Environmental Management for Sustainable Development of Chevron - Case Study Example

Environmental Management for Sustainable Development Table of Contents Table of Contents 2 Introduction and Background 3 The Business Case 4 Chevron’s Environmental Activities 5 Energy Efficiency and Conservation 7 Corporate Responsibility 9 Summary Conclusion 10 Reflective Log 12 References 14 Introduction and Background Sustainability management has taken its toll in recent years in the midst of the organisational activities (Strange & Bayley, 2008). In the present emerging economy, the corporate sustainability is viewed as a vital strategy of modern organisations. Sustainability management has also provided the global economy with a new shape, making the corporate functioning more transparent and responsible. The environmental aspect that surrounds the sustainability field provides ample opportunities for the effective business activities. Resource efficiency, working conditions, community development, safety standard and production input factors among others are the concerned environmental aspects that can be observed as strongly influenced by the sustainability management initiatives taken by the company (Warhurst, 2002). With due significance to this concern, ‘Energy of the Future’, a consulting organisation, have been involved in providing strategic suggestions to other organisations on their environmental management responsibilities along with the related activities (Bekefi, 2008). In this regard, the environmental management can be observed as concerned with the ‘greener attitude’ of the society (Chen & Chai, 2010). On further note, the sustainability management takes into concern the concept of ‘peak oil’, which is greatly being used in the oil and the gas companies. Correspondingly, this particular report has been aimed at analysing the major concerns associated with the sustainability activities of the major oil and gas companies in the current business scenario in order to suggest Chevron, with its future activities related to its environmental strategies. Accordingly, a brief understanding about Chevron’s sustainability-related activities will be developed through this essay. This essay will provide an understanding of the company’s previous and the planned activities pertaining to the environmental management on a continuous basis. The Business Case In order to gain a brief understanding about the sustainable activities undertaken by Chevron, certain concepts associated with it have been taken into consideration, in the following discussion. The two prime concepts highlighted in this context include ‘Greener attitude’ of the company and the ‘Peak oil’ theory, which are expected to be highly beneficial in the process of understanding the importance of organisational sustainability. In the recent scenario, the consumers’ preference trend can be witnessed as increasingly inclined towards organic products. As the concern has increased for the environmental aspects, it has resulted in the development of the green marketing concept, further imposing considerable influence on company operations. Accordingly, the greener attitude has emerged in the current business environment to steer the organisational processes towards a more ethically sound and responsible direction in alignment with the market trends (Saxena & Khandelwal, 2008). In the similar context, the theory of Peak oil implies about the concerned time at which the rate of the petroleum extraction is the maximum and hence, is regarded as highly valuable for oil and gas companies, including Chevron. This particular theory is based on the rise, fall, peak and the depletion pertaining to the oil fields (Fusco, n.d.). Chevron, as an US multinational energy corporation, has its mission concentrated on managing risks not only those related to its business functioning but also related to its environmental presence, which are required to be mitigated to reward smoothness and effectiveness in the overall organisational functioning. The company takes into account, various measures for maintaining adequate safety to possible hazards when delivering energy resources to its worldwide distributors. The energy resources provide power to human for enduring economic progress. The company works upon certain basic principles for gaining efficiency in its organisational operations. Preserving a hazard free environment for the workforce is one such basic principle of the company. On further note, promotion of healthy workforce by mitigating the prevalent health risks, reflect about a vital principle upon which the organisation tends to rely. The next principle is the identification and the subsequent mitigation of the environmental safety risks, which can be easily aligned with the factors related to the concept of greener attitude and the Peak oil theory. Furthermore, efficient use of the natural resources, which is a major dimension of the Peak oil theory, is also regarded as the base principle of the organisation (3Chevron Corporation, 2014). Chevron’s Environmental Activities Chevron’s management has established its branches in Barrow Island oil fields, located in the northwest coast of Australia. This particular business set up of Chevron