The importance of energy in our daily lives cannot be stressed enough. From petrol to natural gas, most of our everyday activities are dependent on the exploration, production, transportation, refinement, and consumption of naturally available petroleum reserves. As the oil & gas industry caters to more than half of the world’s energy requirement, it is of utmost importance that companies operating in the sector take up the responsibility of taking utmost care to protect the planet, in the course of their operations. It is therefore essential for firms to not disturb natural habitats, prevent oil spills and their possible implications, prevent major accidents, control emissions across the entire supply chain, manage wastes without harming the environment, undertake local development initiatives, and adopt the latest technologies to take care of these activities. Corporate Social Responsibility (CSR) requirements mandate organizations to be responsible and judicial in the use of natural resources and make positive, sustainable contributions for the betterment of the environment.
The Oil & Gas Climate Initiative: The benchmark example
One of the most notable collaborations in this regard, which demonstrates the willingness of oil & gas firms to shoulder responsibilities and support sustainable initiatives, is the formation of the Oil & Gas Climate Initiative (OGCI). Ten global industry leaders, Total, Pemex, British Petroleum, Statoil, Shell, Reliance, PetroChina, Saudi Aramco, Eni, and Repsol have collaborated to catalyze the sustainable changes required to abide by the Paris Agreement on climate change. The aim of OGCI is to reduce the footprint of the greenhouse gases emitted by individual companies, by exploring new technologies and businesses.
In November 2016, OGCI launched Climate Investments, a billion-dollar fund that supports innovative technologies that have the potential to reduce greenhouse gases. These technologies need to be economically viable and are to be proposed by entrepreneurs who are willing to offer promising futuristic and sustainable technologies in ready-to-commercialize business models. In 2017, Climate Investments invested in multiple ventures that make a significant impact on the reduction of greenhouse gases, including Clean Gas Project, Solidia Technologies, and Achates Power. The key areas of focus for these investments are –
- Novel solutions that separate, capture, utilize, and store carbon dioxide
- Solutions that reduce methane emission across the value chain
- Technologies that cut down transport-related emissions
- Hardware, software, and business models that boost energy efficiency
Key Areas of CSR Activities
Even though there are various key aspects defined in the Gas Sector Disclosure, Global Reporting Initiatives, and IPIECA (International Petroleum Industry Environmental Conservation Association) Guidelines, five core areas are generally focused upon by oil & gas firms, for their CSR strategy. These include –
- Conservation of water and marine biodiversity – Companies employ the latest tools of corporate water assessment, to understand and analyze water-spend patterns and how they are affecting watersheds and ecosystems around the area of work.
- Prevention of oil and chemical spills – Firms are taking up voluntary safety measures to prevent accidents and leaks, by conducting a periodic risk assessment and incorporating the latest policies and emergency response systems.
- Incorporation of renewable energy sources – With a giant leap toward becoming energy companies instead of oil & gas companies, firms are embracing the benefits of sustainable renewable energies, by modifying their product mixes to include both petroleum-based and renewable energy-based products in their offerings.
- Augmentation of efficiency (Reduce, Recycle, Reuse) – Companies have signed up for various worldwide initiatives that can measure, manage, and reduce emissions, including Global Methane Initiative, Carbon Disclosure Project, United Nations Global Compact, UK Government’s Extractive Industries Transparency Initiative, etc.
Forging Partnerships for the Greater Good
Industry giants are often pressed to address other vital areas of concern, such as poverty, education, and global warming. Firms expanding their businesses into other countries, including Indian Oil, are increasingly taking up projects, such as building hospitals, adopting schools, and launching employment programs, in association with the United Nations Development Program.
Companies are also forging partnerships with NGOs, to seek their expertise in addressing problems. Be it human rights consultations with landowners or prevention of harm to sites of architectural sites, oil & gas companies have sought the assistance of NGOs to solve their issues efficiently. Micro-finance projects funded by oil & gas companies and handled by NGOs have been useful during exit strategies. Several community NGOs have also helped publicize safety-related information on behalf of firms. Many a time, NGOs have played a pivotal role during spill response and cleanup.
Right from companies operating in developing economies (Indian Oil, Petrobras, MOL, etc.) to those from the developed parts of the world (Exxon, Shell, British Petroleum, etc.), most multinational firms have actively taken up CSR initiatives, for the betterment of lives and the world we live in.