Exxon Mobile/ Social Responsibility

Exxon MobilExxon Mobil is listed as one of the world’s largest fortune 500 companies according to Fortune Magazine, 2006. Because of its size, I became interested in this company for my research paper on corporate social responsibility.

Exxon Mobile has a rich history that dates back to 1859. It all started when two individuals drilled an oil well in Pennsylvania. In 1870, Rockefeller and his associates formed the Standard Oil Company. Many businessmen, such as Thomas Edison and the Wright Brothers began to depend on oil for their inventions. In 1926, Standard Oil Company changed its name to Esso. In 1959, the company developed a famous slogan “put a tiger in your tank.” In 1972, the company changes its name to the Exxon Corporation (www.exxonmobil.com).

On March 24 1989, the tanker Exxon Valdez runs aground in Prince Williams sound, Alaska. This was a tragic accident that the company deeply regrets. It all began when the Valdez was traveling towards California when it hit a coral reef. As a result, of this accident, significant quantities of oil began to seep into the waters.

According to most, the action to contain the spill was slow. As a result, the media blamed Exxon for not responding fast enough to the crises. Many of the wildlife including birds, fish and other mammals were killed because of Exxon’s slow response to the spill. This spill became the llargest spill ever in U.S waters. The company unfortunately had to pay an estimated amount of$2.1 billion dollars in clean up operations for the spill (Business Ethics, Exxon Valdez pages 396-405).

After the Valdez incident Exxon Mobil realized that something had to be done if they were to shine in the publics eyes once again. They realized that they had to take on the worlds toughest energy challenges and develop a mindset of corporate citizenship. The term “corporate citizenship” according to dictionary.com can be defined as:

The extent to which businesses are socially responsible in meeting legal, ethical and economic responsibilities placed on them by shareholders. The aim to create a higher standard of living and quality of life in the community in which it operates, while preserving the profitability of the company for it’s stakeholders both within and outside the company. The 6 areas of corporate citizenship Exxon chose include: education, health, community development, environment, safety and worldwide giving. Exxon Mobil believes that the key to progress is education. When it comes to the communities they operate in they strive to be a responsible partner.

In the area of education, their most important subjects are Math and Science. These subjects play an important role in the energy business. Exxon has a variety of higher education programs to encourage minorities and women to pursue degrees in these subjects. They also host a summer job program for college students which consists of an 8 week paid internship where the student s participate in non-profit work. (exxonmobile.com)Another corporate citizenship program that Exxon Mobil offers is the Green Team.

This is an employment program for youths where jobs range form constructionprojects to environmental projects for economically depressed neighborhoods and public parks. (CSR report)When it comes to health, Exxon Mobile believes that good health is a good path toward development, opportunity and achievement. They also support programs concerning worldwide health issues. They began the African Health Initiative in 2000 where their goals were to fight the spreading of Malaria.

The company spent over 40 million dollars with this project.(CSR Report)Another campaign they started is called “Stop AIDS”. The goals of this campaign were to keep their employees and contractors safe from the AIDS virus. And, to educate HIV positive workers how to live safely with this illness. (CSR Report)Exxon’s idea of community development is to gain mutual trust and respect of the partnerships they create.

This is an important aspect of corporate citizenship. Some of the other things that Exxon does involves participation in human rights and capacity building. They promote respect for human rights in the communities in which they operate. They promote economic and social development by providing people with the knowledge and skills necessary to do so. (CSR report)Save The Tiger Fund was started as a partnership with the National Fish and Wildlife Foundation. The main purpose of these fund is to address the threats that tigers are facing and to promote tiger conservation by educating the “next generation”.

Exxon support the Leuser Ecosystem which is located in Indonesia. This foundation helps preserve the most biologically diverse ecosystem in the world. When it comes to safetytheir motto is “Nobody Gets Hurt.” This motto provides for an incidentfree workplace. To further assist in the safety of their employees and contractors, they have safety teams and safety surveys to address this issue.

They also have emergency response teams on all major sites that are specially trained in spills, fires, explosions as well as other things that could endanger their employees and contractors. (CSR report)Worldwide giving is very important to the Exxon company, they support worldwide programs in health, education and biodiversity. They donate cash goods and services to communities all around the globe. The examples that I have given above demonstrate how Exxon Mobile is serious about its corporate citizenship. (CSR report)The Exxon company is a 125 year old company that started out as a regional marketer of kerosene.

They are the world’s largest publicly traded international oil and gas company. Their brands around the world include Exxon, Esso, and Mobil. Exxon Mobil is a leader in many aspects of business. They market there products in many countries around the world, they are also exploring in six continents for natural gas and oil. They have 50 facilities in which they operate in the petrochemical operations which makes them the leader in the petrochemical industry. They are also one of the industries leaders in research development which helps them enhance their performance. (Exxonmobile.comI believe that my research has demonstrated that Exxon Mobil has shown a commitment corporate responsibility. Exxon integrates citizenships into their business practices and processes.

