MMH733 - Valero Energy Corporation: Sustainable Development Analysis

This report delves into the sustainable development strategies of Valero Energy Corporation, an international player in the oil and gas industry. It examines the company's organizational structure, including its various segments, and its approach to implementing Sustainable Development Goals (SDGs). The report highlights Valero's current sustainable foci, such as employee protection, customer satisfaction, and community development, and its use of the Commitment to Excellence Management System (CTEMS). It identifies the key factors driving sustainable development within the organization, including increasing population, price fluctuations, and environmental impact. The report then analyzes the relevance of specific SDGs, particularly Goal 12 (Responsible Consumption and Production), Goal 13 (Climate Action), and Goal 17 (Partnership for the Goals), to Valero's operations. The report also discusses strategies for implementing these goals, such as using efficient technology, implementing waste management techniques, and introducing development programs. The report concludes by summarizing the challenges and opportunities Valero faces in its pursuit of sustainable development.

RUNNING HEAD: Sustainable Development of Valero Energy Corporation
Sustainable Development Strategies
Valero Energy Corporation
Systemjp
1/17/2020

Sustainable Development of Valero Energy Corporation
Contents
Introduction...........................................................................................................................................2
Organisational information....................................................................................................................2
Implementation of the Sustainable Development Goals........................................................................3
Current sustainable foci of the company............................................................................................4
Commitment to Excellence Management System (CTEMS).........................................................4
Factors driving the management of sustainable development............................................................5
Present application of SDG’s.............................................................................................................5
Most relevant SDG to the organisation..................................................................................................6
Goal 1 Responsible Consumption and Production (Goal 12).............................................................6
Goal 2 Climate Action (Goal 13).......................................................................................................7
Goal 3 Partnership for the Goals (Goal 17)........................................................................................8
Strategies and relevancy of SGD’s implementation...............................................................................9
Use of efficient technology................................................................................................................9
Implement effective waste management techniques..........................................................................9
Introduce development program........................................................................................................9
Conclusion...........................................................................................................................................10
References...........................................................................................................................................11
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Introduction
This report aims to identify the role of Sustainable Development Goals, SDG's in the
development of an organisation at the international level. Energy and petrochemical
industries perform their operations interacting with the natural environment and their actions
affect the natural resources.
This report will discuss the implementation and application of Sustainable Development
Goals in an energy operating industry, and strategies useful in the management of internal
and external activities to manage the sustainable development of the organisation. This report
will discuss the major challenges faced by an organization in the process of attaining the
sustainably developed goals and will identify the factors driving the organisation to attain the
sustainable development in an energy and petrochemical organisation performing the
operations internationally. Organization selected for the report is Valero Energy Corporation
dealing in the oil and gas industry.
Organisational information
Valero Energy Corporation, established in 1980, is dealing as international prime
manufacturer of and marketer of petrochemical products and transportation fuels and
operating with many subsidiaries. It is a Fortune 50 company and based in San Antonio and
Texas. It holds 15 petroleum refineries with a combined capacity to produce 3.1 million
barrels per day and 1.73 billion gallons per year. It is an international dealer in the oil and gas
industry with 50-megawatt wind farm and 11 ethanol plats with a production capacity of 1.2
billion US gallons per year (Home, 2020).
It is one of the largest retailers operating brand in the United States operating approximately
6,800 stores of retailing and wholesale outlet in Canada, the United States, and the United
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Kingdom. It also has a joint venture partnership with Diamond Green Diesel; it is the largest
renewable energy diesel plant in North America. Valero Energy Corporation had three
important and reportable segments including a new segment with a joint venture partnership.
 Valero’s Refining Segment
 Valero’s Ethanol Segment
 VLP Segment
 Valero’s Renewable Diesel (New)
Implementation of the Sustainable Development Goals
The global goals or the sustainable development goals born and introduced in the year 2012
by the United Nations in a conference of the Rio de Janeiro, with the aim to lead the
operating business in a way where they will perform their actions carefully to meet their
goals (Agudo-Valiente, Garcés-Ayerbe and Salvador-Figueras, 2013). These goals were the
replacement of Millennium Development Goals and aims to reduce the poverty, disease,
illiteracy and many other serious issues faced by the societies, and to develop the
environment saving factors as well. Implementation of Sustainable Development Goals in the
Corporate Social Responsibility report is compulsory for the business organisation
representing impact of their activities on the environment and society and steps taken by the
organisation to develop the society and environment. Energy sector deal the operations by
using the natural resources available in the environment and perform refining actions to
supply the final product to the customers hence they directly interact and affect natural
resources. Implication of the sustainable development goals is very essential for the energy
sector but it also has some challenges. Implication and use of SDG's in the Valero Energy
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Corporation are very essential but many challenges are potential to occur in the process
(Castelo Branco et al., 2011).
