HOST201 Group Case Study Analysis Online Tutoring

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.

 

[hbupro_banner id=”6296″]

 

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:

  1. Net Zero Operations
  2. Net Zero Oil & Gas
  3. Halving Intensity
  4. Reducing Methane
  5. More Dollars for New energies
  6. Five aims to help the world meet net zero:
  7. Advocating for progressive climate policies
  8. Incentivizing Employees
  9. Aligning Associations
  10. Transparency Leader
  11. Clean Cities[8]

REDUCE, IMPROVE CREATE FRAMEWORK

BP’s commitment to advance a low carbon future is informed by its ‘reduce, improve, create’ (RIC) framework. This focuses on reducing greenhouse gas emissions in its own operations, improving the products by providing lower emission gas for power generation; developing more efficient and lower carbon fuels, lubricants and petrochemicals; and growing low carbon offers to help customers lower their emissions, and creating low carbon businesses that support the energy transition.[9]

Supporting a circular economy:

In the quest for a substantial improvement in resource performance across the economy, businesses have started to explore ways to reuse products or their components and restore more of their precious material, energy and labor inputs.[10] BP intends to contribute to this through the way it uses resources in its businesses and by shifting the mindset to design and operate with circularity in mind. For example, Downstream is working with Virent and Johnson Matthey to advance a bio forming process for the production of bio-paraxylene, a key raw material for renewable plastics. [11]

Social & Communal Sustainability

Energy with purpose means using the experience, expertise, reach and relationships to improve lives.

BP’s Approach:

  • Recruit and support talented people from diverse backgrounds
  • Invest in training, development and competitive rewards for all the employees
  • Engage with local communities to manage the impacts of business operations
  • Work with communities to identify opportunities for them to benefit from BP’s activities
  • Invest in local initiatives, focusing on economic development, education, the environment and engagement with culture or arts. [12]
[hbupro_banner id=”6299″]

 

Social Investment & Community engagement:

BP makes targeted social investments that contribute to sustainable development. BP engages with local communities to help prevent or reduce the risks and impacts of its operations, in ways that can directly benefit them.

Human rights:

BP is committed to human rights policy and code of conduct, and the operating management system which contains guidance on respecting the rights of workers and community members. Human rights focus areas include labor rights, security and human rights, rights of people in communities.[13]

WORKFORCE DIVERSITY & INCLUSION:

BP aims to create a diverse and inclusive workplace environment, where employees are accepted, valued and treated fairly without discrimination. The efforts to create such a culture lies in addressing the gender balance, equal pay, respecting ethnicities, orientations and disabilities.[14]

Support UN SDG’s

The way BP works support the implementation of some of the UN sustainable development goals in countries where it has a presence. BP contributes to these through its safety, environment, human rights, community, diversity and inclusion and responsible and ethical business practices.

  1. Good health and wellbeing: BP support public health programmes including efforts to combat malaria and improve safety for women giving birth.
  2. Clean water and sanitation: BP invest in sustainable development projects that align with local needs, including water supply infrastructure in Mauritania.
  3. Industry, innovation and infrastructure: BP Ventures is focused on exploring new opportunities with the potential to help deliver the energy transition.
  4. Responsible production and consumption: BP scans and assess environmental and social status and impacts before starting major projects.
  5. Life below water: BP’s marine mammal and sea turtle programmes aids in planning activities, and in avoiding the most sensitive areas.
  6. Life on land: BP is working with IPIECA on developing industry good-practice guidance on the new post-2020 global biodiversity framework for the sector.
  7. Partnerships for the goals: BP is working with peers to create an oil and gas industry platform for supplier human rights assessments.
  8. Affordable and clean energy: BP is investing at least $500 million a year to support low carbon activities, including the renewables businesses and acquisitions.
  9. Decent work and economic growth: BP support employee-run business resource groups, including those for ethnicity, gender, sexual orientation, parenting and disability.
  10. Climate action: BP has set a new ambition to become a net zero company by 2050, and to help the world get to net zero.[15]

Conclusion

Energy markets are changing, driven by climate change, technology and societal expectations. In light of the incidents that occurred in the past and the Paris agreement, BP set ambition for net zero by 2050, fundamentally changing organization to reimagine energy. In order to achieve this ambition, BP set ten aims that commits it to integrate sustainability into the company’s day-to-day operations.

BP’s approach to sustainability involves three focus areas and the issues prioritized in its materiality process. The focus areas include climate change and the energy transition, safety and value to the society. The business strategy that drives the sustainable business activities include doing business responsibly which is carried out by helping improve lives of the company’s stakeholders, mitigating harmful impacts on the environment and keeping business ethics in check. Good governance and transparency in reporting are the foundations for BP’s sustainability practices upon which everything else is laid.

BP’s performance in 2019, its contribution to the UN Sustainable Development goals, it’s coalition and association with different organizations as well as the government suggest it continuously tries to be in line with the sustainable business practices. It reviews and monitors performance against its strategy and low carbon ambitions and confirms that the processes for identifying and managing key risks, are in place

Bibliography

Blau, J. (2017). The Paris Agreement: climate change, solidarity, and human rights. Springer.

Blau, J. (2017). The Paris Agreement: climate change, solidarity, and human rights. Springer.

  1. (2019). BP Annual Report and Form 20-F .
  2. (2019). BP Sustainability Report.
  3. (2020). BP. Retrieved from https://www.bp.com/

Diversity Journal. (2015, January). Retrieved from https://diversityjournal.com/14456-bp-cultivating-diverse-relationships/

Levy, J. K., & Gopalakrishnan, C. (2010). Promoting Ecological Sustainability and Community Resilience in the US Gulf Coast after the 2010 Deepwater Horizon Oil Spill. Journal of Natural Resources Policy Research, 297-315.

MacArthur, E. (2013). Towards the circular economy. Journal of Industrial Ecology, 23-44.

Watts, J. (2020, February Wednesday). BP’s statement on reaching net zero by 2050 – what it says and what it means.

Watts, J. (2020, February Wednesday). BP’s statement on reaching net zero by 2050 – what it says and what it means.

 

[citationic]