Corporate Social Responsibility and Environmental Management

RUNNING HEAD: CORPORATE SOCIAL RESPONSIBILITY
0
Corporate Social Responsibility

Corporate Social Responsibility
1
Executive Summary
The report aims to understand the concepts and theories related to CSR. For that an
organization is chosen that is ExxonMobil that operates in the gas and oil industry. The report
highlights CSR practices and strategies of ExxonMobil. Further, the CSR concepts and
theories are related to the practices and strategies of the company in order to identify whether
the company is CSR friendly or not or can sustain in the market for long run and to identify
that different frameworks and models of CSR are explained that are six core characteristics of
CSR, three-domain model, Carroll’s pyramid and stakeholder theory. At last, few
recommendations are by analyzing all the CSR strategies and practices followed by
ExxonMobil that the company should focus on building a strong board committee that
focuses on building new technology and products that can contribute more to the society. On
the other side, the company should consider an additional domain that is ecological
responsibilities; it is recommended that the company should advance research for protecting
the environment so that both present and future requirements of the society can be met.

Corporate Social Responsibility
2
Table of Contents
Introduction................................................................................................................................2
Theories and Framework............................................................................................................2
CSR strategies............................................................................................................................6
Recommendations......................................................................................................................8
Conclusion..................................................................................................................................8
References..................................................................................................................................9

Corporate Social Responsibility
3
Introduction
Exxon Mobil Corporation is an American company that operates in the oil and gas industry
and headquartered in Texas. It was formed in 1999 by the merger of Exxon and Mobil. At
present, the company operates the following brands that are Exxon, Esso, Mobil, and
ExxonMobil Chemical. ExxonMobil considered one of the largest oil companies, as in 2007
the daily production of oil was 3.921 million BOE and reserves of the company in 2016 were
20 billion BOE. Further, the company is the largest refiner in the world with 37 oil refineries
in 21 countries. ExxonMobil focuses on producing chemical and energy products that are
significant in this modern era for the standard of living and economic development. The
company also focus to protect society, the environment and the wellbeing of communities
(ExxonMobil,2020).
ExxonMobil is a leading player at the global level and is able to achieve business goals along
with that the company is responsible to take care of the impact of their actions on society and
the community. In order to do so, the company adopted various sustainability principles and
integrate corporate social responsibilities with their business model. Corporate social
responsibility is considered a strategy that helps the companies to contribute to societal goals
and development of the society and community. Sustainability includes business activities
that are voluntary and demonstrates the inclusion of environmental and social concerns in the
operations of business and stakeholder interaction. Sustainability and corporate responsibility
are, therefore, a prominent feature of the business and society literature and also include
business ethics (Wang et.al,2018).
Theories and Framework
According to Maas and Boons (2017), Corporate social responsibility is a business model in
which the companies voluntarily decide to contribute to the betterment of society and
communities. Different authors have different views on the concept of CSR, due to that there
is no such universal definition has been established. CSR is considered a broad concept as it
can take various forms depending on the industry in which a company operates. With the help
of CSR activities and volunteer efforts, businesses and society both get benefits.

Corporate Social Responsibility
4

Corporate Social Responsibility
5
Core Characteristics of CSR
1. Voluntary
2. Managing externalities
3. Economic and social alignment
4. Practices and Values
5. Beyond Philanthropy
6. Multiple stakeholder orientation
CSR is taken as the voluntary activity as this depends on corporations whether to engage in
corporate social responsibilities or not. ExxonMobil engages voluntarily to conduct CSR
activities for the betterment of communities as the company invested $4 billion in emission
reduction, $3 billion on the reduction of greenhouse gases and $3 billion on energy efficiency
and more amount in economic and social protection. Further, the company also conducts
various activities keeping in mind stakeholders. ExxonMobil values and practices of CSR are
based on the safety, security, and welfare of employees. Hence, the above six are the core
characteristics of corporate social responsibility and ExxonMobil fulfilled these
characteristics this indicates that the company is sustainable and CSR friendly. (Vollera
et.al,2019).
Carroll’s Pyramid
Carroll provided two perspectives and suggested that CSR activities include four elements
that are legal, economic, philanthropic and ethical responsibilities.

