Corporate Social Responsibility Initiatives and Reporting of BP Australia
BP Australia is one of those companies that puts great emphasis on the green initiative and believes that the key issues that are related to the stakeholders need to be disclosed. They have done a massive rebranding exercise in the year 2000 which was worth 135 million pounds and came with a brilliant “Beyond petroleum” slogan. BP Australia is transparent in terms of the Corporate Social Responsibility reporting initiatives and they have made it public in their website about their Corporate Social Responsibility initiatives, ethical conduct that is expected out of their employees and what they intend to give it back to the society. They follow a decentralized legitimacy theory, in the sense that they design their initiatives that is suited to the culture of the incumbent nation that they are in rather than the ones that is designed to suit their host nation. In multiple public disclosures, they have made it clear that the Corporate Social Responsibility initiatives that they would take in the country would be keeping in mind the stakeholders of the nation as well as the ones in the host nation. One should say that they have struck a balance between both these as they have been protecting the benefits of the stakeholders back home and at the same time they project themselves as a company that go beyond just being a petroleum company and work for the benefit of the nation. They also have an efficient internal communication system to communicate and implement the initiatives to the internal stakeholders by means of intranet and have a strong management commitment to ensure that these Corporate Social Responsibility initiatives are taken up with utmost importance (Bhattacharaya, 2009). Post 2000, it is seen that BP Australia is one of the key players in ensuring that more and more companies started looking at implementing Corporate Social Responsibility activities and more importantly reporting them for the benefit of the public at large. There is an executive committee at BP that decides on the Corporate Social Responsibility initiatives that they would be involved in and at the same time, frames the comprehensive plan for each of the 150 business units. One of the most differentiating factors of the Corporate Social Responsibility initiatives of BP is that the employees are made responsible for their actions and are expected to fulfil these Corporate Social Responsibility goals as a part of their overall performance goals. BP Australia commits itself to become one of the global companies that are powered by performance and at the same time ensure that they give it back to the society for facilitating their growth. This is evident in all of their corporate communication where BP aims at becoming a” profitable company backed by performance and deliver back to the society by means of those initiatives of high quality”. BP Australia. To achieve this congruence of the company performance and stakeholder welfare BP has made sure that they get all their partners involved in the whole Corporate Social Responsibility initiative (Arrow, 2009).
BP Australia ensures that they maintain the highest integrity and transparency at work and the management is serious about the impacts about their presence in foreign nations and the people who are directly affected by them. The BP management ensures that all the stakeholders are positively impacted by their presence and in the last one decade has worked towards eliminating the negatives impacts that the businesses have on the people who live in the immediate vicinity of their plants. Other than activities that affect the businesses directly, BP Australia is also working towards other social goals that would help them project themselves as a responsible organization. What this has done to them is that, it has ensured that BP is looked upon as a global leader in its own industry in true sense not only in terms of the financial performance and the stability that they have obtained over the years but also as an organization that is giving back to the society that they are in. In this age when the big corporations are being accused of being pro rich by means of their actions, BP Australia is trying to be different by ensuring that they help the region ion which they are operating benefit from their presence by ensuring growth and more employment opportunities for the people (Griffin, 2008). They have been very good at monitoring their Corporate Social Responsibility initiatives by means of social health assessments that is being done at the corporate level to assess the impact of the Corporate Social Responsibility activities that they have carried out in the recent past and the executive council of the company issues corrective steps and future course of actions for the organization in bettering the activities to ensure that they have a direct impact on the immediate environment that they are working in. One of the main advantages that BP has over many other smaller companies is that they can afford to adhere to stricter rules and enforce transparency within the organization; also they will have the leverage to engage in activities other than those that are directly related to their core business that may benefit the stakeholders of the incumbent nation. They also reap the dividends of their actions by means of favourable government policies, better relationships with the stakeholders and a friendly environment that is conducive carrying out their operations in a smooth and seamless manner. One of the most important elements in any Corporate Social Responsibility initiative is the establishments of rules within the organization which is based on the ethical