The role of Corporate Social Responsibility in British Petroleum’...

The last 50 old ages the universe has seen a radical force in the name of globalisation. However non everyone in the society has benefited from this advancement. A huge bulk of the planetary population is still under the poorness line. The corporate universe has grown so immense that it has the capablenesss to take on the duty for bettering the society in which they operate. These concerns have the power to turn the social issues into economic chances for societal every bit good as concern strategic grounds. The crude oil refinement sector has a immense duty in this respects. It is moving as a powerful accelerator in turn toing the demands of the society through environmental conformity and economic chances. This duty is given the name of corporate societal duty ( CSR ) of houses towards the society. Corporate societal duty or citizenship is a construct that has been given a batch of importance in the last few old ages as it is a powerful tool in eliminating planetary poorness, for a safe environment and maximising value to multiple stakeholders “ the activities of the hapless and increase their productiveness by increasing their entree to market information or take downing the dealing costs of hapless husbandmans and bargainers ” ( Viitanen A K, 2003 ) .

This thesis is a survey and analysis of BP ‘s citizenship enterprises. The study starts with the background of how CSR has evolved in the last few old ages and highlights the relevant definitions that have come up boulder clay now. The study goes profoundly into the field by exemplifying the work of outstanding research workers in the field as this provides a footing for this study. The treatment narrows down to petroleum refinement industries are implementing CSR enterprises in UK part by taking the instance of few companies in the sector. The chief purpose of this study is explained in the purposes and aims subdivision 2.2 through which it is helpful to depict the CSR scheme of BP that lead to societal, environment and economic development. It besides analyze the BP ‘s current state of affairs and see how the house can better on their patterns by sing CSR as a strategic tool to make economic, societal and environmental benefits non merely for the house but the society at big.

2.1 Introduction

Harmonizing to Thomas Berry, ( 20xx ) “ The existence is a Communion of topics, non a aggregation of objects ”

CSR is about reconstituting schemes so that companies have a basic duty for their society and the environment. George Frynas noted that CSR can remarkable fiscal aid in clip of demand through environmental betterments ( 2010 ) .

By and large CSR investings have many complications and troubles such as environmental safety, human resource relation, wellness and safety, pollution control step and the list goes on up to benefits of consumer. It so understands the necessary grounds and cardinal motives of CSR. The chief causes for a company to affect in CSR investings can be reflected in their results.

Many industries are lifting in fabricating sector but really few are come ining to refinement of crude oil industry. When analysing the ground that will stop up at environmental issues.

Sustainability and societal duty are two different issues but there exist many similarities between them. Harmonizing to Manuel Castelo Branco and Lucia Lima Rodrigues ( 2006 ) at concern degree the possible minimisation of environmental effects are recognized by three elements. They are economic sustainability, environmental duty and societal duty. As for as crude oil industries concern environmental consequence minimisation is really much so deserving research analysis for this survey. For a crude oil industry like BP, investing programs in commanding air pollution, carcinogenic gases, wastewaters and most polluting residues are really of import factors.

Finally to make cognizant of socially responsible and environmentally friendly industries, basic schemes of organisation is to be changed consequently. Future continuity is more considerable and followed factor for corporate duty. So, futuristic CSR programs are besides important in the list of research inquiries which project current issues.

In conformity with such thoughts it is chosen to analyze and propose with the aid of old research and literatures.

Jessica Foote et Al ( 2010 ) noticed that corporate societal duty is the most debated and criticised subject in many corporations for many old ages and CSR distracts to do money from the cardinal economic function of concern. Particularly in crude oil industry, where environment and pollution a outstanding restraint, CSR is a cardinal factor.

2.2 Purposes and Aims

The chief purpose of this research is to happen how CSR does efficaciously make an impact in BP ‘s productiveness and a complete analysis of happening the curtailing factors of BP to affect in CSR.

