Corporate Social Responsibility. A Case of Caltex Australia

Running Head: Caltex Australia Corporate Social Responsibility
Corporate Social Responsibility. A Case of Caltex Australia
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Caltex Australia Corporate Social Responsibility 2
Table of Contents
1.0 Introduction...........................................................................................................................................3
2.0 Corporate Social Responsibility.............................................................................................................3
2.1 Carroll’s Model..................................................................................................................................4
2.2 The Wartick and Cochrane Model.....................................................................................................5
3.0 Key Stakeholders of Caltex....................................................................................................................5
4.1 The Caltex Risk Management Framework.........................................................................................6
4.2 Human Rights....................................................................................................................................7
4.3 Governance.......................................................................................................................................8
4.4 Philanthropy......................................................................................................................................8
5.0 Conclusion.............................................................................................................................................9
6.0 Bibliography.........................................................................................................................................10

Caltex Australia Corporate Social Responsibility 3
Corporate Social Responsibility. A Case of Caltex Australia
1.0 Introduction
Caltex is a vertically integrated oil company, which is to say it is involved in all aspects
of the oil industry (exploration, extraction, refining and marketing). Its supply chain involves the
use of pipelines, depots, terminals and fleets. Its marketing operations involve the operation of
service stations, convenience stores (Caltex, Woolworths, and Starmark), retail fuels, automotive
products (ATFs, grease and engine and gear oils), groceries, fast foods, automotive services as
well as car wash. They offer online account management where clients can through their website
access information as regards the company, its products and services. Caltex adopts the local
hiring policy where more than 85% of its employees are nationals of the countries within which
it operates. It has major presence in East Africa, East Asia, China, Middle East, South East Asia,
and South Pacific and is the only international petroleum firm that operates in all major Asian
markets.
Despite the importance of the oil industry, petroleum still remains to be a great pollutant
in the environment in all of its stages from extraction to consumption. Its compounds
(hydrocarbons) are highly toxic and whose combustions emit compounds such carbon dioxide,
nitrous oxides and aerosols which leads to increased acid rain and climate change, (Tuccella et
al., 2017). Oil spills in the oceans and seas are a great threat to marine life and even occur on
land when pipelines leak. Also the emission of volatile organic compounds such as benzene have
adverse effects on both the human life and environment, (Epa.gov, 2015). The 2010 Deep-water
Horizon Oil Spill involving BP which killed 11 workers and injured 17 as well as leading to loss
of revenue for thousands of people who rely on fishing and tourism in the affected areas puts the
oil industry players on the spotlight. This paper seeks to establish whether Caltex activities are
aligned with its corporate social responsibility and giving back to society.
2.0 Corporate Social Responsibility
CSR refers to a corporation’s ability to assess and take responsibility for the negative
effects of their operations on the society and individuals (Mallin, 2007). More often than not it
also involves giving back to society through charities for instance. Large companies trump on

Caltex Australia Corporate Social Responsibility 4
people and the environment in pursuit of the big bucks which they can also use to effect positive
change in the society. They can give back to society through charities and also use the influence
brought about by their financial standing to pressure governments and other companies to act
ethically to the society in large in terms of people and resources, (Staff, 2018).
Companies responsibilities are to strive to make profits, ensure they obey the law by
operating in adherence to the laws of the land in which they operate, engage in ethical practices
such as ensuring their products are safe for consumption, of the right quantity and quality and by
not misleading consumers and lastly be a good corporate citizen through philanthropic acts of
giving back to the society, for instance, through charities, (Carroll and Buchholtz 2015).
2.1 Carroll’s Model
The Carroll model is based on four pillars namely, economic, legal, ethical and
philanthropic responsibilities (Carroll, 1989). The economic pillar requires companies to act
profitably by undertaking activities that lead to this end. The legal aspect of this model requires
companies to abide by the laws of the land in which they operate in relation to their activities.
Companies are also expected to behave ethically through developing relationships with
customers and their employees. The Philanthropic aspect of this model involve giving back to
society and is usually through charitable activities. The importance of CSR increases with the
size of the company since the bigger the company the more coverage it gets.
Caltex Corporation has been highly successful in the economic arena and is a big player
in the oil industry. Caltex being in the oil industry, its main social responsibility is to the
environment given the pollution effect attributable to its activities and products. Caltex is
committed to limiting their environmental impact as well as addressing climate change, being a
choice employer given its vast activities in different regions, adding value to their businesses to
maximize shareholders wealth and being a great neighbor to all. In regard to the environment
they have undertaken various initiatives such as use of recycled water in their refineries saving
up to 4.5m liters water for consumption by households and underground tank replacement and
monitoring (Microsites.caltex.com.au, 2008).