Corporate Social Responsibility

1. Corporate Social Responsibility Energy Law Presentation Lois Kim & Conor Weber Jeongloiskim@gmail.com & Conor.weber@gmail.com

2. Our Picture

3. Summary of Presentation History of Corporate Social Responsibility (CSR) Current Status- Oil and Gas Companies Praise and Criticism Pros/Cons-the Debate Conclusion and Recommendations

4. 1. History of CSR • Concept • “corporate social responsibility”- 1970s • The inclusion of public interest into corporate decision-making • The Triple Bottom Line • People, planet, profit OR • Economic progress, environmental progress, social progress

5. History Cont. C. Shareholders vs. Stakeholders a. Shareholders: own shares in an organization b. Stakeholders: on whom an organization’s activities have an impact D. Three Categories by the Economist a. Corporate philanthropy b. Risk management c. Win-Win

6. History Cont. E. Other Approaches a. Philanthropy as a means of CSR b. The Community-based development approach c. Incorporate the Shared Value Model

7. 2. Current Status- Oil and Gas Companies Shell Chevron BP ExxonMobil

8. A. Shell • Background • Created in 1907 • Largest energy company and second largest company • 102,000 employees in more than 100 countries

9. A. Shell b. Camisea-Peru i. First major foray into international CSR activities ii. Embracing the concept of sustainable development • Tripod: economic progress, environmental progress, and social progress iii. Rights to Explore • Fields of natural gas in the Camisea

10. A. Shell iv. Pledge standard of sustainable development • “Improving the quality of life…and • nonrenewable resources are used wisely… future generations in mind.” v. Contract and Smithsonian Survey • A two-year contract in 1996: explore with minimal disturbance • The Survey: Emphasis on biodiversity & sensitivity of the native people vi. Promise and Withdrawal vii. Disappointment

11. A. Shell c. Nigeria i. Negative reception in Nigeria ii. Military government protection from Nigeria iii. Environmental issues iv. Amnesty International’s criticism

12. A. Shell d. Other Concerns i. Largest freshwater oil spill in 1999 ii. Environmental record • Disposal of the Brent Spar platform • Reserved due to public pressure and commitment to sustainable development

13. A. Shell e. Current i. Desire to be viewed as socially responsible ii. TV advertisements iii. Website initiatives • Energy efficiency, fuel economy, technology, energy security, working with others, tackling • “putting its money where its mouth is”

14. A. Shell f. Searching for a Consensus i. Bittersweet history in Peru and Nigeria ii. Window dressing vs. evidence of improvement iii. Work in progress

15. B. Chevron • Background • 1879 in California • American multinational • Approximately 67,000 employees worldwide

16. B. Chevron b. Corporate Responsibility Management i. Public policy committee of the Board of Directors ii. Global Issues Committee iii. Vice President- policy, government and public affairs iv. Vice President- health, environment and safety v. Other managerial positions for specific areas

17. B. Chevron c. What they do i. Reaching out to save lives ii. Learning about future energy iii. Introducing youth to science iv. Using energy efficiency v. Backs up “feel good” statements

18. C. BP • Background • England • Third largest energy company worldwide • Fourth largest company

19. C. BP b. Re-branding (“beyond petroleum”) i. Energy Challenge • Deepwater exploration • New technologies • More from mature fields

20. C. BP ii. Climate change and environment challenges • Performance monitoring and developing efficient fuels and lubricants • Promote natural gas • Focus on remediation • Tree planting in IL • Advanced Seismic Imagery Technology

21. C. BP • Extended Horizontal Drilling • New cleaning procedure for crude oil tank • Water recycling plant • New ways of making PTA • Inclusion of cost of carbon in investment appraisals

22. C. BP iii. Alternative energy • Invest in low-carbon businesses • Invest in renewables and carbon capture and storages iv. Safety issues • Operating Management System (OMS)

23. D. ExxonMobil • Background • American multinational • One of the largest publicly traded companies in the world • World’s largest global refiner

24. D. ExxonMobil b. Current- “Taking on the world’s toughest energy challenges” i. Environmental performance • 2008 goals • 2009 achievements

25. D. ExxonMobil ii. Climate change • 2008 goals • 2009 achievements • 2009 goals

26. D. ExxonMobil iii. Human rights and security • 2008 goals • 2009 achievements

27. D. ExxonMobil c. Searching for a Consensus i. Young company ii. Performance overview

28. 3. Praise and Criticism • Companies • Mixed reviews • Difficulty in distinguish true motives • Starting point

29. 3. Praise and Criticism B. The 2010 CSRI Index i. Boston College’s Carroll School of Management and the Reputation Institute ii. Corporation’s strong interest in stakeholder opinion iii. Combined average 1. citizenship, governance and workplace

30. 3. Praise and Criticism C. Top 50 most socially responsible companies i. No oil and gas companies ii. The energy industry ranked the last in the perception of U.S. industries

31. 4. Pros/Cons-The Debate Q: Is it in the nature of business to engage in CSR? C: No. CSRs increase costs-> less efficient P: Yes. Social aspects of corporations C: Posner-> goal towards profits P: Power of corporations

32. 4. The Debate Q: Whose job is it to address environmental issues? P: corporations are in a unique position to impact our environment C: The government can enact changes to remedy environmental issues P: inefficient and ineffective governments C: spread the financial burden

33. 4. The Debate Q: Are CSR initiatives necessarily costly? C: Yes. New expenditure. Corporations should only look to stakeholder interest. P: No. Customer loyalty, human resources objectives, risk management, brand differentiation, and the ability to attract investors

34. 4. The Debate Q: Closing words C: Give money back to shareholders. They can decide how to invest P: “Win-Win” projects

35. 5. Conclusion and Recommendations • Conclusion • Companies are trying • Hard to measure • Need of improvement • Recommendation • Keep it up!

36. The End Thank you!