Analyzing Responsible Business Practices in the Oil and Gas Industry

This report provides a comprehensive overview of corporate social responsibility (CSR) within the oil and gas industry. It explores the CSR practices of companies like ExxonMobil and Chevron, detailing their approaches to stakeholder engagement, environmental sustainability, and ethical conduct. The report also examines the Deepwater Horizon explosion and oil spill, analyzing its environmental and ethical implications. Furthermore, it highlights best practices for the industry, including safety measures, the adoption of renewable energy sources, and the importance of collaboration and energy efficiency. The report concludes with recommendations aimed at mitigating risks and promoting responsible business practices within the oil and gas sector, ensuring a balance between economic growth and environmental protection.

Running Head: Responsible Business
Responsible Business

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Contents
Introduction.................................................................................................................................................1
CSR practices in Oil and Gas industry..........................................................................................................1
Shareholder of Oil and Gas industry............................................................................................................2
Deepwater Horizon explosion and oil spill..................................................................................................4
Best practices in the industry......................................................................................................................4
Ethics related to the case............................................................................................................................7
Recommendation........................................................................................................................................7
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10

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Introduction
The purpose of this task is to provide an overview of the corporate social responshebilities of the
company present in oil and gas industry. The report provides the social responsibilities of the oil
and gas industry with respect to its stakeholders and shareholders. It also states the Gulf of
Mexico issue faced by the industry which degraded the environment. Further recommendations
to the companies are provided with the precautionary measures so that such issues get depleted.
Oil and gas industry is majorly related to the environment extraction due to which mishappening
of the company leads to make negative changes in nature. Further details about the task are
discussed below:
CSR practices in Oil and Gas industry
Corporate social responsibility refers to the duty of all the organization present in that
industry to initiates the business activities in such a way that it does not harm any
stakeholder in the industry. As discussed above it shall be noted that the oil and gas
industry is highly risky and prone to threat industry under which a minor mistake can
adversely affect the nature. The initial responsibility of the organization is to recognize
and understand the complexity of the business. With this effect, major problem of the
industry will reduce (Gutierrez-Miravete 2013). Further, in the oil and gas industry
major work which is performed is the extraction of natural resources from the land. So, it
can be said that work of the industry is involved with nature and environment, so the
industry shall initiate activities with which no person present in the society (suppliers,
neighbors, government, and investors) get dissatisfied with the business activity. Also,
these activities shall not cause any harm to any person as well. On the part of the
industry, a prior intimation of changes in the system application of organization, prior
approval of stakeholders of the organization, compliance of social and ethical norms etc.
are some of the corporate social responsibility which the industry on a whole shall aim to
follow (Berkowitz, Bucheli, and Dumez 2017).

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Shareholder of Oil and Gas industry
The shareholders of the oil and gas industry are the companies working in this industry.
Talking about two companies working under the oil and gas industry are ExxonMobil
and Chevron Corporation. Further, the CSR activities of both the company are discussed
below:
1. ExxonMobil Company
The fact shall be remarked that ExxonMobil is renowned as the best company which
understands and successfully initiates the corporate social responsibilities. Talking about
the corporate social responsibility of the company, the corporate citizenship report states
the following aspects of the company:
 The company aims to initiates the sustainability of the managerial activities so as
to create a brighter future ahead. The company works to expand the supplies of
reliable and affordable energy for the purpose of economic growth of the whole
community (ExxonMobil 2016).
 Safety and workplace management is another social responsibility which the
company ExxonMobil successfully manages in the society. As the company
aims to provide personal safety to each and every employee connected to the
organization. The company regularly aims to mitigate the risks associated with
the daily activities of the employees.
 Also considering the responsibility towards securing the nature, the organization
initiated climate change risk management strategy. Growth in demand for
energy is a threatening situation for the society as it is depleting the natural
resources. So, the organization is developing solution to reduce the effects of
greenhouse gases and save the environment (Ahmad, et. al., 2017).
Stakeholder of ExxonMobil Company
The two stakeholders of the company are government and shareholders of the company.
With respect to them, ExxonMobil Company initiated activities of the conservation of
environment and protects the community from calamities. The company timely paid the
rent and taxes to the government to avoid problems. And with regards to the shareholder
the company always gave prior intimation of the extraction related activities. Also the
shareholders are interested in the profits earned by the company and the investment of