conduct and build a system that would ensure that the rules that are made within the organization is being followed within the organization. BP takes a pragmatic approach towards this whole issue and has developed a set of ethical guidelines which enable the employees to work within a set of rules that goes well with the company’s objectives and at the same time it also lists out various practices that are not acceptable within the organization thus drawing a clear line of demarcation for its employees. BP also commits itself to conduct its business operations in such a manner that it would respect the culture and the people of the countries that they operate in and the employees are expected to behave in that manner. Ass mentioned earlier, the business policy decisions and the Corporate Social Responsibility activities are decided by the local executive council in consultation with the main executive board (Sethi, 2003). This has benefitted BP in many ways as the Corporate Social Responsibility initiatives that they have undertaken in Australia is benefitting both the company at a large because of the conducive environment and better business partnerships within Australia and at the same time the stakeholders of the host nation is also benefitted from the Corporate Social Responsibility initiatives as they are directly beneficial to them and is not skewed towards giving larger benefits to the cardinal stakeholders of the organization (Boeger et al, 2009). On the Corporate Social Responsibility part of it, BP comes clean with a set of strong rules that ensures that the important information on how the money is being is spent on various Corporate Social Responsibility initiatives taken up by the company is put in front of the stakeholders and also at the same time they conduct a review from time to time to ensure that the activities that they undertake are relevant and beneficial to the stakeholder by means of various assessment tools (Visser et al, 2006). They report their Corporate Social Responsibility activities to many reporting organizations like AccountAbility that gives them the feedback on their Corporate Social Responsibility initiatives and at the same time this has resulted in them being strict on even those issues like offshore payments and bribery which is not strictly regulated in the international market. The same applies to the contribution made to the political organizations, BP rule book states that they don’t make any large contributions to any political organization and the contributions that they make to the political parties are such that they would not influence the business environment creating an unfair competitive environment (Jenkins et al, 2002).
The basic philosophy that they follow in an incumbent nation has made BP a clear winner in terms of the CSR activities. They target at getting in those investments that are beneficial and would develop the local communities and infrastructure. BP has made it very clear in their various statements that they would be making any new investments only if it is impactful to the people who are directly related to the organization and the ones who would be impacted by their presence in a particular geography. Another major differentiator between BP and other companies is that they have made this very clear to its partners also that they will have to fall in line with the business ethical conduct that is followed by BP (Mayet al, 2007). This would ensure that the activities that both BP and its partners undertake are in sync and there is a whole lot of synergy in the relationship. One thing that is to be noted here is that the BP can command the respect of its partners and can ask them to fall in line given the brand reputation that they have built and the scale at which they are growing which may not be possible for smaller organizations. The business partners off BP would also be willing to partner with them on these CSR initiatives as it would give them the extra mileage and piggyback on BP’s reputation to build one of them (McIntosh et al, 2004).
One must say that BP has come a long way in terms of CSR reporting and the various activities that they carry out from the time they have come up with their revised guidelines and rebranding exercise in 2000. They have been able to strike a clear balance between the typical rule based approach and a more generic culture based approach that enables them to be flexible enough to measure, monitor and mould their CSR activities in such a manner that it is both beneficial to the company from the financial perspective and at the same time to the stakeholders who are directly influenced by their presence (Werther et al, 2006).
CSR initiatives and reporting of Rio Tinto Australia
Rio Tinto aims to become of the leading industrial powerhouses within Australia. They have made a mark for themselves by delivering strong financial performance for their stakeholders year after year. The organization is committed to create an impact on the set of stakeholders who are directly impacted by their operations and lays down a list of guidelines that would be benefit the stakeholders at large. One of the main differentiating factors of Rio Tinto is that they have a strong organizational and institutional set up that helps them to implement the CSR activities that they have planned to be implemented effectively. The management philosophy at Rio Tinto aims at bringing positive change in the lives of the people who are associated with it. This approach becomes all the more relevant in those times when there are allegations against the very existence of the mining companies and accusations that they have just profit motives while running their business (Cheruniam,, 2001).
