Approach to Sustainability Group Case Study Analysis
Executive Summary
This report is intended to analyze and evaluate the global oil and gas company, BP Private Ltd.’s approach to sustainability. The objective of the report is to study the company’s history, it’s transition and its efforts in mitigating the negative impacts of its business activities on the planet and the people, with a discussion on how these influences has and will affect BP’s strategic business in future. The report further discusses how the company’s business strategy and purpose drive sustainable activities in terms of environmental, social and economical aspects.
The case study begins with an introduction to the company followed by the BP’s business strategy that help direct the company goals, procedures and business activities. An analysis of the company’s sustainability approach is closely observed and discussed in detail to present the findings and suggest if sustainability is woven in the company’s business fabric.
Finally, a summary is provided in light of the findings and analyses of the past and the current state of the company as well as future implications that are based on company’s annual report, sustainability report and energy outlook.
Introduction to The Company
BP, The British Petroleum Company Limited is a multinational oil and gas company, headquartered in London, UK. BP delivers heat, light and mobility products and services to people all around the world. The company has a diverse portfolio across businesses, resource types and geographies. The company’s geographic reach gives it the access to growing markets and new resources, as well as diversifying exposure to geopolitical events. Total economic value generated by BP is $283.3bn. [1]
BP’s Business Strategy
After a major branding campaign for rebuilding the brand’s imagery which was compromised in the aftermath of Deep Horizon explosion and oil spill in 2010[2], the company set out a strategy in 2017, allowing it to be competitive, flexible and resilient while also responding to a rapidly changing energy landscape, with growing expectations to adapt to changing demands from stakeholders. The strategy includes:
- Growing advantaged oil and gas in the upstream
- Market-led growth in the downstream
- Venturing and low carbon across multiple fronts
- Modernizing the whole group[3]
This has helped to create a strong foundation for BP to advance its low carbon agenda.
Sustainability for BP
A sustainable approach to business is inherent in BP’s purpose – reimagining energy for people and the planet. The business strategy commits BP to integrate sustainability into the company’s day-to-day operations by being a safe, focused, responsible, well-governed and transparent organization.
Approach to Sustainability
The focus areas:
- Climate change and the energy transition
- Safety
- Our value to society
Doing business responsibly:
- People
- Environment
- Business ethics
Foundations:
- Good governance and transparency in reporting[4]
Environmental & Economical Sustainability
Energy with purpose means valuing and protecting the planet’s natural resources, this means supporting long-term economic growth without negatively impacting environmental, aspects of the planet.
BP’s Approach:
- To advance a low carbon future by working across the whole of BP. This includes BP’s reduce, improve, create, framework.
- Aim to avoid, minimize and mitigate any adverse impacts
- Respect the local environment and the communities that depend on it for resources to support their livelihoods[5]
BP’s Role in The Energy Transition:
The world needs a rapid transition to net zero to meet the goals of the 2015 Paris Agreement[6]. BP’s role in this transition is to provide reliable, affordable and cleaner energy for people and our planet.
Net Zero by 2050:
As per the new ambition and aims that were set out in February 2020, BP’s purpose is reimagining energy for people and the planet. Helping the world reach net zero and improve people’s lives. This mean tackling around 415 million tons of emissions – 55 million from its operations and 360 million tons from the carbon content of the upstream oil and gas production. Importantly, these are absolute reductions, to net zero, which is what the world needs most of all. [7]
In order to achieve this aim, BP has set out 10 aims, which together set out a path that is consistent with the Paris goals.
Five aims to become a net zero company:
- Net Zero Operations
- Net Zero Oil & Gas
- Halving Intensity
- Reducing Methane
- More Dollars for New energies
- Five aims to help the world meet net zero:
- Advocating for progressive climate policies
- Incentivizing Employees
- Aligning Associations
- Transparency Leader
- Clean Cities[8]