Current sustainable foci of the company
Valero Energy Corporation includes its responsibility to give back to the stakeholders
including large groups of employees, customers and many more. Current focus if the
organisational activities performed in the organisation is related to the employees’ protection,
customer satisfaction, community development, and development of the governance and
stakeholders (Agudo-Valiente, Garcés-Ayerbe and Salvador-Figueras, 2013). Present focus
of the sustainable operating towards the development of the organisation is related to the five
guiding principles;
1. Safety
2. Environment
3. Community
4. Employees
5. Stakeholders
Commitment to Excellence Management System (CTEMS)
This is a system used and implemented by the organisation to plan, direct, and attain the five
guiding principles of safety, environment and many more in driving operational excellence
with a systematic approach. This approach is used by the organisation to meet the
commitment of ensuring the operations of the fuel and energy with the safety of the
employees and community, this approach suggest and guide the organisation to manage the
operation with the application of the available resources in sustainable manner meeting the
stakeholder development (Castelo Branco et al., 2011). Hence, present foci of the
organisation are to manage the resources with the safety of the employees, development of
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the community, and meeting the corporate social responsibility towards the environment
protection and development (Du and Vieira, 2012).
Factors driving the management of sustainable development
Oil and gas energy industry are important driving industries in the economy of a country, as
rising demand of the fossil fuel is increasing the options for performing the best but on the
other side process of oil extortion and filtering is very costly and time consuming leading the
challenges to the companies (Du and Vieira, 2012). Sustainable development in the
organisation of oil and gas sectors is very challenging for the companies, Valero Energy
Corporation uses the following factors to manage the operations in the organisation.
Increasing population affect the operation of any organisation or company, Valero Energy
Corporation is dealing in three segments related to the fuel supply for the transportation,
green gas, and renewable oil availability at the international level. Increased population affect
the demand and pricing of the product. Price fluctuation in the sector raise the competition in
the sectors, impact on the naturally occurring resources is very high. Extortion of the crude
oil and transformation of that in the petroleum and other useful energy resources cost very
high and affect the environment, climate of that place as well (García-Rodríguez et al., 2013).
Present application of SDG’s
Application of SDG's in the sector of oil and gas industry is very essential, as this sector
perform its operation with the help of nature and environment hence they are ethically
responsible to manage the loss caused to the environment and climate due to their activities.
Sustainable development goals implemented by the United Nation are for the effective
control of the operating organisation in the business world (García-Rodríguez et al., 2013).
These goals contribute to the employees, society, environment, and climate and community
development. Valero Energy Corporation did not launch or follow any particular Sustainable
Development Goals in its Corporate Social responsibility but it has guiding principles
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contributing towards the safety of employees and environment, development of stakeholders
and community development with effective leadership and management (Guriro, Mehraj and
Shaikh, 2019). It has no direct expletory representation of Sustainable Development Goals of
the United Nations but follows the implications of the goals in the guiding principles
contributing towards the development of community, society, and environment in ethical
manner of responsibility.
Most relevant SDG to the organisation
Oil and gas energy sector deal with the operation of fuel production and supply management.
The manufacturing process in the sector follow a particular process and this process affects
the environment at each stage, Valero Energy Corporation performs process and storage,
transportation, refining and distribution function of the oil and gas value chain, hence it
affects and includes numerous stakeholders. These stakeholders invest their time, money and
force to gain profitable outcomes in financial, legal, and ethical manner. Identification and
determination of the most suitable sustainable development for an organisation is decided on
the base of its size, financial performance, and impact over the environment, operational
activities and report of corporate social responsibility (Ketonen-Oksi and Valkokari, 2019).
Valero Energy Corporation is leading, multinational, successfully stable organization, dealing
the refining and production of the fuel used for the transportation, diesel and other energy
resources distribution with a large number of employees and performing its operations
worldwide, in the natural resources consummation (Ketonen-Oksi and Valkokari, 2019).
Hence most suitable Sustainable Development Goals for the organisation are as follows;
Goal 1 Responsible Consumption and Production (Goal 12)
Industries related to the extortion and consumption of natural resources are responsible to set
and implement a 10-year framework for the sustainable extortion and consumption of the
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natural resources. Valero Energy Corporation is one of the leading fuel and gas-retailing
organisation; it deals to supply the fuel, diesel, and gas usage to run many other operations in
the business (Kumar, Kumar and Vivekadhish, 2016). This goal allows the organisations to
set the target for implementation of the activities within the manner that resources obtain and
use substantially. Substantial use of the resources represents the availability of the natural
resources for the upcoming generation. Increasing population in the urban area affects the
natural resources; hence, this goal aims to attain effective management of limited resources to
save them for the next generation.
This goal aims to measure the impacts of footprints over the nature and try to manage the
negative impact of resource uses and consumption.
Natural energy resources took many years in manufacturing and improper use is potential to
cause issues, and unlimited extortion can lead many other issues to the climate and
environment. Hence substantial energy production and consumption goal from the 17 SDG's
is suitable to include in the list of Sustainable Development Goals Report of Corporate Social
Responsibility of the organisation (Lozano and von Haartman, 2017).
