Employees

-The women are given more opportunities to work for BP, so there is less discrimination in the workforce. -Leadership training so that the employees can develop their skills -10 year development plans (each plan identifies the training, job experiences and assessments that employees will need over the short term and long term) -Employees are protected from abuse/harassment as they work with Centre for Prevention of Hate Violence -Diverse workforce, not discriminated in any way (gender, disability wise) Costs -Strict regulations (i.e. no tolerance for inappropriate behaviour) -Training costs as well as the 10 year development plan (time-consuming and there is an opportunity cost)

Business -Operational cost reductions from improved energy efficiency (InnerCool) Costs -The amount of money that is required for BP to invest into socially responsible activities

Government -As BP documented its CSR for its stakeholders, the government does not have to initiate corrective action to ensure a sustainable environment for the future.

BPs Stakeholders

The Environment -Research and development into renewable resources such as wind and solar. -InnerCool makes solar cells more efficient (increases energy generation by 3%) -Further implementation of InnerCool by 2011 Costs -Up front research and development costs

Local Communities
-Regular talks means that they know what BP are doing and also publishing newsletters for local households. -In Alaska, a designated staff member facilitates engagement between company staff and communities and runs a variety of activities during the year. -In the Gulf of Mexico, BP worked among these communities and they have made investments to help the region recover and have committed to meet all legitimate claims for both individuals and businesses.

Pressure groups -Their views are acknowledged by BP, they have a joint approach to green issues (less conflict). -40% cut in greenhouse gases in 2020.


Do the benefits outweigh the cost?

For BP, it is clear that the benefits of them investing in CSR outweigh the cost in the long term, i.e. the development of InnerCool enables the business to cut its costs in the long term whereas in the short term, financially it costs them around $5 billion which shows that there is an opportunity cost for them spending the money on local communities that may need the money.

One of BP s objectives is to create value for shareholders and potential investors by investing to deliver growth in our Exploration and Production business together with enhanced efficiency and high-quality earnings and returns throughout our operations From this objective, instantly there is a conflict with the shareholder and stakeholders, to be socially responsible BP has to spend money on activities, this means that their profits will not be maximised which is the shareholder s objective and whereas a stakeholder like environmentalist groups want investment into sustainable sources of energy

To produce energy in a way that doesn t damage the environment From this, it is obvious that BP takes the environment seriously in order to make it a corporate objective. However, this is not a SMART objective so it is not really possible to tell whether they have achieved it. Either way producing energy would damage the environment in different ways for example wind power creates noise pollution

BP has divided their CSR objectives into 4 parts: Exploration and production Refining and Marketing Alternative Energy Gulf Cost Restoration Organisation

Refining and marketing

Gulf Coast Restoration Organisation This was added to their strategy after the oil spill in July 2010, their strategy is to provide the necessary leadership and dedicated resources to ensure BP meets its commitment to fulfil its clean-up responsibilities and to support the long-term effort to restore the Gulf Coast.

The importance of Corporate Social responsibility relative to other corporate objectives

Their objective is to improve their performance by focusing on achieving safe, reliable and compliant operations, restoring missing revenues and delivering sustainable competitive returns and cash flows.

Alternative Energy
Exploration and Production Their strategy is to grow long term value by continuing to build a portfolio of enduring positions in the world s key hydrocarbon basins, focused on deepwater, gas and giant fields.

Their focus is on low-carbon businesses and future growth options that we believe have the potential to be a material source of low-carbon energy and are aligned with BP s core capabilities.

To what extent do you think BP s objectives relating to corporate social responsibility should have an impact over other corporate objectives? BP s objectives are not clearly shown in their corporate website, so it is difficult to say whether BP objectives relating to CSR has an impact on other corporate objectives. From their sustainability report 2010, it clearly shows that they are developing strategies related to CSR, however, these objectives are not SMART which shows that these strategies are not measurable and not possible to tell if they have achieved it. As BP is in a market where it concerns the environment the most, they should implement CSR objectives to their corporate objectives as we are living in a world where consumers are concerned about the impact oil has to the environment and are seeking way in which to be more sustainable in the long term.

Consumers Government and Legislation The government implemented laws such as Resource Management Act (1991) which was to ensure that anyone making use of natural and physical resources does so with regard to the well-being of the environment and society needs in the future. This legislation means that BP would have to be more socially responsible in what they do in terms of the resources. Since BP is in an environment where they have to use natural resources to gain revenue, they will have more to consider when looking for resources such as oil and water. Employees From their 2010 report, it said BP s sustainability as a company depends on the skills, commitment and behaviours of our employees in every country where we operate . From this, it should that employees are highly important to BP and are taking more responsibilities for their employees. They became responsible for their employees by increasing the diversity of the workforce and introducing more women in leadership teams. Consumer s opinions are important to profits and growth. In the business world customers are becoming more powerful, particularly during the Gulf of Mexico there has been numerous protests. In Hull, a teacher brought a protest in front of BP s gas station. This has been the case online as well with Facebook campaigns to Boycott BP . This has led to BP carrying out a cleaning operation to restore the Gulf of Mexico both the environment and the economy. $100 million was the amount allocated by BP to compensate those put out of work as a results of the spill.

Shareholders Some investors main concern is profit maximisation, and thus getting high returns from their investment. Some investors are looking for businesses to invest in particularly ethical businesses as it may add value to their brand. Being an ethical business could add prospects to the business by potential investors. Shareholders are one of the most important people to BP as their money has been invested into BP.

The influences determining which responsibilities are accepted by BP and which are not

Communities This relates to the oil spills that have happened over the past few years. As numerous communities have been destroyed due to the recklessness of BP, communities livelihoods have been destroyed, this shows that this has an influence on BP s responsibility to take care of the community and also numerous protests have taken place because BP are planning to drill there again in the Gulf of Mexico.

Conclusion: The fact is, that business organisations are more likely to adopt CSR in those areas that are close to the interest of the most powerful stakeholder (as shown in the matrix above). The weakest stakeholder is most probably communities, this is because, despite having high level of interest in BP, they have little power into influencing BP in what they do. For example, protests regarding oil spills and the Boycott BP groups has not have had any effect on BP in any way. By contrast, the shareholders have the one of the strongest influence in which responsibilities are accepted by BP and which are not, they have the right to vote at AGM to remove, appoint directs and on other major issues. For example in June 2010, shareholders wanted Svanberg to be the fall guy during the oil spill. This shows that shareholders have the biggest influence on BP s responsibilities