is regarded as the industry benchmark, pertaining to the petroleum development along with the bio-diversity protection. Environment remains a vital factor in the decision-making strategies within the business operations. Eventually, the company also undertakes measures for identifying along with mitigating the prevalent risks. This assists the company in reducing the environmental impact on the business operations largely. Operation Excellence Management System (OEMS) is the strategic framework that provides the company a platform to achieve the excellent environmental performance. The company has therefore been applying the concept of OEMS in order to manage the issues pertaining to the health, reliability and environment among others. Furthermore, Environmental, Social and Health impact Assessment (ESIA) is another greener process that has been deployed by the company since the year 2007. This measure of the company was been executed with a motive to evaluate the latest capital projects with regards to its impact on the ESIA. In this respect, it has been further revealed that ESIA is applied by the company in order to plan various ways for minimising as well as avoiding the environmental impacts imposed on its regular business functioning. ESIA also enhances the potential benefits pertaining to the organisational activities. In accordance to the company report, ESIA has been applied in its worldwide functioning within around 900 capital projects (3Chevron Corporation, 2014; Chevron Corporation, 2013; Gov.UK, 2013; CIMA, 2011). Respecting biodiversity is another vital aspect, which the company follows. The position that the company holds with regards to biodiversity mainly expresses its commitment towards the environment to a credible extent. The commitment is associated with the incorporation of the biodiversity considerations. Additionally, it has been revealed in the company reports that its business units operating globally follow the principles of biodiversity protection, which is quite essential for any oil and gas company to ensure its ethical legitimacy and responsible greener attitude. Another environmental measure being implemented by Chevron is the conservation of the freshwater resources. The company recognises the importance of the environmental, economic and the social resources for its long-term development. Therefore, it has taken an apparent greener attitude towards the same. Functioning as a global company, Chevron has undertaken various measures to avoid water pollution by getting engaged with the management of the fresh water integration. In Kazakhstan, Chevron is regarded as the largest producer of oil. The company also holds important stakes in the other projects such as Tengiz and Karachaganak fields. Illustratively, the joint venture of the Tengiz and Chevron formed a new establishment i.e. Tengizchevroil (TCO). As per the observation, the workforce of the TCO is engaged in the rigorous improvement of its environmental performance. In accordance to the sustainability report of the company reflects that the 2.5 billion US dollars has been invested in the TCO projects in the year 2000. It has been further determined that the investments being made resulted in the reduction of the harmful environmental impacts, which can be accounted as illustrations of the company’s greener attitude, as these activities reflect about the gradual development of the company in the fields of environmental concerns (3Chevron Corporation, 2014; Chevron Corporation, 2013; Enel, 2010). Energy Efficiency and Conservation Concerning energy efficiency prospects, it has been assumed that a reduction of 5 percent in energy consumption worldwide saves around 10 million barrels of oil on daily basis and therefore, can add on to the long-run sustainability of Chevron, depending upon the theory of Peak oil. In addition, it has also been determined that by engaging in a more responsible and greener energy consumption practices, the company can derive other benefits in terms of energy saving measures, which usually leads to the reduction in the carbon emission and is termed as a major attribute to the Peak oil theory. Moreover, energy saving attitude of Chevron tends to lower its business costs being incurred for the execution of its operations in a smoother way. Furthermore, a responsible attitude towards energy consumption also ensures the conservation of its supplies, which again substantiates the principles of Peak oil theory. For instance, the Chevron Energy Solutions (CES), since its commencement, have been aiming at assisting the clients in the overall reduction of its energy use on an average of 30 percent. The customers that mainly implement the CES are schools, business units, colleges and government agencies. The company further reinvests the money that is being saved by the energy conservation in the organisational improvements in accordance with the principles of the Peak oil theory (4Chevron Corporation, 2014; Chevron Corporation, 2013). Chevron further revealed that in accordance to the energy saving measures it is continuously striving for its excellence in applying the notion of Peak oil. The company further conveys about its position as the Corporate Energy Coordinator (CEC) results in the outcome of the efforts pertaining to the energy efficiency criteria. In this respect, it has been further revealed that being the coordinator, Chevron requires to develop best practices continuously, which ultimately is shared amidst the diversified business units for effective energy consumption. The energy conservation efforts reflect about the positive engagement of the company in sustainability management practices. Furthermore, it has also been ascertained from the company reports that it also engages in the generation of electricity in an efficient manner with its environmental responsibilities in account. In recent times, the society as a whole, endures accelerated concern with regards to the problem of energy conservation, wherein electricity is considered a major part of energy consumption, which requires advance measures to be undertaken by the organisations for limiting scarcity in the availability of this particular natural resource. Chevron operates the units at the refineries as well as at the production facilities using around 3500 megawatts of electricity. This ensures that energy conservation along with its efficiency is considered vital factors for the effective sustainability of the organisation in the midst of the competitive market strategy in alignment with its environmental responsibilities that can also be treated as its greener attitude (4Chevron Corporation, 2014; Chevron Corporation, 2013; Schaltegger & et. al., 2002). Another important activity of the company is the demonstration project, for which the company has been focused on using solar energy to gain energy efficiency in its operations and thus, can be termed as its depiction of greener attitude. It has further been observed that Chevron is regarded as the best industry with regards to the disclosure of carbon emissions. As discussed, CES application has significantly accelerated the efficiency of Chevron’s operations (2Chevron Corporation, 2014; Chevron Corporation, 2013; UNEP, 2006). Corporate Responsibility Chevron puts a major degree of stress on strengthening the communities, wherein its functions, as a whole. In this regard, it has been further identified that they believe in the development of the overall society that ultimately results in the acceleration of the business operations. It is further observed that the company enters into the execution of various measures with a motive to develop the surrounding society. In Angola, where Chevron operates, the company therefore provides substantial opportunities to the children to enhance their knowledge regarding science projects (Blackburn, 2012). Another example can be taken from the operations conducted by Chevron in Kazakhstan, where Chevron’s business units have been playing a major role in helping and financing the HIV affected population, with much significance to HIV infected expecting mothers. This unit helps them to deliver a healthy child. Furthermore, the observation of the company reveals that it has entered into the partnership with government sector organisations and the non-profit organisations among others with a motive to initiate advanced measures towards the application of peak oil theory and an integrated greener attitude aimed at better environmental protection. Furthermore, Chevron mainly makes its investment in three areas with a motive to ensure societal development. The three major areas include health, education and economic development. Societal development is possible only under the confirmed development of these three areas. According to the company, healthy people within the society are greatly responsible for the development of the organisation, which also depicts the return benefits of a greener attitude towards the environment by the company (Roome, 1998). It is worth mentioning in this context that Chevron believes developing the education provision will enhance the community development and growth prospects, which also advocates its greener attitude (Gnacadja, n.d.). As observed from the sustainability report of Chevron, it has been observed that the company have implemented energy metrics with a motive to derive estimation of the energy being used in actual terms, which again reflects on its operations in accordance with the notion of Peak oil (Chevron Corporation, 2014; Chevron Corporation, 2013; Köhler, & et. al., 2012). Summary Conclusion The essay provided a vivid understanding about the concept and the importance of sustainability development. In this regard, the essay revealed that environment, energy and the corporate responsibility plays a vital role in the acceleration of sustainability of any organisation. The obtained findings further revealed that Chevron’s environmental strategies enabled the company to maintain its sustainability in the competitive market by ensuring reduction in the rate of environmental pollution caused due to its operations. The essay further revealed about the measures such as energy metrics used by the company to derive the results related to energy use. Thus, it can be well determined that by investing in the field of energy, environment and the communal development, sustainability can be effectively achieved by modern organisations. Reflective Log