Corporate social responsibility plan. Royal Dutch Shell Corporation - Research Paper Example

? Corporate Social Responsibility Plan Royal Dutch Shell Corporation Number, Year Level, Section Academic December 3, Corporate Social Responsibility Plan for Royal Dutch Shell Introduction In this paper, I intend to provide managerial directions for the corporate social responsibility (CSR) program of Royal Dutch Shell Corporation. However, to put the discussion in proper perspective, I like to begin by giving a brief background on the company—its current corporate strategy and business operations. With this, I like to underscore the business framework presently used by the company in all its business operations. Then, I like to highlight the primary issues being raised by concerned stakeholders on how the company manages its carbon dioxide emissions in relation to climate change. In exploring this subject, I wish to shed light on the significance of creating a timely and strategic corporate social responsibility program that strengthens and nourishes the corporate identity and image of Shell. I like to end this paper by presenting specific executions for the CSR program. I. Company Background: Royal Dutch Shell Corporation As a corporation that positions itself as the “leading innovator for the energy future”, Royal Dutch Shell or Shell aims to maintain sustainable development by delivering its short-term and long-term business interests with economic, environmental, and social considerations (Royal Dutch Shell A, 2009). Through sustainable development, Shell believes that it is able to: firstly, govern the way it develops new oil explorations and projects on alternative energy; secondly, manage its downstream supply chains; and lastly, share its benefits to society by delivering quality products and by spearheading community projects (Royal Dutch Shell B, 2010). Shell is present in more than 90 countries worldwide, has 93,000 full-time employees, and maintains a fuel retail network of around 43,000 service stations (Royal Dutch Shell C, 2001). In 2010, Shell was able to produce 3.3 million barrels of oil equivalent per day while it generated earnings of $20.5 billion. It spent $23.7 billion on net capital investment while it spent over $1.0 billion on research and development (R&D). The business operations of Shell are classified under three major categories—upstream, downstream, and projects and technology. Firstly, Shell Upstream is involved in the search and recovery of oil and natural gas; and the extraction of heavy oil from oil sands for conversion into synthetic crudes (Royal Dutch Shell C, 2001). Secondly, Shell Downstream is involved in the manufacturing, supplying, and marketing of oil products and chemicals worldwide. Businesses under manufacturing and supply include refineries, chemical plants, and the supply and distribution of feedstock and other products. On the other hand, businesses under marketing sell a range of products including fuels, lubricants, bitumen, and liquefied petroleum gas for home, transport, and industrial use. Lastly, Shell Projects and Technology manages and drives the research and technology development programs for major projects of Shell. It provides technical services and technology capability to the Upstream and Downstream businesses. At this point, it is crucial to highlight that the company engages in business activities that have direct impact on the environment. For one, most Shell upstream operations need elaborate technologies that would guide the extraction of oil from the sea bed. As for its downstream arm, Shell recognizes the volume of carbon dioxide being emitted by its refining plants. Therefore, there is a strong and direct link between profitable business and responsible waste management. II. Climate Change and Managing Carbon Dioxide Emissions. Shell recognizes its significant role in halving the carbon dioxide emissions by 2050 to avoid the worst effects of climate change. However, the company believes that the actions needed to alleviate the impacts of climate change must be reconciled with issues concerning population growth, economic growth, and extraordinary growth in demand for energy (Rogers, 2011). With this, the company reckons that the demand for energy is expected to double by 2050, as being driven primarily by the ballooning population and the positive economic developments in Asian countries. In this sense, the company believes that the primary sources of energy needed to support such energy demand will have to come from fossil fuels—coal, oil, and gas. In support of this finding, although the energy supplies coming from the lower carbon dioxide energy sources are expected to grow and represent more of the future energy mix, the company thinks that it will take time for newer energy technologies to become affordable and available at a scale (Rogers, 2011). Thus, the dependency on fossil fuels. In this regard, Shell maintains sustainable development by ensuring responsible business operations. Firstly, it continues to supply more natural gas for electricity generation. Since one-third of the carbon dioxide emissions come from electricity generation, replacing coal with natural gas can lessen the emissions by half. Secondly, Shell supports the creation of more bio-fuels for road transport. By introducing the technologies of electric and hydrogen energy in road transportation, Shell hopes to offer the most practical and commercial way to diversify and reduce the carbon dioxide emissions over the next 