CORPORATE SOCIAL RESPONSIBILITY OF THE

DESTRUCTIVE OIL & GAS INDUSTRY: SHELL

Senne Buys – r0798106

Odisee 2020-2021
Table of Contents

Table of Contents.............................................................................................................ii

Introduction.................................................................................................................... 1

Corporate Social Responsibility...................................................................................2

How Shell uses CSR......................................................................................................3

Shell CSR Strategy & Claims...........................................................................................3

Negative consequences/impact of Shell activities......................................................6

Conclusion..................................................................................................................... 8

References...................................................................................................................... 9

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Introduction

Without a doubt, the oil and gas industry is responsible for a lot of wrongings within our
world and society. This major pollution industry holds a large share of potential hazards
for the environment. All living beings living on our planet are simply being affected by
this sole industry. Every single stage within the activities of oil and gas production comes
with a certain amount of pollution. Some examples of these are; gas emissions, solid
waste, wastewaters, refining, drilling, transportation of chemicals,… you name it.

Nonetheless, Oil plays a vital role in our society. It can be seen as the driving engine of
growth. The absence of this energy source would result in the world coming to a grinding
halt. It plays a major role in growing people’s lives, as petroleum products serve as
feedstock for many consumer goods.

Many of the environmental impacts of this industry are already well communicated and
documented towards society. This does not mean it is being accepted. For an industry
as destructive as the oil and gas industry, CSR is especially important to show the world
how they are minimizing their impacts on nature and biodiversity, being transparent with
their good and bad activities, and owning up to them.

This industry is one of the driving powers of our society. Therefore it also holds a
significantly higher corporate responsibility. Within this paper, I will discuss and
showcase how Shell, an oil and gas corporation, impacts our world as we know it and
handles its CSR. Are these companies all bad or are they also doing a lot of good things,
the normal human being simply doesn't see?

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Corporate Social Responsibility

The concept of corporate social responsibility is viewed differently by many

people. One of the definitions of corporate social responsibility is that it emphasizes on
the duties a particular organization established within society and how they should
contribute towards environmental, economic, and social progress in a positive manner.
Measuring an organization solely on pecuniary profits, doesn't show its growth and
success. One simply cannot forget showing the support and contribution they make
towards the well-being of our society and its people.

The CSR strategy of oil and gas companies is often a little different than most regular
companies. They simply cannot tell lies and announce they will cease all pollution, start
showing more consideration and save more animals. The activities Shell executes will
always have pollution, destroy some land and often stay dangerous for their employees.
It is up to Shell to simply minimize these damages, own up to their own mistakes, and
help our environment and people.

During the 17th World Petroleum Congress, the issue of corporate social responsibility in
the oil industry was debated for the first time in the business world. This set an example
for this industry at the dawn of that new century.

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How Shell uses CSR

Releasing a sustainability report isn't mandatory. Then why would a destructive

company just like Shell choose to share one? To keep it simple, it isn't mandatory, but it
kind of is expected by society to have such a report containing all kinds of information
the public would like to find out at any given time. Many examples have shown that
transparency actually works in the favor of the company or a person. When people hide
the bad they’ve done and the public finds out, the consequences will instantly ruin this
person/company. Whereas when a person or company is transparent and for example
says ‘Our activities hurt the environment in Nigeria, but we are supporting the local
families by providing better living conditions, fresh water and also communicate with
them in order to minimize the damage done.’, the public will feel more at ease and
forgiving; ‘Yes they are doing something bad, but they are trying their best to fix their
mistakes and help.’. In the end, Shell will be viewed as a corporate socially responsible
corporation.

Shell CSR Strategy & Claims

Together with BP, Shell is the best-placed oil major for energy transitions
amongst Europe's oil giants. They both have big ambitions in the renewable energy
sector. Since both of them own the biggest retail networks, they are looking to and are
able to gradually transform their fuel stations into charging stations or hydrogen stations.
This shows us some of the good intentions Shell has for our society. They are really
trying to make a change.

Besides this claim, Shell tries to live by their core values, being: honesty,
integrity, and respect for people as well as to keep focussing and improving safety. For
them, this means operating in an ethical and transparent way.

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 Announced in February 2021, Shell launched their main CSR strategy: Powering
lives. It has four main goals which supports their purpose: “to power progress together
by providing more and cleaner energy solutions” (Shell, 2021). The four goals are:

- Generating shareholder value:

Shell looks to generate shareholder value by more efficiently allocating its

resources and growing value through a dynamic portfolio.

- Achieving net-zero emissions in step with society

Shell has set a target to transform its business into a net-zero emissions
business by the end of 2050. As most of us know, the UN Paris Agreement aims
to limit the rise of our global temperature. By becoming net-zero emissions, they
will also support the goal of the UN Paris agreement.

Shell claims to reduce emissions from their operations and from the fuel and
other products they sell to their customers. One way they will try to achieve this is
by capturing and storing emissions safely underground using reliable technology
as well as balancing them out by using forests.