Management at Rio Tinto has come with a policy framework that looks beyond their regular activities to support the people who are impacted by their presence. They have ensured that they address those key issues that affect the lives of the people negatively in terms of environmental impact (Gray & Bebbington, 2001). Rio Tinto has been regularly coming out with their press releases and statements on clearing their stance on how they wish to contribute to the society at large. They have a set of strict guidelines that ensures their operations are not harming the environment that they are in. This is very important for them as a company that is operating in the energy sector as it would affect the licenses and the government approvals in operating within the region if the environmental clearances are not taken care of (Zakhem et al, 2007). Rio Tinto aims at maximizing the societal gains by translating the business processes into economic engines that powers the growth of the local economy. Even though the company policies are largely suited for its global operations, the local management has the authority to mend it in such a manner that it is customized to the local needs (Stiglitz, 2005). They have been actively reporting their CSR initiatives and even come up with ideas like getting the stakeholders involved in designing the activities that they are planning for the region. Any operation is not successful unless and until you measure the impact that it has on the set of people who would be directly impacted by these activities. Third party agency audits are conducted to check if the CSR activities that they have been doing is worthwhile and at the same time the investment that goes into these activities are also monitored to measure whether the investments are bring any direct impact in the lives of the stakeholders. This institutionalization has helped the company come up with strong policies that guides the employees in making these activities as a part of their regular job routine rather than carrying out them separately (Chandra, 1998)
Rio Tinto uses the materiality approach to report the CSR activities that they are involved in and this makes it more transparent to all the important parties concerned. This method ensures that they can prioritize the processes that are important to their businesses and at the same time ensure that the systems continually evolve to reduce the impact on the environment. These reports are published for the stakeholders annually (Ackerman, 2003). This reporting process is in line with the global reporting standards set by Global reporting initiative. All the organizations activities are designed in such a manner that it has minimal impact on the environment and societal surroundings and by following this practice Rio Tinto ensures that they contribute to the development of economy and the society at large. The management takes a short term and long term view of things while planning the CSR activities. They have a three year operating plan taking into consideration the current economic setup. The three year plan of Rio Tinto is comprehensive in the sense that it involves a wide participation of all the major stakeholders who are affected by the organization. By gathering the thoughts from the external stakeholders, the company tries to match it with the internal policies to determine if it requires any changes and suitable changes are being made in the policies that would be followed by means of an institution that would monitor and measure the effect of these changes. The annual reporting system is followed by a course correction by the organization that would try to understand the areas where they have fallen short and the improvements that they will have to make in different field. This feedback mechanism ensures that the onuses of these CSR initiatives are passed on to the employees and other stakeholders rather than the top management going ahead with some predefined policies.
Rio Tinto focuses on safety of the employees as they are key to the success of the organization in the long run. Management has taken a holistic approach in ensuring the safety of the employees as they look at reduction of the injuries within the plant, elimination of the risk within the working environment and contingency management in case of any crisis (Crowther & Capaldi, 2008). They have made an institutional structure where in there are safety champions who would take care of the risk factors and the employees are expected to follow the guidelines that are set by the organization. The company is actively propagating the safety agenda to all the department’s thus make it a part of the work culture to take care of one’s own safety as well those of their colleagues. They have also identified areas of high risk or high consequence risks and made contingency plans to tackle the situation in case something untoward happens.
Rio Tinto Australia is also working actively in engaging various communities in their business by gathering economic and social insights and identifying the potential impacts and risks that are there associated with each of these communities. They have charted out a plan in order to engage with these communities by means of agreements and collaborations that are beneficial to both the parties. They aim to provide educational, employment and other contract options to these communities that would be beneficial for these communities and at the same time engaging with these communities would give them the good will that is essential for the brand building. One of the unique strategies that they have come up with is to engage with the aborigines in Australia by means of creating opportunities for aborigines within the company and make them an apart of the mainstream by creating cultural awareness about them within the organization (Crane, A. et al, 2008).
Rio Tinto considers employee as key assets to their growth and hence to engage better with the employees and to make them feel special within the organization, they carry out various programs that promote employee safety and health (Cheruniam, 2001). There is a separate panel that would look at the health risks associated with the work and would make system improvements to minimize them to the minimum levels possible. They are also committed to working with the employees in eradicating other health risks and diseases that are not related to work such as HIV, malaria etc. the activities that they carry out include the health assessment of the employees to identify any work place related health risks in them and to treat them at an early stage in case of any detection. They are also moving into a model of complete management of the systems to ensure that the health risks at the work place are reduced to the minimum possible extent (Bakan, 2004).
Going by the employee centric policy, Rio Tinto is investing on the workforce extensively. They focus on quality leadership and there are quality champions who would be championing the quality cause at every department. Different online forums are set up within the organization to ensure that the knowledge is shared among groups and the common problems are being discussed. This has actually reduced a lot of duplication at work and they have managed to improve the productivity by almost 7% in the past one year. The employees are given the opportunities to work with cross functional teams that would enable them to enhance the skills and at the same time the organization is looking at having a diverse work culture by getting in people from different backgrounds to work together.
They have also been a part of UN Millennium development goals and all these CSR activities are being reported to global agencies so that the stakeholders can take a look at them as and when the need (Android, 2003). The company is committed to working for the progress of all those who are involved in the same and hence going by the company motto of getting everyone along for the sake of the development of the business and personal development of one and all who are associated with the organization has ensured that they are all set to become one of the global leaders both in terms of the business volumes and also on the welfare provided to all the stake holders involved.
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