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P The Gas Company

Is prevention of further global warming social, ethical

responsibility of company or it is an economic decision or is

it all of the above?

Submitted by:

Submitted to:

Date:
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Overview of the Company:

Operating as an integrated oil and gas firm, BP Plc (BP) engages in a variety of business

ventures. The company's upstream division is responsible for field development and production

in addition to oil and natural gas exploration, development, and production. In the meanwhile, its

midstream activities include trading, marketing, and transportation of natural gas, including LNG

and NGLs (liquefied natural gas). BP engages in a range of downstream operations, such as

crude oil marketing, transportation, refining, manufacture, supply, and trading, as well as

petroleum and petrochemical product production. The business also offers associated services to

retail and wholesale clients. BP offers its clientele a wide range of products and services,

including energy, lubricants, petrochemicals, and fuel.

With operations in Africa, Asia, Europe, Australasia, North America, and South America, BP

has a wide geographic reach. The company's main office is in London, Greater London, United

Kingdom. (Bach, S, 2017)

Introduction:

In today's ever-changing business climate, companies are essential to societal and environmental

consequences in addition to economic development. A prominent player in the oil industry, BP,

is one such corporation that is being investigated. The company has committed to investing

billions in low-carbon and renewable energy sources in order to reach its goal of having net-zero

carbon emissions by 2050. BP revised its plans in February, lowering the original ambition of

cutting oil and gas output by 40% from 2019 levels by 2030 to a more modest 25% target as per

Auchincloss CEO of BP. (Bousso by Reuters, 2023). This report's main objective is to critically

evaluate whether BP should be held accountable for stopping future global warming. This report
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is to identify if combating climate change is corporate social responsibility (CSR), ethical issue,

or the financial decision and above all of it for BP the oil and gas company?

Explanation:

Management terms in context to BP:

Setting the stage by explaining important management concepts in the context of BP's operations

is vital before getting into the specific questions:

Planning:

In the context of BP, planning entails developing long-term environmental objectives, emission

reduction targets, and strategies for sustainable energy practices. BP has changed its target from

a 50% decrease in carbon intensity to achieving net-zero carbon intensity for marketed energy

products by 2050 or before. Rather than the prior aim of over 15%, our target for 2030 is now a

15-20% decrease in the lifecycle carbon intensity of these items. We have also expanded the

scope to include energy goods that are physically exchanged. This goal now aligns with our

growth engines as we transform.

Organizing:

By incorporating eco-friendly technology into its infrastructure, BP must arrange its activities

and resources in a way that is consistent with ecologically responsible practices. BP is aiming to

incorporate six ways so that an effective action can be taken against global warming further

which includes; calling for a price of carbon, supplying of natural gas, offering renewable

sources of energy, investments in innovative startups, pursuing efficient operations, and lastly

through helping costumers reducing carbon emission. (Christiansen, Atle Christer, 2002)
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Leading:

At BP, leadership entails encouraging innovation in green technology, promoting a culture shift

towards sustainability, and motivating staff to support the organization's environmental

stewardship efforts. The leadership of BP has come under fire for its attitude to ethical and

sustainable business practices. John Brown, the former CEO, modified the business plan to cut

carbon emissions and energy costs, but his emphasis on environmental transparency resulted in

environmental problems. After taking over, Tony Hayward came under fire for allegedly

contributing to the Deepwater Horizon accident through cost-cutting and the pursuit of quick

profits. The company's risk-taking attitude has not been substantially altered by current CEO

Bob Dudley, who has prioritized traditional oil and gas investments above a clear commitment to

sustainable practices.

Controlling:

Frequent evaluations of the environmental effect, compliance with emission reduction goals, and

the incorporation of feedback loops for ongoing development should all be part of BP's control

systems. Our strategy for sustainability is planned, systematic, and cooperative. It is constructed

on solid, well-established pillars. Our continuous efforts are directed at a deeper and more

comprehensive integration of sustainability into our processes, governance, business choices, and

culture. (Sustainability report, 2022)

Global Warming: Corporate Social Responsibility, Ethics, and Economics

Corporate Social Responsibility (CSR):

Since stopping future global warming requires BP to acknowledge and resolve its environmental

effect, it is consistent with CSR standards. Communities and the environment both benefit from
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the adoption of sustainable practices. BP's corporate social responsibility (CSR) commitments

include the following:

(1) supporting community-based initiatives aimed at raising living standards and income

(2) striving for world-class operational standards

(3) attempting to prevent, minimize, and mitigate environmental impacts within its operational

domains

(4) engaging in joint ventures with other companies to address carbon and climate risks

(5) empowering its workforce

(6) investing in alternative energies (British Petroleum 4-23).

Ethical Responsibilities:

Addressing global warming is essentially an ethical obligation. Being a significant actor in the

energy sector, BP needs to think about the moral effects of its operations on the environment and

future generations. We are supporting business efforts to achieve DE carbonization targets,

advocating regulations that promote net-zero projects, offering incentives to our personnel, and

assessing our alignment with trade groups. Furthermore, we are improving the disclosures'

openness.

