Existing Gaps in The British Petroleum Company plc (BP) sustainability report

Existing Gaps in The British Petroleum Company plc (BP) sustainability report

Introduction

The increasing industrialization across the globe has resulted in different problems. These problems include environmental issues, consumer issues, issues relating to fair operating practice, human rights issues, corporate governance issues, and labour practices issues. For these reasons, there have been calls for organizations to develop favorable business models with systems and procedures that uphold the required sustainability standards within the society. These sustainability standards include eco-friendly business procedures and equipment, upholding health and safety standards, considering gender balance, better communication with stakeholders (Tarquinio, Raucci and Benedetti, 2018 pg 897). Generally, sustainability in an organization is aimed at creating value for the stakeholders within a business organization.  These are the general standards set by the international organization for standardization, in which all member organizations are expected to uphold.

For this reason, registered members of the international organization for standardization have to comply with the set standards. Meeting these standards is viewed as a good corporate strategy for the majority of these organizations. Annually organizations always produce their sustainability report long with their financial reports for all stakeholders to view their current status and the long term sustainability they wish to achieve. As an additional requirement, these reports should contain the progress these individual organizations have made concerning the realization of the long term organisation’s sustainability objectives de (Villiers,  2018 pg 55).

However, in as much as there has been a call for upholding efficient and effective sustainability goals, organizations do produce sustainability reports which do not march with the required standards and sometimes contradict the practices an organization has in place (Batista and Francisco,  2018 pg 226).

Such cases are common among some British companies like The British Petroleum Company plc (BP). The British Petroleum Company plc is an international company operating in the energy sector. The company majorly participates in finding oil and gas, developing and extracting these natural resources as well as transporting and trading them. The company operates on a worldwide geographical scale, meaning it renders its services worldwide. The company does not only concentrate on energy products, but it also produces petrochemicals products useful in making everyday products such as paints, packaging, and clothing. The recently produced sustainability report indicates that stakeholders” interest is at the heart of the company’s sustainability goals (Schreck and Raithel,  2018 pg 747).

Among the sustainability goals, the organization wishes to achieve are meeting human rights concerns, promoting environmental friendly systems and process, upholding ethical standards as well as safety standards, and ensuring effective and efficient energy transition. While reporting on these sustainability goals and objectives, organizations should follow the standards set by global reporting initiative (GRI) in matters relating to the quality of the report and content if the report. In as much as the company tries to achieve these sustainability goals, there are shortcomings that raise the question of the effectiveness of its strategies in meeting them (González, del Mar Alonso-Almeida, and Dominguez, 2018 pg 1048). These can be viewed as analyzed below.

Safety report

The organisation’s goal relating to safety is no accidents, no damage to the environment, and no harm to people.  The organization achieves this by formulating careful operations with a mechanism for identifying potential hazards and managing risks involved at every stage. However, an incident involving the organisation’s employee in which the employee was hit by a passing vehicle while changing a tyre illustrate the lack of accuracy in this report. If the organization was fully committed to the overall well being of its stakeholders, it would have had some mechanism in place that can help in avoiding small incidences such as this one, which result in huge losses (Dixon-Fowler, O’Leary-Kelly, Johnson and Wait, 2019 pg 100690).

The company also has reported on ensuring the total safety of its employees, but on the other hand, the company conducts its operation in some regions affected by social and political unrest, which experience conflicts on numerous occasions like the Middle East, thereby risking the individual lives of their own employees. Relating to the security of the organisation’s database and systems, the organization experienced cybersecurity threats but reported no significant impact on its business. This report is not accurate as any impact resulting from cyber threats must disrupt the processes and procedures within the organization as the organisation has to dedicate time and resources in addressing such matters (He, 2018 pg 5). This, in return, consumes time and available scarce resources, and as per the guidelines provided by the global reporting initiative (GRI), it fails to meet the quality standards with respect to accuracy.

Human right report

The organization utilizes the human rights framework set out by the international bill of human rights as well as the declaration on fundamental principles of rights at work proposed by the international labor organization. The organization focuses on ethical recruitment procedures, community health, as well as building a conducive environment that can enable workers and the community to voice their concerns. These contradict the organisation’s nature of operation in Indonesia in which the organization has built a liquefied natural gas operation in next to a community fishing ground, which will affect the community level of income in the future (Orazalin and Mahmood,  2018 pg 75). This brings a reliability issue in this report as what is reported contradicts the organisation’s actual practice

Labour right report

The organization has integrated human rights requirements in its recruitment processes, with an existing code of conduct that requires employees to report any form of human rights abuse at the workplace. The organization has reported on its efforts in ensuring equal training, reward, and promotion of all employees regardless of gender, race, and ethnicity. Considering that the organisation largely sub-contract their operations, it is not easy in realizing these goals. By subcontracting, the organization has reduced the powers it has on controlling employee requirements, as they have stipulated in their sustainability report. The organization has reported on its keenness in addressing modern-day slavery by mapping supply chains to identify high-risk suppliers. The level of political involvement in the international business arena has always forced organizations into bending their strategies and modes of operations to suit the requirements in each country, and the British Petroleum Company plc is not left behind in this (Shad, Lai, Fatt,  Klemeš and Bokhari, 2019 pg 420). These again raises the quality of the report in relation to reliability as provided by the global reporting initiative.