This particular essay was concerned regarding the importance of the sustainability management in case of Chevron. The information being acquired mainly considers the secondary sources, i.e. scholarly journals, articles and the books. The objective of the essay was therefore concentrated on providing an in-depth understanding about the application and the importance of sustainability activities taking the example of Chevron. Going through the updated news articles and keeping a track of the ongoing business functioning, I was quite aware of the fact that sustainability management is an important factor for organisational development. As an analyst, when I explored the activities and the research projects of Chevron (a major global oil and gas company), I derived various information about the necessity for involving in the sustainable development. As observed in the study, for ensuring the sustainable development of organisations pertaining to the oil and gas products, areas such as environment, energy conservation and corporate responsibility must be enhanced. These areas are not only important for specific organisations but for the community overall to ensure utmost benefits as desired. Accordingly, increase of knowledge in these areas usually leads to the development of the R&D department of an organisation. The company is also involved in future projects that ensure societal development in the areas of organisational operations. In the recent scenario, majority of the organisations operates globally. This accelerates the requirement for the measurers related to environmental concerns. In the recent scenario, everyone is getting concerned about environmental safety factors. The organisations have been adapting various methods for reducing the harmful impact of the environment on the organisational operations and vice-versa. Furthermore, I derived information about the measures being implemented for the reduction of carbon emission in the atmosphere. I also derived information about the concept of Biodiversity and the Green attitude. These have been imbedded in the society and the prevalent organisations are developing their strategy in accordance to the reduction of environmental pollution. In addition, I have also understood about the concept of Peak oil, which is an important factor within the oil and the gas companies. The peak oil theory also helps the oil and the gas companies to ascertain the accurate time pertaining to the extraction of oil. This will further help the companies to monitor the extraction process, which might cause harmful impacts on the environment. However, I further observed that water resources are another factor that is taken under consideration with regard to environmental measures. Conclusively, the analysis of the company also provided me with the information about the importance of the energy conservation. I further derived knowledge that energy consumption is necessary as it saves around 10 million barrels of oil, applying the Peak oil theory, which is quite necessary for any oil and gas company reflecting a greener attitude in its organisational functioning. References Bekefi, T., 2008. Chapter 1: A New Framework for Implementing Corporate Sustainability. Daedalus Strategic Advising, pp. 1-51. Blackburn, W. R., 2012. The Sustainability Handbook: "The Complete Management Guide to Achieving Social, Economic and Environmental Responsibility". Routledge. Chen, T. B. & Chai, L. T., 2010. Attitude towards the Environment and Green Products: Consumers’ Perspective. Management Science and Engineering, Vol. 4, No. 2, pp. 27-39. CIMA, 2011. Sustainability and the Role of the Management Accountant. Waikato, pp. 1-14. 1Chevron Corporation, 2014. Corporate Responsibility. In the Community. 2Chevron Corporation, 2014. Energy Efficiency. Reducing Our Energy Costs. 3Chevron Corporation, 2014. Caring for the Environment. Global Issues. 4Chevron Corporation, 2014. Testing New Technologies. Emerging Energy. Chevron Corporation, 2013. 2012 Corporate Responsibility Report. Human Energy, pp. 1-44. Enel, 2010. Managing for sustainability. Economic Intelligence Unit, pp. 1-26. Fusco, L., No Date. Peak Oil Theory. UCS, pp. 1-6. Gov.UK, 2013. The Oil and Gas activities of the Energy Development Unit. Department of Energy & Climate Change, pp. 1-22. Gnacadja, L., No Date. Benefits of Sustainable Land Management. UNCCD, pp. 1-16. Köhler, A. & et. al., 2012. Sustainability in Project Management. Gower Publishing. Roome, N., 1998. Sustainability Strategies for Industry: The Future of Corporate Practice. Island Press. Saxena, R. P. & Khandelwal, P. K., 2008. Consumer Attitude towards Green Marketing: An Exploratory Study. University of Wollongong, pp. 1-32. Strange, T. & Bayley, A., 2008. Sustainable Development. OECD, pp. 8-134. Schaltegger, S. & et.al., 2002. Sustainability Management in Business Enterprises. Centre for Sustainability Management, pp. 1-119. Warhurst, A., 2002. Sustainability Indicators and Sustainability Performance Management. International Institute for the Environment and Development, pp. 1-129. UNEP, 2006. Sustainability Management and Reporting: Benefits for Financial Institutions in Developing and Emerging Economies. Documents, pp. 1-29. Read More