To analyze critically the addition of productiveness for British Petroleum through corporate societal duty

To reexamine the most current state of affairs from the concern moralss of BP ‘s concern scheme and interpret the motives behind

To analyze the grounds for investings in CSR

How efficaciously they handle it

To happen the primary drivers

2.3 Structure of the thesis


This thesis starts with an executive sum-up so that readers can quickly go acquainted with organic structure of the stuff. Chapter 1: Introduction gives basic definitions about CSR and its function in crude oil industry. Analysis of the relevant and recent most researches and critical reappraisal of the old surveies has been juxtaposed in chapter 2.

The method of aggregation and the consequences and findings utilizing those secondary informations have been discussed in chapter 3 and chapter 4 severally. Chapter 5 provides a complete justification to the research aims and eventually chapter 6 explains decision, discretion and proposing deductions for farther research and managerial deductions.

3. Literature Reappraisal

3.1 CSR outline

CSR is non an entirely new construct in the largest parts of the universe. Albeit often termed otherwise, there have been related attacks towards concern duty in society in many different states ( George Frynas, 2005 )

The term societal duty ( SR ) was good known for social betterment enterprises before the term CSR come into normal pattern. SR subsequently termed as corporate societal duty and now it is besides known as corporate duty. Now all the footings that related to SR is considered as same and it is being used interchangeably as the companies articulate their company ‘s vision and their function in society ( BCCCC, 2008a ) . SR is defined as “ the outlook that concern or persons will endeavor to better the overall public assistance of the society ” . It is said to be the organisation action, involvement towards citizen and society and demand of interest holders for the overall public assistance. Since 1990 SR has taken different signifiers and focused more on quality of the environment ( Dess, 2004 ) .

Corporate Social Performance ( CSP ) is besides a signifier of CSR and defined as “ a concern organisation ‘s constellation of rules of SR, processes of societal reactivity, and policies, plans, and discernible results as they relate to the house ‘s social relationships ” . Wood ( 1991 )

Many surveies on Corporate Social Responsibility ( CSR ) argue that societal duty came into being during sixteenth century. ‘We can follow active Social ResponsibilityA as far back as Ancient Mesopotamia in around 1700 BC where King Hammurabi introduced a codification in which builders, hosts or husbandmans could be put to decease if their carelessness caused the deceases of others, or any major incommodiousness to local citizens ‘ ( EMMA, n.d ) . The term came into common usage merely in the early 1970 ‘s ( Alice and Marlin, 2003 ) . “ CSR is a quickly turning field in the academic and practician spheres. Yet unfavorable judgments of CSR in its current signifier have been evident, frequently related to the deficiency of value that it generates in the endeavor. This above mentioned fact is particularly true for SMEs who frequently shy off from CSR patterns due to the perceived costs ” ( MacGregor, 2007 ) .

In the last few decennaries, corporate duty issues including the societal duties of corporations have attained prominence in political and concern argument. This argument has motivated three interlinked motions, such as worldwide reforms on corporate administration, CSR ( Corporate Social Responsibility ) and corporate sustainability ( Katsoulakos, T and Katsoulacos, Y, 2007 ) . Corporate administration muses the manner companies address legal duties and hence provides the foundations upon which CSR and corporate sustainability patterns can be built to heighten responsible concern procedure or operations. CSR and corporate sustainability represent the manner companies achieve enhanced ethical criterions and a balanced economic, environmental and societal imperative turn toing the concerns and outlooks of their stakeholders.

3.2 What and whom is a concern for?

Most of the large corporations view CSR as an thought they should clinch. Though investors are widely accept it which eventually means company should have into their computations phases other than net income maximization says an article published in the Oxford Analytica Daily Brief Service ( May 2010 ) . It continues that the Centre of attending of a CSR study is the relationship between concern and society. The consolidation of a CSR literally means busying the attending in some sort of societal or environmental-related actions. Not merely big corporations, even little medium endeavors besides maintain to hold CSR related taking action while they face a low regulative restrictions but they besides countenance market force per unit area to clinch CSR. The article concludes that the CSR likely to stay in the hereafter of corporate docket but it would be hazardous move for concern ( Oxford Analytica Daily Brief Service May 2010 ) .