- Powering lives

Shell powers lives through its products and activities. They support society by
offering them a reliable energy source for their homes, businesses, and
transport. They offer employment opportunities, heating, and lighting. They
power lives by paying their taxes, developing people and boosting local
economies. As I mentioned earlier, they aim to help everyone gain access to
clean, affordable energy. One of their ambitions is to provide 100 million
consumers with reliable electricity in markets that currently do not have it yet.

- Respecting nature

Protecting the environment seems like a rather weird claim to make when the
organization is responsible for deforestation etc.… Shell aims to reduce waste
and make a positive contribution towards the biodiversity. They want to reduce

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their impacts on the environment by understanding, avoiding and respond to the
potential impacts their activities may have on biodiversity and the ecosystem.

They communicate with the locals near their operations and protect the local
environment near their activities such as, wetlands, natural habitats, and
threatened species. Shell also made the claim that they are committed to not
explore or develop oil and gas resources within World Heritage Sites.

Shell cannot entirely cease all the destruction they do, bu they aim to minimize
the impact of their projects by applying a decision-making framework consisting
of four key actions: avoid, minimize, restore and offset.

First of all they try to check if they can avoid any impact on the nature. Only when
avoidance is impossible, they will aim to minimize their impact and when its
necessary, apply mitigation measures. Whenever Shell is aware they had a
negative impact on a certain area, they will work with conservation experts and
communities to restore ecosystems by for example planting vegetation or
adjusting and redesigning parts of their operations to reduce the negative effects
on local wildlife.

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Negative consequences/impact of Shell activities

The Dutch Royal Shell is obviously involved in a lot of affairs. Oil spillages and
extreme pollution are unfortunately no surprise to many when it comes from these type
of businesses. As I mentioned earlier, as hard as this company tries to be socially
responsible, the industry simply doesn’t allow it to be 100% sustainable, without any
damages.

In 2018 there was yet again an issue with one of their pipelines. A tremendous amount
of oil spilled into the ocean. A mere mechanical failure caused an insane impact on the
ecological lives, the local communities and its citizens. The consequences from the
spillages don’t end after a short time. The farmers and fishermen replied that their life-
sustaining resources are forever changed. The ecosystem was and still Is severely
damaged by this. Getting food and clean water has become much harder. The
communities argued that Shell should step up and provide alternative water supplies as
well as provisions. This comes to show that Shell was not yet clearly communicating
their CSR, since it left these communities in a burden (Powering Lives was not yet
established).

Furthermore, a year later claims were made against Shell claiming that they would be
violating the human right of Nigerian employees. Many complaints flew in saying salaries
aren’t paid on time and healthcare provisions are a bare minimum. We can conclude
from this that Shell might not be living up to the fair standards stated within their CSR
report.

A more recent affair which contradicts their claims within their sustainability report is that
Shell was trying to explore for oil using seismic tests. These activities were located along
the South Africa’s eastern coastline, near vital whale breading grounds. They were
quickly sued by the lawyers of South African campaigners and green groups.
Unfortunately court voted in favor of the oil company because there was a lack of
evidence they would be doing “irreparable” harm, and the delay process was pushed in
favor of Shell because of the costs of the delay.

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Shell had dropped their earlier plans to develop an oilfield in the North Sea after
receiving a bunch of criticism, but then they decide to continue this project. This shows
us that they are showing only a small good side and they continue to behave in a less
sustainable way, because harvesting oil will always have a bad impact.

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Conclusion

After conducting this desk research and doing the analysis, its safe to say that
the oil industry will always be viewed in good and bad lighting at the same time. These
companies provide our society a lot of growth and impact it in many ways, positively and
negatively. Harvesting oil and capturing gas is simply a destructive process. This does
not mean that these companies are evil and ruin our world. Shell is severely aware of
their actions and is seriously working on becoming socially responsible. They accept
their bad side, it is unavoidable to displease some people. But they because they are so
aware, they want to be transparent about it and show the world what they are working
on, how they are trying their hardest to minimize their pollution, find new ways of working
more efficiently and less destructive.

The analysis also showed that they aren’t always following their CSR report
claims 100%. I believe Shell and all the oil companies are in a tough spot to please
everyone. As long as Shell is honest and provides support for the areas they affect, I can
say they are necessary for continued growth in our world. The products they provide are
the fuel for a very large proportion of all the operations within our society and affect our
living conditions tremendously in a positive way.

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References

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https://insights.energydais.com/corporate-social-responsibility-in-oil-and-gas-
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Shell. (2020). Sustainability at Shell. Shell Sustainability Report 2020. Retrieved

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Dutch Shell. ResearchGate. Retrieved December 4, 2021, from
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Ambrose, J. (2021, December 3). Shell to go ahead with seismic tests in whale breeding
grounds after court win. The Guardian. Retrieved December 5, 2021, from
https://www.theguardian.com/business/2021/dec/03/shell-go-ahead-seismic-tests-
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