Now a day’s most of the companies are taking the sustainability matter very seriously and are trying to increase their probability of industry achievement in both level, short term and long term. Building the sustainability as the central to the company’s strategy, innovation and promotion minimises the risk of the industry and also trying to identify new and advanced opportunities for the good success.
This paper explains regarding the monitoring system that continuously monitors the sustainability of an enterprise. It is very significant factor that all the business firms must measure the sustainability at regular intervals using the triple bottom line, i.e., from people, planet and profit to make the business a great success. Proper monitoring will certainly help the business to avoid the risks by taking the right decisions at the right time. Every industry or business in the world should have a definite obligations to the community linked with the industry and also towards the environment. In addition to that the economic and social aspects of the business also play an important role.
Proper sustainability should be included into the all process of the industry from guidelines and management throughout the all actions such as buying, manufacturing and distribution. While sustainability should be motivated from the top management and it is not the job of a staff or the department-it should involve everyone in the business. The paper also explains and discusses the sustainability indicators of leading power and petrochemical group, Royal Dutch Shell which is commonly known as shell. Shell is one of the popular company and leading company in all area regarding oil and gas sections.
Dimensions”The triple bottom line is the place where corporate and societal interests intersect. It is a new way to measure the bottom line- where profits go side-by-side with environmental and social performance – and an illuminating way to understand the often fuzzy concept of sustainability.” (W.Savitz,2006).
Triple Bottom Line(TBL) which is also known as people, planet and profit or the “the three pillars”. There is no perfect definition for triple bottom line but the triple bottom line is all about measuring the sustainability of the business. If the triple bottom line shows positive then it is said that the business is working in an efficient manner. The picture below shows the extent as three areas of sustainability.
The people factor or the social impacts of a business is very easy to calculate while comparing to environmental factors. The key issues to be monitored in regard to social impacts are labour happiness, their fitness and security human rights, community outreach and consumers. The four core and key indicators of social performance are:
* Labour Practise : This includes labour relations, employments, fitness and well being, security, diversity, education. * Human Rights : Bargaining, freedom, management relations and there strategy, non discrimination. * Safety : Inducement & bribery, political donations, society. * Product responsibility: Good customer service, product safety in regard to the customer, product warranty.
By following all the key indicators of social performance a firm can achieve a good success. Superior moral principles should be put by the business firms which help to construct a better culture. The public standard of triple bottom line get into description that a industry has citizens inside the industry i.e., employees and citizens outside the industry i.e., community. A industry applying the triple bottom line values will take action in a way that help the society and will make sure that the citizens are not browbeaten or dying out by the actions or pratices of the business. Social aspect that must be measured contain labour using up and labour payment, working environment and also keeping up the standard of living of the people.
ProfitFinancial or economic presentation of a business is the simplest of the three criterion to evaluate correctly. Traditional bookkeeping technique report the inflow and outflow of capital from the company, normally include money, assets and liabilities and additional industry capital. The financial criterion can be used to decide to which extent an organisation produce in economic value. It can also find out the net value of the industry at a specified point, The main and the core indicator of economic performance are the follows : * Sale, Income, Return on the asset
* Income Tax which is paid* Financial Flows* Employment
The financial indicators divide the stake holders into different groups. They are : * Clients: The financial flow here is represented by the net sale and crash of the markets. * Supplier: The financial flow is shown by the price of merchandise, resources and services acquired. * Workforce: Salaries and remuneration that include earnings, retirement fund, job loss payment etc shows the financial flow. * Providers of resources: Large or reduced retained wages at the closing stages of the phase represents the financial flow. * Public sector: Total sum of taxes and the factors such as donations to community, civil societies etc are the indicators
PlanetIt is significant and vital factor that all the business firms must to give extraordinary care and attention to the environment by preventing the danger that affects all living creatures by their business actions. The Triple bottom line organization try level best to improve the nature where possible and try to diminish and limit their harmful impacts to the nature. Organisations require to look at their environmental issues such as pollution or waste disposal and also should consider the impact of their goods and their services. Some of the environmental indicators are follows:
* Resources: Quantity of resources used and quantity of resources that is recycled * Energy: Encourage renewable source of energy based goods and also the steps which are taken to cut down indirect energy utilization. * Water: Quantity of water consumed by the business and quantity of water that is recycled * Biodiversity: Type and location of land hold near to the protected areas of large biodiversity etc.. * Emissions and Waste disposals: Green house gas emissions and steps taken to reduce the emissions, methods used to dispose the waste materials. * Transportation: The ecological impact of transferring merchandise and resources used for the business process and also transferring the staffs to the workplace.
