This report provides an in-depth analysis of corporate social responsibilities and how they are accounted for by organizations. The report uses the CSR activities of British Petroleum to highlight how such initiatives have impacted the lives of different stakeholders. The report recommends a more guarded management approach to managing CSR funds to keep off unscrupulous officials who use them for their personal gains.
Driving Safely in Oman2
Water and Energy Management in Abu Dhabi..2
Encouraging Students to take Science3
Deep Water Horizon Oil Spill4
Impact of CSR to Company and the Society4
Benefits to the Corporations5
Benefits to the Society..5
Businesses do not exist in social vacuums. They exist within the society and as such, they have some responsibilities towards the society. For better co-existence between the corporate world and the society, it is important that the corporate world appreciates the important role that the society plays in its operations. The recognition comes in the form of Corporate Social Responsibility – CSR. Corporate social responsibility, therefore, refers to practices and initiatives by business entities that are meant to benefit the society (Blowfield, & Murray, 2011). Many companies around the world have huge budgets each financial year for CSR activities within their areas of operation. CR initiatives may include the building of schools, sponsoring of orphaned children to get an education, and cleaning the environment, amongst many other activities. British Petroleum (BP) is one of the largest energy companies around the world. It is a global energy company that has its operations in Europe, Americas, Africa, Asia, Middle East, and Australia. The company’s existence has both positive and negative. This report evaluates the CSR activities of BP around the world and their impact to the society. The report also evaluates the impact of CSR initiatives to the company’s business plans as well as the impact that they have to human capital development (Blewitt, 2008). BP’s case of the deep water horizon is well, documented and, therefore, this report will only highlight the impact of the accident to the company’s CSR initiatives in the region.
BP carries out several corporate social responsibility initiatives. The following discussion focuses on evaluating some of these initiatives and how they affect both the company and the society they are directed at.
Driving Safely in Oman
The company launched a road safety campaign in Oman in 2007. In the campaign, the company educates driving on the best practices on the road to ensure that accidents are minimized and if possible eliminated. The program started with company’s employees before eventually extending to the members of the public. BP being an Energy Company that transports liquid gas and petroleum products, it is important that road safety is observed. The effects of a BP tanker getting involved in an accident can be devastating. The reason is that an accident involving such tankers can easily cause a fire because of the flammable nature of the products transported (BP, 2015). The general public also benefits from the campaign since the awareness created reduces the number of road accident fatalities that poach human capital from the economy each time a fatal accident occurs. Safe driving also saves money for both the company and the general public in terms of fuel consumption.
Water and Energy Management In Abu Dhabi
The British Petroleum company has operated in the Emirates since the 1930s. Currently, the company is fully funding a foreseer technology project that will help Abu Dhabi model to support sustainable water and energy management. Abu Dhabi's Vision 2030 projects that the country's population will have increased by up to 5 million people. This project will help the government to foresee the future water and energy requirements and plan for the same (BP, 2015). The outcome of this will help the government to foresee the energy and water requirements in various sectors such as agriculture, mining, and manufacturing, among other sectors. This will help in the planning of the economy by government ensuring that it will be able to sustain its future population. The technology will certainly improve the lives of the people in Abu Dhabi. In general, therefore, the entire population will have benefited from BP’s operations within their society. Furthermore, the project improves the quality of the human capital in the economy of Abu Dhabi and thus raising the prospect of boosting economic growth (BP, 2015).
Encouraging Students to take Science
According to BP, the number of students taking science course is reducing at an alarming rate in the UK. Estimates indicate that each year the number of students graduating with science related degrees fall by up to 40,000. BP fears that the decreasing number of science graduates poses a danger both to the UK economy and to the company itself. The reason is that the UK economy will soon fall short of skilled engineers, geologists, doctors and other technical specialists (BP, 2015). This is an act of corporate social responsibility from the company given that if it was concerned about its own labor force, it has the option of importing skilled labor into the UK at a lower cost. The initiative, therefore, stands to benefit the entire UK society as BP gives back to the society that is supporting its business. The essence of the BP initiative to the general society is that it endears the society to the company. Consumers will want to support the company because they like what the company is doing to them. Social responsibility is all about giving back to the society that supports you (Blewitt, 2008). In return, the endeared consumers will increase the company’s sales and thus, its bottom line.