They operate ethically and responsibly. They ingrain these practices in their businessculture and their standards of business conduct. Exxon Mobil’s business model include legal compliance, standards of integrity, governance practices and management control. These practices help them to ensure good corporate citizenship. Rex W. Tillerson, Chairmen and CEO states ” we are proud of our record of corporate citizenship, and look forward to building upon this record of accomplishment in the future.” This quote was taken form the 2006 Corporate Citizen report of the Exxon Mobil Corporation.

I believe that what the chairman states is true, because I do believe they shown good corporate citizenship. In this report Exxon Mobil states that they have a responsibility to society. And, that responsibility is to provide energy in a economical, environmental and social responsible mannerto people all over the world.

Exxon regularly meets with community leaders and associations to incorporate community mindfulness in the environment in which they do business. Meeting with such groups is beneficial for exchanging information between the company and the community. The types of information that is exchanged has included such topics as; climate change, operating in environmentally sensitive areas, labor rights, security and human rights issues.

Environmentally the company has lowered the amounts of: oil spills and emissions reduction. In the workplace they are an industry leader in health and safety issues and has lowered accident reports. Challenges for the company include continuing to improve energy efficiency, eliminating injuries and fatalities form the workplace, continuing to deliver superior returns across the business lines, meeting the demands of their shareholders, participating in civil society and governments, maintaining the safety and security of operations worldwide, working with differing regulatory and legal requirement in other countries.

(Fortune)Future energy trends certainly add to Exxon’s toughest energy challenges. The economic of people around the world is driving a growing need for energy supplies. Our human population is forever increasing and supporting society with it’s energy need is a daily struggle.

Alternatives to fossil fuels is critical which is why Exxon funds education in the arenas of Math and Science. The challenge of keeping energy affordable is also a major issue for the company. The economic growth and improvement in other countries are also adding to the heavy demand for energy. Exxon is committed to the exploration of energy alternatives, Exxon wants to be mindful of our Earths energy and therefore more committed to being socially responsible.

In the 2006 issue of Fortune Magazine, Fortune reported that oil companies, like Exxon have had a record breaking year in profits. Exxon’s profit in 2006 was 36.1 billion. CEO Rex Tillerson had what some call a “showdown” with the Senate Judiciary Committee which I felt was a unspoken attack on Exxon. They want to know why gas prices are so high when Exxon was making so much money? Crude Oil is topping out at $100 a barrel and does not seem to be going down in the future. Since the price of oil rose so quickly it was hard for Exxon to raise the price so much before protests broke out. The fact that they were not able to raise the price as fast as oil went up caused a decline in refining margins, the profit on refinery operations.(Forbes)

Everyone is attacking Exxon Mobil because they are the biggest company of all the ones in its business, but it is not like they are the only ones reaping the benefits of raising oil prices. Companies such as Royal Dutch saw profits raise 68 percent and BP saw a 34 percent raise in profits as well. There is nothing that Exxon can really do about the rising price of oil, they are just doing what they have to do to make a profit. Exxon also produces the most oil and gas per barrel out of any non government energy corporation in the world. So it only makes sense thatthey turn the biggest profit, the most oil production comes from North America while the most gas production comes from Europe.

As Tillerson said of George W. Bush’s speech about us being addicted to oil, “It’s an unfortunate choice of words, quite frankly. Oil and natural gas have been the enablers of economic growth in this country. And to say that your addicted to oil and naturals seems to me to say your addicted to economic prosperity.” So I think that Exxon is handling the situation correctly and doing what they have to do to continue to be socially responsible. (Fortune)In conclusion, I learned a lot about the Exxon Mobil company and their corporate citizenship policies. It was interesting to learn how the company operates globally and how strongly they believe in their corporate social responsibility obligations.

I guess it’s politically correct these days for companies to take on this kind of thinking. Just look at all the profits that Exxon makes in just one quarter. One could agree from my research it pays to be socially responsible!It was unfortunate for Exxon to have an oil spill, but they got past it, emerged as one of the worlds leadings oil and natural gas producers in the world. Hopefully, other companies will follow Exxon’s example and on how to overcome negative publicity and go on to becoming a leader in the industry that practices corporate social responsibility.

Bibliography1.Corporate Citizenship Report. Virginia: Elizabeth Beauvais.

2.Goodpastor, Kenneth. Nash, Laura. de Bettignies, Henri-Claude. BusinessEthics: policies and persons 4th edition. Mcgraw Hill Irwin Publishers. Pages 396-4053.Nelson d.Schwartz. “Fortune” April 2006: Pages 78-884.Daniel Fischer. “Forbes” April 2006: Page 425. ExxonMobile.Com. http://www.exxonmobil.com/corporate/community6. Dictionary.com. http://dictionary.referance.com/browse