Corporate Responsibility: Scrutinizing a Company Report - Assignment Example

Corporate Responsibility: Scrutinizing a Company Report - BP Introduction British Petroleum (BP) is one of the largest petroleum companies in the world operating in about 80 countries across the world. Arguably, the reputation and the growth of BP have given it a competitive advantage over other firms but the major oil spills in Alaska, Texas and the Gulf of Mexico have raised questions about BP’s sustainability especially in case of another oil spill in the future. The oil spill in the Mexican gulf created ecological, environmental as well as economic destructions in the area. These resulted in damaged coastline, pollution, death of people and fish among others (Summerhays and Villiers 111). Corporate social responsibility (CSR) can be defined as a commitment by a firm to operate ethically and contribute to economic development while at the same time improving the living standards of the workforce, their families and the society at large (Sims 43). CSR has become an increasingly important practice to various organizations in the world. According to Banerjee (55), BP is one of the multinationals “with the highest CSR profile”. Some of the main social and environmental issues and challenges that concern BP include climate change and global warming, pollution and employees safety and individuals safety in the society at large. Notably, BP has developed an internal trading system, which allows them to trade emission permits in order to achieve a corporate goal for greenhouse gas emissions. In addition, it is investing resources in solar power, wind energy and hydrogen storage to be able to address the problem of climate change and global warming. Moreover, BP has developed mechanisms to help in cleaning up and restoring the ecology of the places affected by the oil spill. Some of the factors that have shaped CSR in different branches of BP are diversity, partnership with non-governmental organizations, and adoption of measures with a positive environmental impact among others. Globalization has helped in promoting diversity and this has in turn shaped CSR in the sense that it has effectively addressed the possible problems emerging from cultural differences. More so, non-governmental organizations have shaped CSR by establishing certain initiatives that benefits the community members and promotes their welfare. In addition, ecological sustainability is one of the major interests of CSR and it includes concerns over pollution, depletion of natural resources, and climate change among others. Therefore, adopting policies that have positive impact on environment has really helped in shaping CSR in this company. Corporate reporting is very important as it provides information about the problems, failures and success of the company. Moreover, sustainability reports helps in disclosing the company’s performance along socio-economic and environmental parameters. This paper presents a report on corporate responsibility of BP, covering the environmental and social challenges that this company faces. Role of CSR in BP Undeniably, CSR has influenced BP’s core activities. After BP experienced major oil spills, particularly the spill on the Mexican gulf, it started to implement CSR initiatives, which focused on an organizational goal of safety and operational responsibility. Indeed, CSR has contributed to change BP’s core values by introducing such initiatives like non-operated joint ventures, upstream restructuring, risk management and safety and operational risk. The company aims to deal with external issues that may affect individuals or interfere with the company’s operations (“Building a Stronger, Safer BP” 31). This implies that the operations of this company are designed to meet the social and environmental expectations. BP has identified areas that needs improvement and has made recommendations to address various issues such as personal safety and clarification of responsibilities among others (“Building a Stronger, Safer BP” 31). Arguably, CSR can be used both as a method of correction for bad correction for bad practice or as a way to seek new opportunities. As a method of correction, CSR is used to address the issues affecting the environment, employees’ welfare and the society. Mostly, in many companies, CSR policies are implemented to ensure that their operations uphold health and safety of employees and are environmental friendly. In the case of BP, the management used CSR to address the oil spill catastrophe and restore the affected areas. One of BP goals includes responsibility to the societies in which it operated and the entire world. Therefore, BP ensures that its operations do not harm individuals and protect the environment. BP uses CSR to ensure that their operations are safe, reliable and socially responsible. On the other hand, CSR can as well be used as way of seeking new opportunities. For instance, companies can embrace and maintain CSR to attract new and retain existing clients. This is possible because societal members are more likely to buy products from a company whose operations guarantees their safety and protects the environment. CSR is offering new ways of engaging with people, employees and consumers through social media such as twitter where stakeholders can ask any question, air out their concerns and receive feedback. BP engages its workers using various internal communication channels to be able to keep the workers cognizant about their work. In addition, BP engages with the local people via public consultations and conferences with community representatives. In addition, BP has approximately ninety thousand consumers in various countries and these customers are engaged through social media, focus group and in-depth interviews and these are some of the effective ways the company uses to market its products and get feedback from the consumers (“Building a Stronger, Safer BP” 46). Interactive dialogue through the social media has enabled BP to engage with individuals effectively, employees as well as their customers. Interacting with the employees and consumers is very important to be able to motivate employees and increase