George Frynas efficaciously howling at the oil industries for their self-generated run about CSR but they are failed to better their advancement. Companies characterize CSR in different ways and states define in different ways but basically it is beyond of legal conformities. There are many awards and honours to BP but at the same clip there are several ailments and worst unfavorable judgment every bit good started to lavish. Those ailments and unfavorable judgment made BP to rethink about their existent engagement in the society. BP realized and started responding to it. The advancement and the impact of the realisation is the reply to all the unfavorable judgment about BP ( George Frynas 2010 ) . For the energy companies like BP, CSR is non merely projecting possible unfavorable judgment but besides to harvest concern. In position of the fact that from the beginning of mid 1990s oil companies have joined a scope of planetary proposals aspired at bettering sustainable developments which include Global coverage Initiative ( 1997 ) , UN Global compact ( 1999 ) , Voluntary rules on Security and Human Rights ( 2000 ) , Extractive Industries Transparency Initiative ( 2003 ) and Combat climate Change enterprise ( 3C enterprise – 2007 )

CSR has been took on unpredictably across the oil and gas sector, companies in these industries have most likely made more than the other sectors, because they have had to cover with the extremely noticeable negative effects of their operations ( Petroleum Economist March 2010 ) .

Most frequently CSR viewed by the corporations as a complementary instead than cardinal to the centre scheme of organisation ( Jonathan Ledwidge, 2007 ) . This consequences in a multiple individualities to the organisations. A survey conducted by Jonathan Ledwidge says that CSR has brought menaces and opportunities for HR directors and professionals. BP had a great CSR plan in Texas but it sounds as if did non pay equal concentration to the care of its refinery. Texas refinery detonation was a public-relations catastrophe for the company as decease, hurt and devastation of works and equipment. The range of CSR has been surely uneven ( George Frynas, 2010 ) . CSR has become a gimmick phrase to oil houses and BP failed to interpret their rules on the BTC grapevines ( Vavro, Caroline 2007 ) . The findings of the Caroline Vavro thesis says as follows

“ … becauseA CSRA is non a precedence for houses, and as such it has been relegated to a basically window-dressing exercising divorced from the nucleus grapevine operations, the antecedently accepted thought that houses can be trusted to modulate themselves throughA CSRA needs to be called into inquiry ” . ( Vavro, Caroline 2007 )

This clearly explains operations that oil companies involve and the run about the societal duties are wholly different or non reciprocally sole.

3.3 CSR and Stakeholder

Stakeholders are those who impacted by an organisation ‘s activities, was used to depict corporate proprietors beyond stockholders from around 1989 ‘ ( Alice and J.T Marlin 2003 ) . While specifying CSR as including “ the openness or transparence of companies every bit good as taking into consideration the will and outlooks of their stakeholders ” Juholin ( 2004 ) suggests that the relationship between companies and their stakeholders is critical for concern success. Stakeholders play the cardinal function in any concern program of the organisation. The ultimate success depends on them as affect or affected by the organisation ( Freeman, 1984 ; Clarkson 1995 ) . Other than investors major stakeholders could be employees ( directors, employees, households, retired persons ) , clients ( direct and indirect ) , concern spouses ( providers, joint ventures, confederations, investors or portion holders ) , communities ( regional, national, local ) , environment ( eco-efficiency, sustainable development ) , trade associations and government/other groups ( regulative organic structures, complementary CSR establishments, NGO ‘s, NPO ‘s, environmental militants, political groups, CSR policy advocators ( Donaldson and Preston, 1995 ) .

Adding to the list, there are assorted groups, associations, bureaus and persons as stakeholders ( for each house ) , who should be engaged in all degrees of the house ‘s scheme for the benefit of house and the society ( Donaldson and Preston, 1995 ) . Stakeholder theory is recognised for presenting corporate duty, particularly in emergent web relationships ( Freeman, 1984 ) so that sustainability enterprises and actions that may be adopted represent their duties to all stakeholders for common benefit or even strictly on ethical and moral evidences. Harmonizing to Dato ‘ Sri Najib Tun Abdul Razak ( 2004 ) the engagement of multiple stakeholders is really much necessity to conveying about an environment where CSR can boom.