Corporate Social Responsibility
6
Figure 1: Carroll Pyramid of CSR Source: (Carroll,2016)
According to Carroll, the organizations focus on fulfilling the expectation of shareholders,
profit delivering, being ethical, obeying the law and completing philanthropic responsibilities
which impact positively on the society (Carroll, 2016). ExxonMobil strives to complete its
ethical responsibilities by establishing an ethical code of conduct for its subsidiaries and by
clearly communicating expectations to employees, directors, and officers. ExxonMobil
completes its economic responsibilities by contributing to economic value to countries by
employing and giving training to local employees. In Angola, the company employed 91% of
local people, 98% in Malaysia and 94% in Nigeria. This indicates that the company focuses
on contributing to the development of the local economy by providing more opportunities to
local people. ExxonMobil also helps drive regional and local economic progress.
Philanthropic responsibilities include doing activities that lead to the company a good
corporate entity. For that ExxonMobil invest in research of new products for next-generation
that are advanced biofuel, carbon capture, energy, and natural gas technologies. Hence, from
the relating to the Carroll pyramid of CSR it can be said that the company has taken CSR
initiatives in each aspect.
Stakeholder Theory
The concept of CSR is totally liked with stakeholder theory as the stakeholders are the ones
for whom CSR practices and activities are done so that the organization and stakeholders

Corporate Social Responsibility
7
both can get maximum benefit. This theory states that the essence of the organization lies in
creating and building a relationship with stakeholders.
In relation to stakeholder theory, ExxonMobil CSR activities are related to satisfying all its
stakeholders; as to satisfy its employees the company provided computer-based training
related to human rights in 50 countries across the world and trained 17,000 employees on
voluntary principles on human rights and security. For satisfying customers the company
focus on eco-friendly products and processes and for satisfying government the company has
various policies to reduce the impact of corruption and bribery in its supply chain and to
bring transparency in payments to the government. The company complies with all the
domestic, foreign and state laws in order to bring transparency. On the other side to satisfy
the society the company focus on local or areas as the company operates in the oil and gas
industry due to this, workers of ExxonMobil work in the sensitive and remote environment
including biodiverse and underwater locations. In order to protect the environment from its
operation the company launched an initiative named “Protect Tomorrow”. Hence, it can be
said that all the practices and activities of the company committed to benefit of its
stakeholders.
Figure: 2 Relationship between CSR and Stakeholder Theory
Source: Lange and Bundy,2018
Three Domain Model of CSR

Corporate Social Responsibility
8
This model presented three core domains of corporate social responsibility that are legal,
ethical and economic responsibilities and these are depicted in a Venn framework. Economic
responsibilities include the contribution of organizations in the development of the nation and
for improving the condition of the countries. ExxonMobil contributes in this by putting
efforts for the development of the domestic economy as in order to develop the US economy,
Exxon planned to invest $1.3 trillion in oil and gas infrastructure by 2035 that will lead to an
increase in the gross domestic product of the US by $2 trillion. Thus, the economic
responsibilities of the company are fulfilled.
Legal responsibilities include that the businesses operate in a legal framework by complying
with industry laws and standards. The policies and practices of ExxonMobil based on the
United Nations “Universal declaration of human rights”. ExxonMobil is mainly concerned
about communicating its human rights expectations and principles in the supply chain.
“These expectations include references to international human rights frameworks, UN
guiding principles and the international labor law (Exxoncsr,2019). Hence, legal
responsibilities are also fulfilled by the company.
Ethical responsibilities ensure that the businesses abide by ethical framework while
operating. Further, ethical expectations include that business will conduct its operations in a
fair manner and even it is not codified laws. ExxonMobil corporate social responsibility also
includes respecting human rights. The company ensures that its operations have a positive
impact on society and influence people positively and all the operations and processes of the
company are conducted in an ethical manner.

Corporate Social Responsibility
9
Figure: 3 Three Domain Model
Source: Palakshappa and Grant,2018
From the above model and CSR strategies, it is analyzed that the businesses that are fulfilling
all its responsibilities related to legal, economic and ethical aspects are considered as CSR
friendly and sustainable businesses. Most of the companies are at the top because of its best
CSR practices and policies. This helps the companies to build a positive image in the market
and to strengthen its relationship with stakeholders.
CSR strategies
ExxonMobil has a panel that takes care of CSR activities and external sustainability aspects.
The company contributes to different areas of society such as environment, social,
governance and human rights.
Environment
ExxonMobil focuses on meeting the growing demand for energy across the world along with
reducing the impact of climate change on the environment. To mitigate greenhouse has
emission from its operation the company use energy efficiency techniques and deployed
technologies like cogeneration carbon and carbon storage. The company invested $4 billion
in emission reduction, $3 billion on the reduction of greenhouse gases and $3 billion on
energy efficiency. This resultant in the reduction of 15% emissions, avoidance of 21.5 million