employees, and build customer loyalty respectively. BP has a number of stakeholders and it includes stakeholders’ input through endorsement. While many stakeholders are more interested in the environmental and social impact of the company’s technologies like hydraulic fracturing, some focuses more on global issues like climate change and human rights. Normally, BP listens to stakeholders’ concerns then responds to them accordingly. Concerning its future business, BP addresses future issues such as dwindling resources, population growth and environmental degradation. Following rapid growth of population, BP has developed strategies to help them increase their performance and productivity to be able to provide their customers with enough fuel continuously, energy and lubricants. BP has taken the issue of ecological sustainability very seriously. Environmental concerns are one of the most important issues in BP’s culture. For instance, the company introduced a course on ecological monitoring as part of their employee-training package. BP has revealed effective initiatives to minimize its own carbon emissions and assist shape future alternative forms of energy. In order to conserve the environment and address environmental issues such as climate change and global warming, BP has been focusing on ways to reduce emission of substances that have negative impact on the climate. For this reason, the company advocates for the use of methane and other short-lived climate forcers (“Building a Stronger, Safer BP” 36). BP has been able to reduce their emissions and persistently look for ways for further reductions. Reports show that it managed to reduced greenhouse emissions by 10 in 2010 (Banerjee 56). The company has developed effective measures to limit the number of accidents and ensure that individuals are safe and the environment protected. In addition, BP has also addressed the problem of pollution and it has come up with ways to reduce or eliminate pollution in their current and future operations. BP’s disclosures significantly contribute to their beneficial perception in society. Disclosures through sustainability reporting are a useful strategy to build value by creating trust among diverse stakeholders. BP adopted an image enhancement strategy to make disclosures and manage the perception of the relevant public (Summerhays and Villiers 121). BP has remained as one of the most credible oil companies in terms of environmental efforts and creation of alternative fuels as it has pledged in its CSR (Esposito 214). By communicating that it is socially and environmentally responsible for oil spill, BP managed to recover from that crisis faster because consumers are glad and are more likely to keep companies with a good CSR reputation. Conclusion BP is one of the largest petroleum companies globally operating in different countries across the world. It has experienced three major oil spills in the past few years, which have cost it its reputation and growth. However, through corporate social responsibility, the company has managed to disclose its accountability and responsibility and this has enabled BP to win the trust of their stakeholders. The environmental challenges that BP face include pollution, climate change and global warming, and the social issues include individuals’ safety and satisfaction. BP has announced different initiatives to help them in reducing their own carbon emission. Corporate social reports have helped the company to disclose its social, economic as well as environmental performances. Moreover, BP has used CSR to correct its mistakes and develop effective measure to ensure ecological sustainability and individuals’ safety. Undeniably, corporate responsibility helps companies to strengthen their image and uphold their reputation. Corporate responsibility positively affects BP and its operations both at present and in the future because maintaining a high CSR profile helps the company to maximize their profits, protect the environment, ensure employees’ safety and attract more customers and this is because it operates in a socially responsible manner. Recommendations Corporate social responsibility is a very important activity that every organization should embrace. It is all about managing an organization in a socially responsible manner. Every organization should ensure that they maximize their profits but also consider the social and environmental concerns during their operations. More so, all companies worldwide need to understand the concept of CSR since organizations that have embraced CSR have a competitive advantage over others in the global market because consumers like products that have produced in a socially responsible manner. In addition, organizations should not always focus on making profits but they should as well consider environmental factors and social welfare of their employees and consumers. This project has created a deeper understanding of corporate responsibility and strategic management, I have realized that these issues are very important for any organization and that those companies that have embraced them have a competitive advantage, and they maximize their profits responsibly. CSR enables companies to report benefits to their performance and disclose their failures. CSR is more concerned with the environment, safety and health of employees and individuals in the society. Therefore, bigger companies should ensure that they maintain CSR in order to protect the environment and ensure people’s safety. Works Cited Banerjee, Subhabrata B. Corporate Social Responsibility: The Good, the Bad and the Ugly. Cheltenham, UK: Edward Elgar, 2007. Internet resource. “Building a Stronger, Safer BP”. Sustainability Review, 2013. Print. Esposito, Mark. Put Your Corporate Social Responsibility Act Together! Oklahoma: Tate Pub & Enterprises Llc, 2009. Print. Sims, Ronald R. Ethics and Corporate Social Responsibility: Why Giants Fall. Westport, Conn: Praeger, 2003. Print. Summerhays, Kimberley and Villiers Charl. Oil company annual report disclosure responses to the 2010 Gulf of Mexico oil spill. Journal of the Asia-Pacific Centre for Environmental Accountability. 2012, Vol. 18, No. 2. 103- 130. Read More