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the company in different sectors. So, the company contributes a share of the income on
securing the environment (ExxonMobil 2017).
2. Chevron Corporation
Chevron Corporation is world renowned Oil and Gas Company whose approach for oil
and gas industry is to be socially responsible and ethically right for the activities which
the company performs in the external environment. The organization supports the human
right and aims to provide benefits to the employees who work there. Further activities
initiated by the company are:
 Creating prosperity is the objective of the company. This refers to the initiation
of the organization to build a lasting image on the mindset of the stakeholders of
the company by providing effective and efficient services.
 Safety is of people is the topmost priority of the company. Chevron Corporation
initiate all the activities in the organization concerning to the health and safety of
the people connected to that activity (Chevron, 2017).
 Due to operating services in oil and gas industry, the company somehow harms
the environment. Thus in order to negotiate the effects of the activities, the
organization operates robust, cost-efficient and practical activities to save the
nature.
Stakeholder of Chevron Corporation
Talking about the two stakeholders of Chevron Corporation that are government and
shareholder, it shall be noted that the organization contribute the share towards the
stakeholder engagement activities. Initially talking about the government, the companies
pay taxes as it is the revenue source of the government and also the companies as
discussed above supports the government in implementing action plans to save the
nature. Apart from that prior approval of the government is always taken before
initiating any extraction activity on the land.
Next talking about the shareholders of the companies, thee organizations provide safety
and practice sustainable activities to achieve the satisfaction. Greenhouse gas emission is
another area in which the customers are majorly interested, so for that, the companies
initiate mitigation to support the nature of such hazardous gases (Alazzani, and Wan-
Hussin 2013).

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Deepwater Horizon explosion and oil spill
One of the issues related to the oil and gas industry which caused a huge disaster in the
environment is the Deepwater Horizon explosion and oil spill. In early 2010, on 20th
April the deepwater horizon oil platform located near the Louisiana coast got attracted to
a calamitous explosion. The Deepwater Horizon rig was owned and operated by
Transocean and oil company BP (Farrell 2011). On this horizon, the oil well was located
on the seabed 1,522 meters below the surface. Further, on April 20, a surge of natural
gas exploded through concrete core which was being installed by the contractor
company Halliburton for the purpose of sealing the well for the later consumption. The
core of the rig was too weak to uphold the pressure due to which such event happened.
Post this event, the natural gas traveled Deepwater rig riser to the platform, this resulted
in ignition due to which around 11 workers died and 17 got injured (BBC 2017). The rig
sank on 22 April morning which continued to escape the oil in the water which got in
touch with the methane gas and drilling water which resulted in explosion and firestorm.
Further, this effect was protected with blind shear ram but this device also failed. Lastly,
the oil spill continued till July 15 and later was closed with a cap; also relief well was
used to permanently seal the well. The Gulf of Mexico oil spill is one of the biggest
spills of all times which resulted in huge environmental damage and cause the death of
many people as well (Kostka, et. al., 2011).
Further it shall be noted that there are many other issues caused due to this problem.
Relating to the corporate social responsibilities adhered by organization, it is important
to look after the human rights and environmental health as well. It is the right of the
people to live in clean environment and also ask the organizations to initiate activities
which can help them to sustain in the environment. Also the companies present in the oil
and gas industry shall focus on environment health due to which substantially health of
people will improve.
Best practices in the industry
With respect to the Gulf of Mexico problem caused in the country, many people were
adversely affected with this activity. Thus, oil and gas industry being more prone to risk
shall work carefully. Also the stakeholders present in the oil and gas industry shall make