DESCRIPTION ABOUT THE COMPANY
ROYAL DUTCH SHELL
The Royal Dutch Shell Group was formed by the merge of two rival companies, Royal Dutch Petroleum Company and the Shell Transport and Trading Company, with the indent to compete globally against the dominant American Petroleum Company, Standard Oil. This move was made to survive the crises of 1907.
The company expanded to Europe, Africa and America in the early twentieth century and excelled, as the mass production of cars has opened up a vast market. Many Shell operations closed down during the First World War, but after the Second World War, in the years 1950s and 1960s there was a dramatic increase in its oil output and sales. In 1980s, the company explored solutions for many environmental concerns by installing new technologies and launched new products. In July 2005, the parent companies Royal Dutch and Shell unified to form Royal Dutch Shell.
Shell is engaged worldwide in the principal aspects of the oil and gas industry and also has interests in chemicals and other energy-related businesses. The Company operates in three segments: Upstream, Downstream and Corporate. Upstream combines the operating segments Upstream International and Upstream Americas, which are engaged in searching for and recovering crude oil and natural gas; the liquefaction and transportation of gas; the extraction of bitumen from oil sands that isconverted into synthetic crude oil, and wind energy. Downstream is engaged in manufacturing; distribution and marketing activities for oil products and chemicals. Corporate represents the key support functions, comprising holdings and treasury, headquarters, central functions and Shells self-insurance activities.
Royal Dutch Shell edged Exxon Mobile Corp. as the top IW 1000 manufacturer after Exxon had maintained the No. 1 spot the previous five years. Shell’s revenues grew 28.1% in 2011 to US$484.5 billion. Exxon Mobil was close behind with revenues reaching $471.1 billion last year, a 26.5% increase. It reveals that the petroleum and coal products industry have dominated the sector despite the unrest in the Arab world. In 2012 was awarded the much sought-after “Energy Company of the Year” and “Commodity Excellence Award for Natural Gas” for the company’s commitment to continual innovation.
Source: (IW 1000 Shell’s Crowning Achievement)
Most of the oil giant’s crude is produced in Nigeria, Oman, the UK, and the US. Royal Dutch Shell is also investing heavily in the Athabasca Oil Sands Project, which converts oil sands in Alberta to synthetic oil. The company operates 43,000 gas stations and is the world’s largest retail fuel network. Royal Dutch Shell, which operates in more than 80 countries, also produces refined products and chemicals at more than 30 refineries, transports natural gas, trades gas and electricity, and develops renewable energy.
INDICATORS FOR ROYAL DUTCH SHELL
Human RightsAccording to Royal Dutch Shell human rights are classified into five sub headings. All these layers are shown in below graphical representation :
Source: (The Shell Sustainability Report)
The Shell universal Business values need their workers and contractors to value the human being rights of fellow staffs and society where the shell operates. They mainly focus on four aspects across Shell’s actions where the esteem for human rights is particularly vital to the way shell operates: community right, labour right, national rights and security. The picture shown above gives the complete details about each aspect of shells human right policy. Shell played an important role been in the growth in commerce and human rights. Even as it is the responsibility of government to guard the human rights, Shell identify the duty of firms to respect the workers, as in with UN Guiding values on trade and Human Rights.
Diversity:The Royal Dutch Shell has a organized move forward approach to manage its diversity. Shell consider that they will bring in more respect if it attracts public from different surroundings and experience. As so, it will certainly assist the company to maintain a very good effective relationship with others and also help challenging in mixed society and marketplace. Security and Safety:
Shell always maintain to provide high degree of safety and security to their clients. The main goal of shell is that to have no sufferers and no spill or other events that hurt the workers, service providers or neighbourhood people. Shell also give special care to avoid the environment at risk. In 2012, shell achieved record of small damage or injury rates. Though, any damage or event, no matter how minute it is, serve as a reminder of the necessitate that avoid the complacency (sustainability report, 2012).Shell have many must follow rules for their staff to avoid injuries and it was success to a great extent.
Health Safety:Shell has an organized approach to manage Health, Safety and Environment Management System (HSE). Shell handle safety through accurate steps and also by embedding a protective society in the every day life of the employees. All the staff working for shell and other joint business enterprise that shell operate must obey the all necessary safety rules.2012 is now recorded as the less injury rates while comparing to other years.
Source: (The Royal Dutch Shell Sustainability Report, 2012, P.35)
Green house gas emissions:
Shell is trying to reduce the green house gas emissions to taking many necessary steps. In 2011 the gas emission was about 74 million tonnes and it is reduced to 72 million tonnes 2012. Shell is continuously working on the improvement of its operational performance and energy effectiveness to reduce the green house gas emissions to a certain extent.