Deep Water Horizon Oil Spill
Five years ago, BP had a terrible experience that had a negative effect on the company's social standing. The oil spill resulted in the loss of lives and livelihoods for many people. The incident threatened to dent forever the image of the company in the eyes of the society. It seemed as though the company only cares about profits and not the welfare of the people. However, the company has since responded by improving its response strategy in case such a situation arises again (BP, 2015). In addition to that, the company has put in measures to compensate the families that were affected by the accident. The company is also supporting the fishermen who lost their livelihood jobs as a result of the spill. These actions are a good indication of the company’s sensitivity to humanity (Bebbington, & Unerman, 2014). As much as the initiative by the company to help families regain their earnings back may not fall under the social responsibility, it gives the company a similar image in the same manner as CSR initiatives.
Impact of CSR to Company and the Society
A lot has been said about CSR, and the concept has become an integral part of corporations in the contemporary business environment. Most corporations have budgets specifically made for corporate social responsibility (Gottschalk, 2011). This in itself underlines the emphasis that has been put on the concept and the role that it plays in corporate financial planning. For the concept to be so popular, there have to be benefits that are accrued by the stakeholders. This section discusses some of these benefits to both the society and the corporations.
Benefits to the Corporations
The most important benefit of CSR to the organizations is developing and enhancing relationships with potential customers. It also gives them goodwill from the society that is important for them to operate in an environment. CSR also helps an organization to attract and retain customers (Blewitt, 2008). Customers will always want to relate with organizations that show concern for their wellbeing. It is common, for example, to find consumers avoiding products from a multinational company that does not employ locals. CSR, therefore, makes the society feel that they are part of the organization and will support it with knowing that they can expect something back from the organization.
CRS generates positive publicity to the organization especially when the media report about their ethical activities to the society. The publicity gives the organization concerned a good reputation as well as promoting the company to the general public at no cost. Additionally, it helps the company attract and retain talented workforce making it an employer of choice. Social responsibility is also a basis for innovation amongst companies especially as they try to enhance sustainability (Gottschalk, 2011). For instance, when a firm uses a lot of water in its manufacturing process, it might invest in research and development to generate other alternatives that will enable the firm to use less water.
Benefits to the Society
CSR benefits the society by improving the quality of life through the projects that organizations carry out in the society. For instance, a society with a firm that supports education in its CSR activities will benefit from high education standards and hence, an improved life. In addition, most CSR activities are aimed at capacity building that helps in creating wealth and employment to the society (Gottschalk, 2011). The living standards in the society will in the end rise and the society will live in harmony as a result.
In conclusion, as much as many private organizations have CSR programs, much can still be done to improve the impacts that these programs in the society. Comparison between the funds that some multinationals allocate to CSR and the projects done, sometimes raise more questions than answers (Gottschalk, 2011). It is therefore, important to eliminate corruption practices in management of CSR cash.
BP. (2015). Retrieved April 21, 2015, from http://www.bp.com/en/global/corporate/sustainability/bp-and-sustainability/case-studies-library/encouraging-uk-students-to-choose-science.html
Bebbington, J., & Unerman, J. (2014). Sustainability Accounting and Accountability (2nd ed.). Hoboken: Taylor and Francis.
Blewitt, J. (2008). Understanding sustainable development. London: Earthscan.
Blowfield, M., & Murray, A. (2011). Corporate responsibility (2nd ed.). Oxford: Oxford University Press.
Gottschalk, P. (2011). Corporate social responsibility, governance and corporate reputation. Hackensack, NJ: World Scientific.