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use of best practices so as to eliminate the catastrophic problems. Further the best
practices which shall be followed by companies are discussed below:
 Safety measures around oil spills: As noticed in the above mentioned
statements that the industry has several issues which cannot be ignored at any
cost but it can be prevented to some extent. So, if policies and safety measures
are developed around the working culture of the company then such destruction
might end. The organizations develop a framework of policies and safety
measures which shall be used by the company in case of emergencies. These
policies will help the company to seek rightful measures when it faces any kind
of problem during the course of action (Lin, and Mendelssohn 2012). Also such
policies help the company to initiate the day to day activities. Risk assessment
measures initiated in the organization will help them to look for the areas and
activities in the company which are higher prone to risk and correct them
(Solomon, and Janssen 2010).
 Renewables: the oil and gas industry play a huge impact on the greenhouse gases
emission in the external environment, thus considering to that it is the need of the
current ear that the companies shall switch the activities a product mix that
consists of renewables. With the initiation of such activities it will become
effective for the organization to manage activities without emitting waste and
hazardous gases. However this activity will take its time to initiate in the
organization, also the company might incur higher charges than expected in this
process but the outcomes of this approach will successfully occur positive only.
Further it shall also be noted that along with policies implementation, strategic
decision making is also needed in the organization so as to make this framework
work in long run (Perks, et. al., 2013). So, the organization shall focus on
decision making and implementation process which shall help the organization to
effectively run the newly developed framework. Also innovative tools and
activities shall be initiated in the organization which shall eliminate the use of
hazardous substances and create good environmental impact (Comyns, and Figge
2015).

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 Collaborate to change: energy consumption is an integral part of lives of human
beings. Starting from all the basis day to day activities and ending to all the
complex activities initiated by people, people require energy in the activities. Oil
and gas sector provides such energy to people for usage, and as the consumption
level of energy increases subsequently the company starts to increase the
production as well. Resulting to which, this process genuinely harass the
resources; so in order to create a midway to resolve such problems the
organizations shall collaborate with other industries and customer advocacy as
well. With this process all and industries can work by co-operating with each
other and use substitute resource to create sustainability in the environment.
Looking at the above mentioned case of Gulf of Mexico, if all the industries
would have cooperated with each other to resolve the issue then the problem
might not become disastrous (McNutt, et. al, 2012).
 Energy Efficiency: the oil and gas industry is a highly sensitive industry under
which the greenhouse gases emitted in the environment from the combustion of
stationary and mobile internal combustion engines causes major effect on the
environment sometimes leads to unseen calamities as well. So, the oil and gas
organization present in the environment shall mitigate emissions, global
initiatives shall start which shall measure, manage and reduce the emission
(Reddy, et. al., 2012).
 Partnership initiative: in order to inculcate the CRS approach in the
organization, the companies shall develop the partnership with the stakeholders
including the government. With this coalition the companies shall co-operatively
develop new principles to address and make changes in the social issues affected
in the industry and the people present in it. "Extractive Industries Transparency
Initiative" (EITI), is one of the initiative which was initiated by ExxonMobil,
World Bank and other companies so as to ensure that adequate sum of money is
invested in the social programs and corruption by officials is reduced (Liu,
Garcia, and Vredenburg 2014).
 Communication: Communication for the cause is one of the most important
tasks as it helps of the organizations to beware of it and take proactive measures