Source: (The Royal Dutch Shell Sustainability Report , 2012, P .32)
The flaring of natural gas in the upstream business of the shell in 2011 was 10.0 million tonnes and it is reduced to 7.7 million tonnes in 2012.Now shell is aiming to reduce the operational ﬂaring which may help to decrease the percentage of flaring. The ﬂaring occurs mainly due the short of of equipment that capture the gas produced. The below graph shows the flaring details:
Source: (The Royal Dutch Shell Sustainability Report , 2012, P .32)
Spills;Royal Dutch Shell has very clear ideas and measures to avoid the operational spills, and many projects are undergoing to improve the services and pipelines to reduce spills .But, spills are still occurring for some factors such as some operational failure, disaster or abnormal corrosion. In 2012 the spill accounted to only 2.1 thousands tonnes which was 6.0 thousand tonnes in the year 2011.In coming years shell is trying hard to reduce the spills to a great extent.
Source: (The Royal Dutch Shell Sustainability Report , 2012, P 33) Water:
Shell uses many superior and new technologies to minimise the use of water resources. Shell makes sure about the availability of water where they operate and also takes necessary steps to reduce the usage of water. In 2012 the usage of fresh water by the shell came down to 203 million cubic meters which was 208 million cubic meters in the year 2011.The downstream business of the shell uses about 17% of fresh water to produce oil and chemical products and upstream business uses 25% of fresh water. Shell is trying its best to minimise the usage of fresh water in the coming years.
Source: (The Royal Dutch Shell Sustainability Report, 2012, P.33)
Source: (The Royal Dutch Shell Sustainability Report, 2012, P.36)
The revenue of the Royal Dutch Shell in the year 2012 was $27 million and the shell proudly announces dividend of $11 million for the shell’s shareholders. The investment of shell is $30 million and $1.3 million was spend for many researches and for other development programmes. Their net income helps the business to sustain for the future. In 2012 company made a decision to invest money in two natural gas projects which will help them to reduce flaring in Nigeria.
The production of shell’s oil and gas in 2012 was about 3.3 million boe per day, which is up to some extent from the year 2011.Shell takes necessary steps to increase their sales of liqueﬁed natural gas (LNG) by about 7% to roughly around twenty million tonnes.
Shell ScorecardIn the year 2012, sustainable growth continuous to report for 20% of shell’s scorecard, which assist to decide the yearly bonus level for the workforce which also includes the people in Shell Executive Committee which is alsocalled as EC. And this EC in the year 2012, sustainable growth values were divided consistently between the Shell security performance and values that covers the companies operational spill, fresh water use and also the energy efficiency.
CONCLUSION AND RECOMMENDATIONS
Social, environmental and economic aspects of the Royal Dutch Shell are endlessly being monitored by means of significant indicators. However , by looking to the figures and the information which are mentioned in the whole report, it is very clear cut that there is a very reliable and efficient development in every consecutive year in almost all the phases of Royal Dutch Shell.
By considering the social dimensions of the shell it is very clear that the companies main concern was to give more care and attention to health, fitness and the safety of the workforce .In addition to that while looking the social phase of the company the main point to note is that there is a huge reduction in the rate injuries in every year. About 1.3 million dollars has spent by the company for the many types of researches and development programmes. One of the recommendation that can be put forward is that, the Shell should carry out a regular inspection concerning the troubles faced by their employees to build their business more workforce friendly and efficient.
All the business or firms mainly the oil companies must give a special care in guarding the nature. These companies must become be environmental friendly. The recent oil spill in the rainbow lake in the north western part of Alberta by Pace gas and oil company made a big loss to their business and moreover it damaged the natural resources and also marine life. Royal Dutch Shell had executed innovative tools to guard the ecology by avoiding the dangerous impact which came by their business operations.
It can be get cleared from environmental data of the shell which is shown in the details that the business had put many new procedures to recover the energy effectively, and also green house emission is dropping every by year. Shell tried their level best to limit the using of fresh water which is an important for their business and also they implement technologies regarding to the recycling of the waste water.
Shell must take necessary actions regarding the oil spills because from the graph we can see that spills shows increase and decrease in different years. So constant steps must be taken to reduce the oil spills in the coming years. Shell must do research regarding the oil spills and also invest more money for implementing new technologies to reduce the spills to the minimum level.
It is clear from the economic indicator of Royal Dutch Shell that the company made a good profit to the their share holders. And between the company has also invested a certain amount of cash for maintaining future sustainable development in their business. The net income or revenue of the company shows that the Royal Dutch Shell is economically very stable and so efficient.
By watching and monitoring the company’s performance in all areas it very clear that the company is going on the very right track of sustainability by giving equivalent important to the triple bottom line, i.e. people, planet and profit.
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