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Sustainability in Oil & Gas is much more than Environmental Performance

Posted by Stacy Richter on June 23 at 6:00 AM Guest blogger Colin Anton (CHRP, MBA) explains that sustainability in the oil and gas industry means much more than environmental performance....

Developing natural resources responsibly as an energy source is more than just minding GHG's and fresh water usage. True sustainability in oil and gas also relies on the communities in which we operate. Especially if we are dedicated to a 3BL approach; people, planet, profit.

How should Big Oil consider its communities as partners in its sustainability plans?

We do not inherit the earth from our ancestors; we borrow it from our children.

~Native American Proverb

Imagine what it would require for Big Oil to realize the implied responsibilities envisioned by the proverb above. Sustainability talk is nothing new in the eyes of big business, energy companies, oil and gas, or the communities where these industry players practice their exploration, exploitation and/or operations; what IS new is the extent of expectations that sustainability now requires. 

In 1987, the World Commission on Environment and Development produced the Brundtland Report.  Sustainable development was defined as “meet[ing] the needs of the present without compromising the ability of future generations to meet their own needs[1]”  Aboriginal (First Nations, Inuit, Métis, and Native American) peoples have traditionally and historically referenced a ‘responsibility to the seventh generation’ in the context of sustainability.  African nation communities have voiced that sustainability is about providing legitimacy and credibility while ensuring that poverty is alleviated. Historically, the reference to sustainable efforts by corporations has changed, transformed, and evolved; from corporate social investment (sustainability by good actions), to corporate social responsibility (sustainability by being a good corporate citizen), to the current standard corporately ensuring survival – environmental, social, economic, and community relations – corporate sustainability. 

The history of corporate sustainability has always been about tying economic profitability to social responsibility, through partnering with communities where corporations do business and mitigating the risks associated with managing those relationships. The future of corporate sustainability has to include engaging the communities affected by corporate operations, activities, land access, infrastructure, and overall impacts to better answer the questions around ‘what is that corporation’s ‘responsibility to the seventh generation[2]’? The 3BL is not detailed enough to act as a solid measure at the community level and more corporations are (or have) incorporated a sustainability framework similar to the one the figure below[3].

What are most companies doing now and where are the gaps they should focus on for improvement?

From the oil and gas perspective, the common theme for sustainability issues can be attributed to the need for industry players to use resources more efficiently, reduce environmental footprints, and improve social impacts and reputations. Front line gaps for many oil and gas companies include things like:

  • Managing reputation
  • Accountability of supplier and vendor environmental and social responsibility
  • Commitments to climate strategy, renewable energy and clean fuels
  • Resource diversification, bio-diversity and environmental impacts of resource exploration and operations, including depletion of natural resources
  • Commitment to workforce health and safety
  • Transparency in Social/community impacts.

The added elements of complexity in this discussion of gap identification are persistence and continuous improvements. For example, according to Management & Excellence S.A. (M&E) report on the “World’s Environmentally Most Sustainable 10 Largest Oil/Gas Companies of 2009”, BP was rated the number one. Fast forward 6 months and BP is now an environmental pariah – was complacency in the companies approach to sustainability a contributing factor?

Similarly, Schlumberger was considered the World’s Most Sustainable Oil/Gas Service Company for 2009[4]; tested by over 300 accepted sustainability, HSE, human resources, CSR, governance and transparency standards. Schlumberger focuses heavily on its workforce, health, and safety for successful sustainability measures.

In the oil sands, companies like Shell are looking to technology to bridge the sustainability gaps. By improving testing carbon capture and storage, improving technologies to increase oil sand extraction efficiencies and saving on energy use[5]. Obviously, GHG emissions are of great concern to companies like Shell and sustainability is of the utmost importance to operations and reputation. However, as referenced earlier sustainability can not be successfully achieved in a silo. The saving of 40,000 tonnes of GHG emissions does not on its own alleviate the need to remain persistent and invest in continuous improvements for the other components of corporate sustainability - environmental, social, economic, and community relations.

Currently, companies who show evidence of strong environmental and public impacts typically run highly visible community programs; corporate image and risk mitigation are significant drivers.

What are your recommendations?

This is a good question – what are my recommendations? The evolutionary nature of sustainability requirements (because that is what sustainability has become a requirement) leads me to believe that success is in persistence and continuous improvements. 

  • Silo initiatives may work in the short term as quick fix applications; the long term requires looking to the needs of our seventh generation. 
  • Engaging in relationships – real, transparent and meaningful relationships with the communities where corporations do business is a critical success factor for all corporations. In the long term these communities will supply the workforce, resources and access that is required to make a profit. 
  • Remove the complacency so associated with just meeting environmental compliance; there is already so many pieces of evidence where complacency has caused catastrophe, may be it is time to weigh the costs of action now to prevent greater expenditures later. 
  • Social aspects of sustainability should also be high on the list of gap mitigation. People (investors) do take action against companies that they do not trust. Whether it be by refusing to purchase products, refusing to work for, actively supporting legislations against, or even active demonstrations; no company can afford to ignore the social aspects of sustainability.    
We do not inherit the earth from our ancestors, we do borrow it from our children, so what will our seventh generations say about our generations corporate stance on sustainability?

-- Colin Anton

Colin Anton is a Certified Human Resources Professional (CHRP) working in the Canadian Oil & Gas sector.  He has been working as a CHRP for over 7 years having  recently held a position with Nexen prior to his current employer.  Colin has recently earned his Master's in Business Administration from the University of Phoenix.

[1] United Nations. (1987), Our common future, Report of the World Commission on Environment and Development. (the Brundtland Commission): Oxford, Oxford University Press, p. 383.

[2] Next Generation. (2010). Corporate Responsibility, Corporate Citizenship, Corporate Sustainability, Sustainability Reporting 2009. Retrieved from http://www.nextgeneration.co.za/articles.php 

[3] Figure 1: http://www.nextgeneration.co.za/articles.php Corporate Responsibility, Corporate Citizenship, Corporate Sustainability, Sustainability Reporting 2009

[4] Management And Excellence. (2010), World’s Environmentally Most Sustainable 10 Largest Oil/Gas Companies of 2009”, Retrieved from http://www.management-rating.com/index.php?lng=en&cmd=210

[5] Climate Change Corp., (2008). Oil sands – Shell’s sustainability gamble. Retrieved from http://www.climatechangecorp.com/content.asp?ContentID=5936


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