20 years (Rogers, 2011). In this light, Shell has made a leading investment in the production of Brazilian sugarcane ethanol, the lowest carbon dioxide emitter for the bio-fuels category. And lastly, Shell furthers the introduction of its Carbon Capture and Storage (CCS) technology to mitigate its emissions and contribute in the protection of the thinning ozone layer. CCS is designed to: (1) capture carbon dioxide emissions from large industrial facilities, such as coal-fired power plants and oil and gas operations; (2) transport the captured carbon dioxide through pipelines; and (3) permanently store the carbon dioxide in deep, secure underground rock formations of about 1 to 5 kilometers (Royal Dutch Shell D, 2011). III. The Core of the Corporate Social Responsibility Program As the head of the CSR planning team of the corporate communications arm of the company, I strongly believe that the company’s profitability cannot be divorced from its social responsibilities as a commercial entity. Going back to the general business principles of Shell, it is important to underpin the core values of honesty, integrity, and respect for people in all of Shell’s business operations in order to build and enhance meaningful relationships with its stakeholders (Stapleton, 2011). The relationship between good business practices and steady business growth has been proven by various business textbooks and management journals. Such relation is more crucial when an energy company such as Shell is taken into consideration as it is always under close examination by various stakeholders such as the government and other non-profit organizations. Although the business framework of Shell is guided by the principles of sustainable development as seen in Appendix A, it is important for the company to conduct external activities that will communicate its commitment to protecting the environment—thus its CSR program. It is important to highlight, however, that such program is not just meant to create an illusionary image about the company, but rather, to reinforce the company’s values by creating activities that leave positive impacts on society. In this light, the heart of the CSR program for Shell directly addresses the problem of climate change, which is called ‘Project Better World’. The project marries both Shell’s commitment in advocating sustainable development and its mission of gaining positive image from involved audiences. It is crucial to highlight, however, that the activities included in the Project are not formed by the company itself. In this matter, the CSR planning team thinks that providing volunteer groups in current non-profit projects will mark the sincerity of the company in furthering such causes. Thus, such volunteer employees stand as brand ambassadors for the company. An overview of the overall CSR strategy and specific executions can be seen in Appendix B. IV. Project Better World The ‘Project Better World’ is a staff-driven organization that is aimed at building awareness on sustainability development and creating value through the provision of volunteering opportunities in the economic, environmental, and social spheres (Project Better World A, 2011). In this sense, there are three primary organizations in which PBW takes part of: Earthwatch, World Heritage Program, and National Team Network. A. Earthwatch Earthwatch is a global environmental non-government organization (NGO) that promotes the protection of the natural environment through public education and scientific research (Project Better World B, 2011). With its emphasis on ecosystem services, climate change alleviation, and cultural heritage conservation, the organization aims to: firstly, increase scientific knowledge about the environment; secondly, develop environmental leaders who will not increase awareness but induce action from the public; thirdly, widen the understanding of the public on environmental policies, agendas, and plans; and lastly, enhance natural and socio-cultural impact (Project Better World, 2011). Shell participates in Earthwatch by offering the Shell volunteer employees with a special two-week long fellowship program that is aimed at contributing to the sustainable management of the earth’s natural resources. Through this tie-up volunteering project, Shell employees are able to: (1) get hands-on experience with sustainability issues and research; (2) enhance their personal and professional skills by taking them out of their comfort zones; (3) put a face on Shell and show the dedication of the company to real environmental progress; (4) contribute internally to tangible and sustainable improvements within Shell; and (5) contribute externally to environmental conservations efforts in societies (Project Better World B, 2011). B. World Heritage Program The World Heritage Program is a project created by UNESCO that aims at protecting the natural resources across the world. Shell intends to help in this project by providing mentors to UNESCO World Heritage Site staff to improve their business skills and better manage the natural areas. The volunteer mentors, who come from planning, finance, operations, and marketing departments, provide a holistic training program to the staff by emphasizing on these key areas: (1) business planning and proper revision of business plans for involved natural sites; (2) development and implementation of business plans; and (3) evaluation and monitoring of such plans (Project Better World C, 2011). In order to ensure that the right volunteers are chosen