Social dimension

The company reported on its commitment to achieving the overall well being of each society they engage with. In doing so, the organization has collaborated with governments, local communities, and non-governmental organizations in creating social investment programs with sustainable benefits to the community. These investments are aimed to overcome worldwide challenges like inequality, climatic change, hunger, and poverty. The energy sector is the largest contributor to global warming by emitting gasses like methane and carbon iv oxide into the atmosphere, which makes British Petroleum Company plc’s operations a universal obstacle in managing climatic change (Nilawati, Purwanti, and Nuryaman, 2019 pg 230). The company has also stated that it champions for equality among communities but considering its operations in which it depleted the natural resources like oil and gas that individual communities are endowed with, which will leave these communities with little resources compared to other communities in future.

Additionally, the ugly landscape left behind upon closure of a site has very minimal economic value to the surrounding community, which can result in an increase in poverty levels (Lozano,  2019 pg 8). The organization also heavily depends on water for some of its operations, which means the organization scrambles for water during periods of droughts in places with little infrastructure relating to water harvesting and conservation, thereby causing water shortage for the populations in these places. This can easily result in an increase in poverty levels among these populations.

Environmental dimension

The organization is highly involved in the energy sector, a sector that has been criticized for its carbon emission into the atmosphere. Excess emission of carbon IV oxide into the atmosphere has led to the depletion of the ozone layer, which has resulted in a climatic change (Ruka, and Rashidirad, 2019 pg 439). Climatic change has resulted in unpredictable climate patterns, which result in hazardous climatic conditions such as drought and flooding.  The organization reported a zero net growth in operational emission. In tackling the problem of carbon IV oxide emission into the atmosphere, The British Petroleum Company plc replaced gas turbines that drive compressors with ones that are powered by electricity at its production facility in Prudhoe Bay in the United States. This move of adopting electricity-powered gas pipes in an attempt to reduce carbon IV oxide emission solves the intended purpose but create another problem for the society.

The emerging problem from this strategy is the overconsumption of electric energy, which can easily result in depletion of the available scarce energy resources, thereby affecting the future generation in the long run (Pollach, 2018 pg 253). Additionally, the company has reported a zero growth rate in operational emissions while, on the other hand, it reported a capacity increase in terms of the number of facilities. Logically, an increase in the number of the organization’s facilities automatically results in an increase in the level of operational omissions; however small the margin is, it still remains an increase. Additionally, the company acknowledges how dangerous methane gas is if emitted to the atmosphere by causing global warming, which has made the company targets a methane intensity of 0.2%. The company aims at achieving this by having fewer operational sites, which will subsequently result in fewer emissions of methane gas. However, in a bid to maximize its profit levels and efficiently serve its customers and create value to its shareholders the company aims at increasing its capacity in which will result in developing other facilities, thereby resulting in an automatic increase in the level of methane emission, which contradicts the report indicated in its sustainability report.

The company has also reported its desire to help in the implementation of electric vehicles to reduce the consumption of carbon IV oxide by 2040. In the realization of this, the company has built 6500 charging points across the United Kingdom (BPSustainability Report 2018, 2019).  On the other hand, the company wants to implement carbon capture use and storage technology (CCUS), which will allow for capturing of carbon IV oxide for other uses such as injection into oil fields to stimulate production. The question that arises from this strategy is that if the company is fully committed to transforming energy consumption in the automobile industry to reduce consumption of energy loaded with carbon iv oxide why would it still be interested in implementing the carbon capture use and storage technology to enhance the productivity of its oil fields (Bhargava and Bhargava, 2018 pg 111). Considering the standards set by the global reporting initiative (GRI), the sustainability report released by The British Petroleum Company plc does not meet the quality requirement in relation to accuracy and reliability based on the above arguments.

Conclusion

There has been an existing gap between the sustainability milestones, strategies, and framework reported by individual companies relating to their operations and the actual operations. This can be seen in the case of British Petroleum Company plc, as presented above. The company reports on reducing carbon iv oxide and methane emission into the atmosphere y reducing the number of its facilities in operation which contradicts its expansion plans for creating value to its customers by enhancing effectiveness and efficiency in service delivery and add value to its shareholders y increasing the company’s profit levels. The company also insists on the overall well being of its employees but at the same time, conducts its operations in hostile environments which risks the lives of its employees.