Business, Society, and Planet: Shell and BP Sustainability Analysis

This report provides a detailed comparison of Shell and British Petroleum's sustainability reports, focusing on their core business activities, social, environmental, and economic impacts. It examines differences in their reporting practices, including climate change initiatives, community engagement, and transparency. The report evaluates both companies based on Zadek et al.'s (1997) criteria for social accounting, such as inclusivity, comparability, completeness, and external verification. It also analyzes the companies' values and reflects on a group discussion regarding their sustainability approaches, ultimately concluding that Royal Dutch Shell demonstrates a more comprehensive and transparent approach to sustainability compared to British Petroleum, despite both companies facing similar ethical considerations regarding environmental incidents. The report underscores the importance of sustainability in the oil and gas industry and the ongoing efforts of these companies to address climate change and societal impacts. The report can be found on Desklib, a platform for students to access past papers and solved assignments.

Running head: BUSINESS, SOCIETY AND PLANET
Business, Society and Planet
Name of the Student
Name of the University
Author Note

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Table of Contents
1.0 Introduction................................................................................................................................2
2.0 Discussion..................................................................................................................................2
2.1 Core business activities in the industry.................................................................................2
2.2 Difference of the two companies based on range of social, environmental and economic
issues............................................................................................................................................4
2.3 Differences between reports of Shell and British Petroleum.................................................5
2.4 Evaluation of social accounting approach according to Zadek et al.’s (1997) criteria..........6
2.4.1 Inclusivity.......................................................................................................................6
2.4.2 Comparability.................................................................................................................7
2.4.3 Completeness..................................................................................................................7
2.4.4 Evolution.........................................................................................................................8
2.4.5 Management policies and system...................................................................................8
2.4.6 Disclosure.......................................................................................................................8
2.4.7 External verification.......................................................................................................9
2.4.8 Continuous improvement................................................................................................9
2.5 Company’s values- Shell and British Petroleum...................................................................9
2.6 Reflection of the group discussion......................................................................................10
3.0 Conclusion...............................................................................................................................10
4.0 Reference List..........................................................................................................................12

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1.0 Introduction
The United Kingdom’s two leading oil and gas companies Shell and British Petroleum
are taken into consideration for this assessment. Every organization publishes their sustainability
report so that stakeholders of those companies can view their reflection on past performance and
future initiatives in terms of social and governance (ESG), environmental aspects and corporate
social responsibility to some extent. This assessment highlights the comparison of the two
companies based on their sustainability report. The difference between these two companies
based on the range of social, environmental and economic issues is also illustrated in the
business report. Moreover, a difference between the reports that furthermore describes the
differences of culture, attitudes, regulations and technology is also represented. The discussions
of the differences in this sustainability report based on the Zadek et al.’s (1997) criteria. Lastly, a
group dissection based on the preferences of one of the two considered organization will also be
discussed.
2.0 Discussion
2.1 Core business activities in the industry
Shell in the year 2016 had attained the annual revenue of $183,008 million which was
$222,894 million in the previous year (Statista, 2017)

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Image 1: Annual revenue of British Petroleum
(Source: Statista, 2017)
The annual revenue incurred in the year 2016 by Royal Dutch Shell $233.59 billion;
whereas, in the previous year the concerned organization have earned $ 264.96 billion (Statista,
2017).
Image 2: Annual revenue of Royal Dutch Shell

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(Source: Statista, 2017)
However, in terms of oil and gas sustainability ranking British Petroleum leads the Royal
Dutch Shell. In this business report, the difference among the two companies is effective as both
serve same performance and thus carrying a comparison between the two companies present a
greater overview regarding the activities towards sustainability.
Shell is associated with the business activity of oil exploration, development and
extraction, manufacturing and energy production, transport and trading and sales and
marketing. This information is present in the starting pages of the sustainability report of Shell.
BP on the other hand is also liable for performing the similar job roles. Another fact that is
necessary to address that is both the companies publishes their sustainability report from decades
and thus it can be said that both these companies are aware of their responsibility towards the
planet earth.
2.2 Difference of the two companies based on range of social, environmental and economic
issues
Shell has mentioned the issue on climate change and energy transition, Business ethics,
transparency and governance, environmental impacts, GHG and energy and Community
engagement and societal impact. According to the CEO’s letter, they are taking continuous effort
to ensure safety so that they can work without causing harm to people and the environment.
British Petroleum reported their social issues that are they have to play a crucial role in
business for lower carbon future to take action on climate change, focusing on safe operations,
maximizing value to society, respecting human rights and managing the local environmental
impacts. The letter written by CEO of the concerned organization written that $1 billion of