as mentors, Shell has outlined rigorous application and training phases for the program. Also, in its aim of instilling the value of discipline, Shell expects the volunteer mentors to cover their own travel and accommodated costs, Visa and food costs, and other miscellaneous expenses and personal field equipment. C. National Team Network The National Team Network (NTN) is a group of Shell employees who come from various business units whose mission is to build awareness on sustainable development and provide value to Shell through tangible volunteering opportunities (Project Better World D, 2011). In this sense, NTN is open to all Shell employees in order to set-up a network that facilitates the creation of new teams in various global locations. V. The Value of the CSR Program As discussed earlier, the primary objective of Project Better World banks on the enhancement of the overall corporate image of the company by communicating its commitment in protecting the environment by supporting various cause-oriented projects. Since it is difficult to measure the changes that such program can bring on the attitude of the public toward Shell, the team believes that the creation of an apt evaluation tool that assesses the behavioural change of the public, both in the short-run and long-run, is highly necessary. From a business standpoint, the CSR program can be used as an effective communication channel to impart the unique Sustainability Program of Shell (as discussed in Chapter II). Although such strategy is risky as it can create the impression that such initiatives are commercially-driven, the CSR planning team believes that the solution lies in the proper crafting of message deliveries. Through the volunteer Shell staff, the company can have unofficial brand ambassadors who can communicate the actions that the company is taking to play its role in the protection of the environment such as the Carbon Capture and Storage Technology. Through them, we can reinforce the credibility and sincerity of the company in protecting the environment. VI. Conclusion In conclusion, I like to reiterate the value of the CSR program in contributing to the overall enhancement of the corporate image of Shell, which leads to secure and stable business growth. Although it is quite a challenge to communicate how Shell conducts its business both profitably and ethically, I believe that such mission can be attained once concrete actions are undertaken for the public’s awareness and knowledge. Appendix A: The Current Business Strategy of Shell The current business strategy of Shell is guided by its Focus Framework that emphasizes on: (1) customer focus; (2) profitability and performance; (3) sustainability and growth; and (4) value-added technology. This framework aligns all of Shell business operations—upstream, downstream, and project and technology—to attain its primary vision of being the world’s most innovative company. Stapleton, Helen, 2011. Shell General Business Principles. Retrieved 12 December 2011 from http://sww.shell.com/ethicsandcompliance/sgbp/ Appendix B: CSR Strategy Diagram The diagram explains the importance of the CSR program in enhancing the corporate image of Shell. The strategy used is to support on-going projects by various non-profit organizations that advocate the conservation of the environment. By getting volunteers from Shell’s internal staff members, they become effective brand ambassadors for the company. This is particularly important in reinforcing the commitment of Shell in protecting the environment by taking specific measures. Through this visibility, the perception of the public is targeted to change for the better. This, in turn, is expected to add value not only to the brand image of the company, but also to the company’s bottom line. Appendix C: CSR as a Communication Channel This diagram summarizes the effectiveness of using the CSR program as a communication channel in delivering the commitment of Shell in conserving the environment by strictly following its Sustainable Development Program in all of its business operations. List of References Royal Dutch Shell A, 2009. Shell Brand Update. Retrieved 12 December 2011 from http://sww.shell.com/sbi/brand_strategy/Brand_Strategy_Introduction.pdf. Royal Dutch Shell B, 2010. Sustainability Report. Retrieved 12 December 2011 from http://sustainabilityreport.shell.com/2010/servicepages/downloads/files/all_shell_sr10.pdf Royal Dutch Shell C, 2001. This is Upstream. Retrieved 12 December 2011 from http://sww.shell.com/ui/. Royal Dutch Shell D, 2001. CCS Diagram. Retrieved 12 December 2011 from http://sww.shell.com/co2/co2_story/co2_story.html. Rogers, Heather, 2011. CO2 and Climate Change Narrative. Retrieved 12 December 2011 from https://sww-knowledge.shell.com/knowhow/livelink.exe/fetch/-2621629/104096349/125625786/128105014/126232144/CO2_narrative.pdf?nodeid=125638999&vernum=5 Stapleton, Helen, 2011. Shell General Business Principles. Retrieved 12 December 2011 from http://sww.shell.com/ethicsandcompliance/sgbp/ Project Better World A, 2011. Shell Project Better World. Retrieved 12 December 2011 from http://sww.shell.com/pbw/ Project Better World B, 2011. Earthwatch. Retrieved 12 December 2011 from http://sww.shell.com/pbw/earthwatch/about.html Project Better World C, 2011. World Heritage. Retrieved 12 December 2011 from http://sww.shell.com/pbw/earthwatch/world-heritage.html Project Better World D, 2011. National Teams Network. Retrieved 12 December 2011 from http://sww.shell.com/pbw/national/ Read More