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for it. Communication the framework shall be defined which shall initiate
communication between all the organizations present in the oil and gas industry.
Looking at the case, if prior intimation had been issued to organizations for help
then other organizations would have collaborated to help and secure the
environment (Raufflet, Cruz, and Bres 2014).
The above-mentioned practices are regarded as best practices because these practices satisfy the
requirements of nature and halt the organizational activities which can adversely affect human
lives and environment.
Ethics related to the case
Relating the above-mentioned statements to the normative ethical theory it shall be noted
that the theory states that people should attempt activities in the environment if it is
ethically correct. All activities presented in the environment should help the community
a better living. Further the deepwater horizon act was not ethically correct as it destroyed
the nature and attacked many unnatural deaths as so. So, to compensate for the cause, the
organizations involved in the case shall make use of best practices mentioned above.
Also with reference to the traditional theory of ethics, organizations which are part of the
oil and gas industry shall use modern techniques in the business process so that
operations are also followed without hurting the nature (Isaak 2017).
Furthermore relating the Utilitarianism theory to the CSR practices used in the
organization it shall be noted that any activity which produces good values on moral
good can be regarded as CSR practice. With regard to this, the organization shall initiate
activities which are morally right irrespective of loss of profits in organization.
Recommendation
The above mentioned are the best practices which shall be initiated in every organization
present in the oil and gas industry. Further there is a scope of improvement in the activities of
the business so as to such Gulf of Mexico issues from happening. So the recommendations
are discussed below:

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 Develop protocols to pass information: protocols shall be developed in the
organization so that proper safety measures can be initiated in the organization. If
there is efficient and effective information communication system in the organization,
then would get easy for the companies involved in the issue to take proactive measure
to save the environment from degradation. Such protocols will initiate flow of
transparent information in the organization due to which every person will get to
know the real facts about the case and information shall be provided to the people
related to the issue only. This will result in more helping hands to the organization
(White, et. al., 2012).
 Catalogue and contact area expert in marine: In the coastal region, where people
are more prone to disasters, at those places the organization shall place employees
who are capable enough to handle the emergencies occurred with them. Areas in
contact with the hazardous substance shall have at least one or more expert who are
qualitative and efficient inn solving such issues.
 Offshore cleanup options: due to the extraction and other practices of the
organization present in the oil and gas industry, the environment gets affected
adversely. So the nature requires regular cleaning of the land and the marine area
where such oil reserves are present. This will show positive effect on the life of
animals living in that area and it will also positively affect the life of people as well.
Offshore cleaning will also save the nature and oil reserves from depleting to some
extent. So, machinery and regular land and sea checkups shall be initiated by the
organization to fulfill the corporate social responsibilities of the company (Allan,
Smith, and Anderson 2012).
 Also the organization shall give prior notice for the activities which the companies
are going to implement in the society. This will help people to suggest the
organization corrective action and if the people are still not satisfied then such people
can complaint about it as well. So human right shall be taken care by oil and gas
industries.
 Chemistry of oil and weathered products: the organizations shall understand the
chemistry of various oils and the products of the weather. The company shall look
after the chemical reaction caused by combining of both the products in the

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environment (Jain, Aguilera, and Jamali 2017). So all the products which can create a
negative reaction by mixing itself with other gases present in the environment shall be
kept at safe so as to avoid problems. With the help of this the company can easily
avoid most of the problems attracted with the organization.
 Technical response incidents: responses to the issues shall be sought with the help of
scientific and technical solutions. Instead to applying solution related to political
aspects, the companies shall consider scientific and technical solutions to avoid and
excavate the problem (Michel, et. al., 2013).
 The organizations shall initiate environmental clean activities which analyze the
society needs as well and implement actions (Mariano, et. al., 2011).
Thus these are the following measures with the help of which the organizations can sought to
solve the problem occurring in the oil and gas organization.
Conclusion
Thus in the limelight of above mentioned events, the facts that shall be noted is that without oil
and gas sector, no person would survive in this entire world. But somehow the activities present
the oil and gas industry adversely affect the nature, so for that purpose the organizations need to
understand the corporate social responsibilities and work on them so as to reduce or compensate
the effect of the business activities. Thus, the above mentioned task discusses about the issues
caused in the organization and the best practices to improve the environmental degradation.

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