Our yearly bonus, which is given to all qualified workers—including the BP executive team—

has been based on a sustainability indicator since 2019. Our staff are motivated by three main

elements on the bonus scorecard, which they are assessed against: financial performance,

operational performance, and safety and sustainability. Moreover, our group leaders' incentive
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plan is closely linked to the progress we make toward achieving our net-zero operations goal.

(Sustainability report, 2022)

Economic Decision:

Although implementing sustainable practices may initially provide financial difficulties, it is

becoming more and more clear that environmental responsibility and long-term economic

sustainability are related. It makes financial sense for BP to engage in green projects given

consumer preferences, legislative developments, and the world's transition to sustainable energy

sources. BP, which changed its name from International Oil Company to Integrated Energy

Company, has laid forth a ten-year plan for accomplishing its goal of being net-zero. The novel

tactic entails:

Concentrating on low-energy and customer-focused projects:

 A potential eight-fold increase in low-carbon investment by 2025, with a tenfold rise

anticipated by 2030.

 Coordinating with ten to fifteen cities and three key industries to advance DE

carbonization initiatives.

 By 2030, double the number of daily client interactions to 20 million.

Concentrating on a valuable, robust hydrocarbon industry:

 Reducing capital intensity when large-scale projects come to an end and keeping an eye

on efficiency to increase profits and ROACE growth.

 With active portfolio management, a 40% drop in output is anticipated by 2030.

 No travel to uncharted territories. (Flammer,2013)

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Reaching the goal of being net-zero:

 By 2030, we want to have cut our emissions from BP's activities by 30–35%.

 Aiming to cut carbon-related emissions from upstream oil and gas production by 35–40%

by 2030.

 Aiming to reduce the carbon intensity of goods sold by BP by more than 15% by 2030.

Generating wealth for stockholders over the long run:

 Introducing a robust dividend reset every quarter at a rate of 5.25 cents per share, and

pledging to repurchase at least 60% of excess cash in shares.

 EBIDA per share will increase at a profitable rate each year between 7 and 9 percent until

2025.

 Putting more money into low-carbon and non-oil and gas endeavors in order to

concentrate on sustainable value.

Pro/Con Analysis:

Advantages:

Enhanced Corporate Reputation: By adopting a sustainable approach, BP is able to draw both

investors and environmentally conscientious customers.

Long-Term Cost Savings: As technology develops and economies of scale take effect,

investing in renewable energy may result in long-term cost savings. (Sharma, Kant,

Mehta,2012)

Drawbacks:
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Initial Capital Expense: Making the switch to sustainable practices might necessitate large

upfront costs.

Market Competition: As BP makes the shift, competitors may not instantly follow suit, which

might provide difficulties.

Efficiency and Effectiveness:

Efficiency:

Transition to sustainable practices are meant to improve efficiency in terms of resource

consumption and waste reduction along with bring into line the principles of operational

efficiency.

Effectiveness:

BP's effectiveness towards addressing global warming is reliant on to the successful execution of

sustainable initiatives, meeting emission reduction targets, along with signifying a noticeable

commitment to environmental obligation. (Hove, Menestral, 2002)

Conclusion:

In conclusion, BP has an ethical obligation to stop more global warming, but it also has an

obligation to practice economic prudence and corporate social responsibility. Through the

strategic planning, organization, leadership, and management of its activities, BP can make a

substantial contribution to the worldwide endeavor to mitigate the effects of climate change. The

benefits and drawbacks highlight the complexity of the situation, but BP must prioritize climate

action due to the long-term advantages for society, the environment, and the company's financial
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viability. BP has a unique opportunity to set the bar for ethical and sustainable business practices

at this critical moment, as companies throughout the globe struggle with their role in

environmental stewardship.
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Reference:

 https://www.reuters.com/business/energy/bp-says-remains-committed-financial-climate-

ambitions-2023-10-10/#:~:text=The%20company%20aims%20to%20achieve,from

%2040%25%20from%202019%20levels.

 British Petroleum 2013, BP Sustainability Report 2013. Web.

 Bach, M. S. (2017). Is the oil and gas industry serious about climate action? Environment:

Science and Policy for Sustainable Development, 59(2), 4-15.

 https://www.bp.com/en/global/corporate/sustainability/our-approach-to

sustainability.html

 Christiansen, Atle Christer 2002, Beyond Petroleum: Can BP Deliver? Web.

 Flammer, Caroline. “Corporate Social Responsibility and Shareholder Reaction: The

Environmental Awareness of Investors.” Academy of Management Journal. 56.3 (2013): 758-

781. Business Source Premier. Web.

 Levy, D. L., & Kolk, A. (2002). Strategic responses to global climate change: Conflicting

pressures on multinationals in the oil industry. Business and Politics, 4(3), 275-300.

 Sharma, Surya Kant and Sunita Mehta. “Where do we go from Here? Viewing Corporate Social

Responsibility through a Sustainability Lens.” Journal of Contemporary Management Research.

6.2 (2012): 69-76. Business Source Premier. Web.

 Kolk, A., & Levy, D. (2001). Winds of change:: corporate strategy, climate change and oil

multinationals. European Management Journal, 19(5), 501-509.

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 https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/news-and-insights/

press-releases/from-international-oil-company-to-integrated-energy-company.pdf