiration to develop human resources potential to the fullest potential, and
- its obligation to support the local communities in their efforts to increase income and improve living standards.
CSR policies are known to affect the company’s competitiveness, reputation, and stock price in national and international markets (Flammer 759). Consequently, BP is more likely to attract more talented employees due to its attractive employee/labor relations, not mentioning that it is likely to develop a positive reputation in areas it has engaged in activities to support local communities in their efforts to increase income and improve living standards. In recent years, customers have been found to increasingly identify with responsible organizations that not only take care of the environment, but also practice green supply chain operations to reduce the carbon footprint (Sharma & Mehta 69-71). This implies that BP will continue to be competitive as it is engaged in all these efforts, lending credence to the assertion that the company will be better off than it would have been if it stuck to a framework where its only responsibility is to avail profits to shareholders.
Conclusion
Overall, it is evident that BP has done remarkably well in its CSR policies and initiatives. Owing to its quest to conduct its operations using the triple bottom-line approach (social, economic, environmental), the company continues to win the hearts of many supplies, customers, employees, community members and other stakeholders, implying that it will continue fulfilling its obligations to its shareholders, the community, as well as the environment. However, the company needs to limit its association with tainted companies as well as seal loopholes that could lead to corruption. The company also needs to invest more in reducing the carbon footprint in the environment, bearing in mind that it deals with products that have been largely criticized for their increased contribution to global warming.
Works Cited
British Petroleum 2013, BP Sustainability Report 2013. Web.
Christiansen, Atle Christer 2002, Beyond Petroleum: Can BP Deliver? Web.
Flammer, Caroline. “Corporate Social Responsibility and Shareholder Reaction: The Environmental Awareness of Investors.” Academy of Management Journal. 56.3 (2013): 758-781. Business Source Premier. Web.
Sharma, Surya Kant and Sunita Mehta. “Where do we go from Here? Viewing Corporate Social Responsibility through a Sustainability Lens.” Journal of Contemporary Management Research. 6.2 (2012): 69-76. Business Source Premier. Web.