Corporate Social Responsibility
10
metric tons of greenhouse gases and 400 million metric tons of CO2. Further, the company
also focuses on waste management by reducing the use of plastic and encouraging customers
to reuse and recycle waste (Exxoncsr,2019).
Social
ExxonMobil maintains a commitment to safeguarding the security and health of its
employees and the public by responsibly managing the impact of their activities and by
ensuring respect for human rights in their operations. The core values of ExxonMobil are
personnel safety, process safety, and emergency preparedness. With that, the company is able
to reduce the lost time incident rate by 80 % and provided $1 million for disaster relief in
order to protect humans. Moreover, the company focus on worksite employee’s wellness and
health and workforce diversity (Exxoncsr,2019).
The company recruited 36% of women in 2018 from an engineering college in the US in
order to encourage workforce diversity. Over the past years, the company hired almost 40%
of women in different positions from lower to higher. ExxonMobil employment policies and
practices related to recruitment, hiring, salary, and promotion are based on the commitment to
provide equal opportunity and workplace safety to employees. Further, the priority of the
company is the development of skills of its employees and recruiting exceptional talent that
leads to competitive advantage to the company can contribute to their best for business and
society. The career-oriented approach of the company leads to a retention rate of 96% and on
an average service of 30 years by an employee. In order to retain employees, the company
provide training, education, on the job experiences and invested $100 million per year for the
development of employees and for long term career growth (Grantham and Vieira,2018).
Community investments
The company invests in key issues like health care, education, disaster relief, and economic
development. The company invested $1.3billion to education, $170 million for health care
and $120 million for women's development and providing economic opportunities to women.
Through this, it can be said that the company is investing a huge amount for the development
of communities across the world (Exxoncsr,2019).
Engaging with Governments

Corporate Social Responsibility
11
ExxonMobil has developed a strong brand image in the market because of its business ethics
and transparency in the business processes. ExxonMobil participates and contributes to the
global platform in the big global issues in order to support the development of the world
economy. At last, the company tries to implement and support policies that encourage stable
investment for long term business viability (ExxonCsr,2019).
Recommendations
From the above analysis of Exxon CSR strategies and sustainable activities that are
conducted by the business, it can be said that the company is doing well and is well known
for its CSR initiatives. As the contribution of the company in all the domains is tremendous.
However, CSR is a broad concept and can include a lot more things for the benefits of
stakeholders. ExxonMobil should focus on building a strong board committee that focuses on
building new technology and products that can contribute more to the society as research and
development in the area of economic and social issues are less with that focus the company
can contribute more and enhance its corporate social responsibility strategy. On the other
side, the company should consider an additional domain that is ecological responsibilities; it
is recommended that the company should advance research for protecting the environment so
that both present and future requirements of the society can be met. From the study it is
identified that ExxonMobil has strong policies to retain and recruit employees, considering
this it is recommended that the company can conduct programs to encourage employees to
participate in CSR activities and also can give training to people so that employees can also
able to engage with the society. This leads to more satisfaction and employees feel valued
and this directly increases the retention rate and attracts more employees (Kim,2019).
Conclusion
It is concluded that the company is doing well and contribute more to the development of
society and the community. The CSR initiatives that are taken by the company are
appreciable and can be improved further as the concept of CSR is broader. There are many
areas where the company can invest such as in disaster management, relief camps for people
who are injured on sites and in the development of skills in local employees so that they can
contribute more. Hence, it is concluded that the CSR strategy of the companies helps the
company to build a strong image in the market.

Corporate Social Responsibility
12

Corporate Social Responsibility
13
References
Carroll, A.B., 2016. Carroll’s pyramid of CSR: taking another look. International journal of
corporate social responsibility, 1(1), p.3.
Exxoncsr,2019. About us. Accessed From: https://corporate.exxonmobil.com/
ExxonMobil,2020. CSR Report. Accessed From:
https://corporate.exxonmobil.com/-/media/Global/Files/sustainability-report/publication/
2018-Sustainability-Report.pdf
Grantham, S. and Vieira Jr, E.T., 2018. ExxonMobil's social responsibility messaging–2002–
2013 CEO letters. Applied Environmental Education & Communication, 17(3), pp.266-279.
Kim, S., 2019. The process model of corporate social responsibility (CSR) communication:
CSR communication and its relationship with consumers’ CSR knowledge, trust, and
corporate reputation perception. Journal of Business Ethics, 154(4), pp.1143-1159.
Lange, D. and Bundy, J., 2018. The Association between Ethics and Stakeholder Theory',
Sustainability, Stakeholder Governance, and Corporate Social Responsibility (Advances in
Strategic Management, Volume 38) (pp. 365-387). Emerald Publishing Limited.
Maas, K. and Boons, F., 2017. CSR as a strategic activity: Value creation, redistribution, and
integration. In Innovative CSR (pp. 154-172). Routledge.
Palakshappa, N. and Grant, S., 2018. Social enterprise and corporate social
responsibility. International Journal of Entrepreneurial Behavior & Research.
Vollero, A., Conte, F., Siano, A. and Covucci, C., 2019. Corporate social responsibility
information and involvement strategies in controversial industries. Corporate Social
Responsibility and Environmental Management, 26(1), pp.141-151.
Wang, Z., Hsieh, T.S. and Sarkis, J., 2018. CSR performance and the readability of CSR
report: too good to be true?. Corporate Social Responsibility and Environmental
Management, 25(1), pp.66-79.