3.4 Strengths and Limitations of CSR

An empirical probe of a 416 explanatory instance surveies published by corporate components of UN Global Compact done by Ralf Barkemeyer, consequences show there is a function to play the province in order to make a better tantrum between the CSR docket and the existent developmental demands ( Barkemeyer, Ralf 2009 ) . CSR mobilize concern for advantage. The present economic calamity should do the socially responsible concern even more important than of all time before. The United Nation ‘s Global Compact intends to covering with assorted socio -economic jobs such as human rights, labour development, the environment and corruptness. In add-on to the Global Compact, Global coverage Initiative has lead the manner to sustainability coverage guidelines and restrictions which act as construction for economic, societal and environmental coverage ( Leipziger, 2003 ) . Gary Lynch-Wood, David Williamson and Wyn Jenkinsn ( 2009 ) say that companies will profit from being socially and environmentally responsible.

CSR has the power to better the fiscal and non – fiscal public presentation of a company and improves the societal respects every bit good ( Gopal K. Kanjia and Parvesh K. Chopra, 2010 ) . Barkemeyer considered the immense assortment of issues is non sufficiently addressed in the CSR docket ( Jenkins 2005 cited in Barkemeyer, Ralf 2009 ) . Friedman says it is a displacement that takes corporations to goods and services to the society ( Fried adult male 1962 cited in Gary Lynch-Wood, DavidWilliamson and Wyn Jenkinsn, 2009 )

3.5 The UN Global Compact: Impact

The UN Global Compact is an enterprise created by UN Secretary General, Kofi Annan. The Global Compact is the first enterprise on corporate duty aspired at companies to come frontward ( Leipziger, 2003 ) . Through good corporate citizenship Global Compact promotes development and therefore this inaugural differs from all other corporate duty ( CR ) enterprises. While looking at the strengths of this Global Compact initiative the range around the universe through webs is huge. Active webs from the developing states and bulk of the take parting companies particularly from the South is the wining factor. The planetary compact better suits to the corporations for doing their first measure towards Corporate Responsibility. For the well established companies can farther continue to heighten their advancement by fall ining Global Compact. It has the installation to cite the CEOs from around the universe to promote corporate duty and development of societal and environmental actions ( Leipziger, 2003 ) . George Kell of the UN secretary -General ‘s Office says that “ the Global Compact us non about evildoers and saints. There will ever be companies that lead and companies that follow. We want to maintain the door unfastened. But we needs some precautions ” ( quoted in United Nations 2003:8 )

This is besides considered as a challenge to Global Compact. Harmonizing to Lepziger ( 2003 ) , when corporate duty is more dispersed in companies the connexion between the corporate administration and corporate duty is besides acquiring deeper. What efficaciously explains the so called corporate administration? The following two inquiries will reply to this inquiry. What are the duties do companies and their board of managers to be examined by agencies of societal and environmental issues? How can the company develop coverage that makes it more accountable?

Leipziger ( 2003 ) added that both corporate duty and corporate administration apportion a common footings which are really frequently indicates to answerability, transparence and revelation. The greatest challenge harmonizing to Leipziger ( 2003 ) is to heighten or to develop the connexions between corporate duty and corporate administration. While speaking about corporate administration the International Business Leaders ‘ Forum ( IBLF ) creates six points answerability, Responsibility, ‘Globality ‘ , Standard-setting, Monitoring and revelation and Enforcement ( IBLF undated cited in Leipziger, 2003 ) .