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investment was made for formulating and implementing low carbon technologies to build a
sustainable future. Thus, it can be said that both the companies are taking initiative for
sustainable business procedure.
2.3 Differences between reports of Shell and British Petroleum
Shell started their discussion of sustainability by representing their aim for running a safe,
efficient, responsible and profitable business. The positive and unique attribute of this report is
that they have presented their goals for the year 2016 and highlight the priorities for the year
2017. This approach shows that they have focused both on their current business strategies and
future business plans.
Shell also presented their work for addressing the climate change that is utilizing only the
natural gas into different products that is liquid fuels, hydraulic fluids and lubricants for final
use. The concerned organization also collaborated with government to create carbon pricing
mechanisms. Moreover, they also have taken steps for demonstrating CCS technology with their
global partners.
British Petroleum highlighted their key issues prior to any other information. However,
the report consists of the details of the business functions, their business trading throughout the
world and segmentation of their employees based on region and segments, which is not required
to be reported in sustainability report. In addition to that, there positive aspect of this report is
that they have presented their green house gas emission and their breakdown along with their
details for the year 2012 to 2016.
British Petroleum also presented their timeline of two decades that illustrates their
initiatives of tackling climate change. They have also represented a statistical representation of

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GHG movements from 2015 to 2016 along with their performance for reducing the climate
change impact.
2.4 Evaluation of social accounting approach according to Zadek et al.’s (1997) criteria
Lee and Vachon (2016) stated that there are total of eight principles under the Zadek et
al.’s (1997) criteria- inclusivity, comparability, completeness, evolution, management policies
and system, disclosure, external verification and continuous improvement. Iannuzzi (2017)
furthermore explains that these criteria assess whether or not an organization is auditing their
sustainable report appropriately. In this aspect both the companies- British Petroleum and Royal
Dutch Shell reported their issues, controversies and transparency in their business.
2.4.1 Inclusivity
Shell has successfully identified their Board of Directors (BOD) who is liable to assess
the governance of tax. These members also assess system of risk management and internal
control. However, the key members and their role in maintaining the sustainability are not
present. The committee about which the details are given is for the corporate social
responsibility. This committee is also responsible for measuring sustainability performance and
audit results.
Alike Royal Dutch Shell, British Petroleum also stated that their Board of Directors
evaluate the carbon emission and carbon footprint research. However in this case also, the
stakeholder’s details are not discussed.

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2.4.2 Comparability
Shell has information about their corporate social responsibility along with their
sustainable approaches. The details of the code of conduct is not discussed however a link is
provided in which the values and business principles of shell is defined properly.
British Petroleum does not include their CSR activities in their business sustainability
report. On the other hand, details about governance of sustainability issues are given in the
report. This committee is known as safety, ethics and environment assurance committee
(SEEAC) but the details about code of ethics is absent in the report.
2.4.3 Completeness
In both the cases, the pictorial representation is not present for all the aspects. Descriptive
detail is present that need much time to read and getting the information. In the sustainability
report for Royal Dutch Shell, the information only focused on energy transition that is addressing
climate change, utilization of natural gas, research and development for lower carbon
alternatives.
In comparison, British Petroleum’s sustainability report illustrates the sustainability in
every aspect that is climate change, energy transformation, supply chain and inventory
management. Details about freshwater consumption, water consumption intensity, air
emissions and environmental expenditures are discussed properly that on the other hand is not
present in Shell’s report. In both the cases the major accidents done by oil spillage is not
highlighted in the sustainability report. Thus, it can be said that some important controversy is
hidden in the report in both the case.