Goal 2 Climate Action (Goal 13)
Petroleum is one of the important source of energy in the world. Extortion of petroleum is not
direct but it is extorted in the form of crude oil mixture of many gases, oils, and chemical.
Process of extortion cause severe issues to the climate in a negative manner, crude oil
extorted from the land is toxic by nature. Issues caused due to extortion in the climate are
acid rain, air pollution, causes of many health issues to the nearby living community and
workers engaged in the manufacturing and production of the petroleum and other chemical
oils and products. Climate changes in the present days are main issues as combustion of
petroleum increases the amount of carbon dioxide emissions and other greenhouse gases.
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Increased greenhouse gases result in increases in the temperature and disturb the natural
circle of climate (Lozano, 2013).
The United Nations introduced the Climate Action Sustainable Goals to set the target to
2030, in this aspect industry operating functions in the oil and gas industries are responsible
for their sustainable actions towards the changing climate. This goal aims to take immediate
actions towards climate issues and raise awareness in the world to secure the climate and
prevent its negative impact (Lozano and von Haartman, 2017). Valero Energy Corporation
prevent its transportation and production activities by implementing this goal in its CSR
report management can issue guidelines to the worker to follow the sustainable manner of
petrochemical production and transportation.
Natural resources are available to facilitate human life, human activities of industrialisation
and extortion of the natural resources affect the surrounding climate, and uses of these
resources affect the climate negatively. To manage the climate meeting the natural
development this goals helps to manage activities in sustainable manner.
Goal 3 Partnership for the Goals (Goal 17)
Oil and gas industry affects the entire environment in many ways, mostly in a negative
manner. Environment consists of the natural environment, society, and community of a
country. Sustainable development agenda with the implementation of Sustainable Goals in
the CSR policies of an organisation target to attain the motive of a healthy environment for
the people and upcoming generation (Sarasini, 2013).
Partnerships for the goals introduce a concept to take initiative step towards the development
of business responsible for the effective operation of business activities. This goal target and
allows industry to tie up with the non-government organisations, government organisation
working as profit and non-profit organisations to enhance the living of community, society,
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and development of the nature and environment. This partnership can be in many forms like
for the development of sustainable technology that cause less negative impact over the
environment and develop the sources to increase productivity of the land in an area.
Partnership for the community development target to raise education and living standards of
the community and society, providing essential sources for better living, political partnership
with the long term investment in the development of challenging community increase the
employment and public welfare works (Vitaliano, 2010).
Valero Energy Corporation is a successful leading organisation and has effective leadership
qualities to enter into partnership with the organisations to attain the sustainable development
goals of the organisation (Ketonen-Oksi and Valkokari, 2019).
Strategies and relevancy of SGD’s implementation
Original meaning of the sustainable development in a manufacturing industry is the
identification of the effective utilization process for the available resources, to ensure the uses
in a manner that these resources can be used by the future generation as well (Walters and
Anagnostopoulos, 2012). To attain the goals of sustainable development Valero Energy
Corporation can use the given strategies;
Use of efficient technology
To meet the target of the sustainable development of the business and surrounding,
management of the organisation can use the efficient technology and machinery to
manufacture the petrochemical and other product. Various technologies are available in the
developed atmosphere adoption of these technologies can help the industry to extortion
sustainably and attain the sustainable leading profit in the industry (Kumar, Kumar and
Vivekadhish, 2016).
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Implement effective waste management techniques
Wastewater and waste of the oil and other chemical from the petroleum industry is very toxic
and harmful for nature, it can pollute water, air, and land. It has many negative aspects
possible to cause health issues, to ignore these loss industries in petroleum manufacturing
need to implement effective waste management or ware recycling techniques. Waste
recycling is a step to attain sustainable development goals and effective waste management
contributes towards the development of the community and society in many ways like health
and education (Walters and Anagnostopoulos, 2012).
Introduce development program
Raising awareness in the society, organisation, and public about the effective use of the
available resources by preserving them for the future generation is an effective step.
Development programs by the organisation are very profitable for attaining sustainable
development goals. Corporate social responsibility allows the management to introduce the
roles it will play towards the community, environment, and society but raising awareness
about the plan and training the people to attain the target will lead the organisational process
towards a sustainably developed organisation (Kumar, Kumar and Vivekadhish, 2016).
Conclusion
Based on the detailed analysis of the role of sustainable development goals introduced by the
United Nations to manage the activities performed by the business organisations, this report
concludes that these goals provide guidelines to the management. Implementation of these
goals in Corporate Social responsibility is important for large scale operating firms. Valero
Energy Corporation is a leading petrochemical manufacturing and transportation
organisation, it deals with the natural resources hence the implementation of suitable
sustainable goals is very essential for it. This report has suggested some suitable goals that
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are essential to involve by the management and strategies to implement and control these
goals in a sustainable manner. SDG compass method for the implementation of Sustainable
Goals allows the management to identify the need and proper process for the successful
introduction and attaining procedure implementation in an organization.
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