3.6 CSR in British Petroleum

Academicians, authorities functionaries and concern leaders focus outstanding attending on the construct of CSR, specifically in the particular state of environmental protection. British Petroleum ( BP ) has won acclamations and awards for CSR. But Swaminathan S Anklesaria Aiyar ( Times of India, Bangalore edition 2010 ) argued in his article that BP has created the greatest environmental catastrophe in history which includes its out-of-control Macondo deep-sea well. Gulf of Mexico oil leak is another large historical issue. BP has created a immense image constructing run of ‘beyond crude oil ‘ critics say that BP has now spindling with ‘beyond jobs ‘ ( NJ Watson, A A Petroleum Economist, 2009 ) . BP states that it recognizes the important environmental and societal challenges faced by the universe in the twenty-first century. It believes strongly it can accomplish in the mode of sustainable development. BP ‘s policy statement commits the company to the safety and development of their people and the communities and societies in which they operate. Its sustainable reappraisal says BP is responsible for their operations and is accountable for puting high criterions within them. It besides elaborates BP support relevant external criterions. Particularly BP supports the UN Global Compact, which sets out series of rules for corporate duty ( BP-Sustainability Review, 2009 ) . The UN Global Compact is an enterprise of UN Secretary-General, Kofi Annan to give a human face to globalisation ( Annan 1999 cited in Leipziger 2003 ) .

In 2005, Christina L. AndersonA & A ; A Rebecca L. Bieniaszewska examines the function of CSR in BP ‘s concern scheme and its enlargement in different districts. They found that the relationship between socially responsible investings and its dependability and publically recognized name bonded to their longing influence on their societies in which BP operate. This article found that when BP maintain BP as a scheme and perform, may ensue in higher fiscal flexibleness by agencies of increased societal investings. The creative activity of value through positive stakeholder dealingss and repute which created grounds for CSR as an overall international concern scheme concluded Christina L. AndersonA & A ; A Rebecca L. Bieniaszewska.2005 ) . Swaminathan S Anklesaria Aiyar ( 2010 ) says in his article published in Times of India, Bangalore edition, CSR is non merely a beneficent issue instead in BP manner it is beyond philanthropic gift every bit good. He besides added that every bit for as the nucleus concern of corporations whom they covering with the stockholders to be maintained a high criterions besides make green and beneficent attempts. The chief thing in here is non any confusion to be created these with the societal duties. Betsy Atkins ( 2006, A November ) enlisted some points of societal duty to the populace which includes that, companies should non foul their environments and other environments and to be adhering to the Torahs and ordinances. Atkins explicitly referred that corporate societal duty is really something what companies does non make. Social duty is now a pure competitory strategic advantage ( Werbach Adam, 2009 ) .

3.7 CSR and Strategy: Profitableness

Many executives have a really valid cause to feel engulfed by the assorted attacks to the corporate duty such as Caux Principles for Business ( 1994 ) , the SA8000 ( 1998 ) , the UN Global Compact ( 1999 ) , and the Global Reporting Initiative ( 2002 revised ) ( Chris Laszlo 2005 ) . Furthermore new sets of step are emerging harmonizing to Chris Laszlo for a company to be more responsible. He argues that new steps are named as sustainability benchmarks which are improved in the capital markets in association with NGOs and planetary criterion organisation.

Sustainability benchmark can be taken as a managerial tool to happen and pull off the corporate duty better ( Chris Laszlo 2005 ) . CSR can be framed as scheme at this degree which takes consequence in the development of company ‘s value creative activity, the demand of organisational civilization and mentality and the connexion between the benchmark public presentation and fiscal results. Gary Lynch Wood David Williamson and Wyn Jenkinsn ( 2009 ) addressed a strategic direction literature which stipulates that booming companies continuously strive to prolong good health between their resources and macroeconomic, sociological, technological and ecological environment to fulfill the demands of their stakeholders. Barnett, 2007 and Orlitzky et al. , 2003 argues that corporate duty is considered by corporations as strategic for concern due to its portion to their fiscal public presentation ( cited in Ziva Sharp Nurit Zaidman, 2010 ) .

The article written by Ziva Sharp Nurit Zaidman in 2010 was aimed to happen when one time an organisation declare their CSR as a strategic tool whether they unfeignedly follow or non. They found the indicant of incursion of the CSR values and of successful strategisation.


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