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2.4.4 Evolution
Identification of the target line is not given in the report but the planning for reducing the
carbon emission is present. However, the measures for reducing the number of accidents are
discussed. Shell provides the details of their safety target in terms of road safety and oil spills
only. British Petroleum in terms of major accidents consider vehicle accidents and traffic
accidents is discussed. One positive aspect in this case is BP’s report; the graphical interpretation
of the vehicle accidents is given for the year 2012 to 2016.
2.4.5 Management policies and system
Shell have formulated energy and climate policy, retaliation policy, Health, Safety,
Security and Environment and Social Performance (HSSE&SP) policy, child labor policy,
employment policy, fair-work policy, policies for equal opportunities and supply chain policy.
Policies in British Petroleum are formulated for risk management systems, greenhouse
gas policy, consumer behavior policy, human rights policy and corruption policy. In both the
reports there are definition of these policies are only present and the details of the
implementation of these policies on breaching of the business approaches is not present. Thus,
here also the sustainability report lacks some crucial details.
2.4.6 Disclosure
In the report, Shell mentioned that they have disclosed their every details from their form
20-F, File No 1-32575 but the data is not present for public use or preview. The company also
adhere Governments Regulations 2014 for disclosure related to payments. They have adhered to
the transparency aspect under the initiative of Extractive Industries Transparency Initiative

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(EITI). GRI report is not present however only the Environmental data and social and safety
data are disclosed for the year range of 2007- 2016.
BP only follows Extractive Industries Transparency Initiative (EITI) for maintaining
transparency. The suitability report of BP does not provide GRI index report which is necessary
in resenting the sustainability report.
2.4.7 External verification
In terms of external verification, Shell has taken the help from EY to audit their
performance in context of the sustainable business approach. British petroleum taken help from
the Deloitte to audit the report of their sustainability activities.
2.4.8 Continuous improvement
In both the cases, the CEO letter refers to the fact that they are taking initiatives for
reducing the carbon emission and making their oil extraction process more eco-friendly and
improve their system so that major accidents can be minimized.
2.5 Company’s values- Shell and British Petroleum
The value of the Royal Dutch Shell according to the sustainability report is to help
shaping more sustainable energy for the future, sharing wider benefits in their business operation
and executing a safe, efficient, responsible and profitable business.
The value proposed by British Petroleum is focusing on quality oil projects gas,
producing fuels and lubricants that can be used in cars, optimizing the growth of biofuel and
transforming operational performance.

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2.6 Reflection of the group discussion
There are two discussion sets among out team members regarding the preference
company in terms of their sustainability approach. In the first session, we have decided to hold a
discussion on their carbon emission approaches. It is found from the discussion that Shell has
taken effort to present data in different aspect that is climate change, community engagement,
social impact, safety measure, transparency policies. Whereas, there BP also focuses on the same
but does not provide evidence of their initiatives.
The second days we have decided to discuss about controversial things that newspaper
article provide but are not present in the report. The discussion led us to the conclusion that both
the companies have not illustrate the major accidents like transportation accidents and oil spill in
that affects the climate more adversely. Thus, in this case, we found both Shell and British
Petroleum to be unethical.
However, in terms of more details about the sustainable activities and formulation of
policies and maintaining transparency of data and business process, Royal Dutch Shell is
considered to be more sustainable than BP.
3.0 Conclusion
Enormous challenge facing governments and compliance issue are present in the
sustainability report for both the organization. Shell and British Petroleum are the two industries
that are taken into consideration. There are much information present in both of the sustainability
report but their initiative of reducing the problem of carbon emission is not present. Policy
details are present in both the report but the utilization of these policies is not given in the report.
In addition to that, the details about the all the crucial information related to controversy and

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adversity is not mentioned in the report. Thus, it is difficult to state whether their policy is
effective to maintain the sustainability of the earth. Lastly, another important aspect that is absent
from the report is the information about the code of conduct and data sheet of GRI index.

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4.0 Reference List
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