Description
This is a presentation highlights on the corporate social responsibility at Shell Oil.
Corporate Social Responsibility
SHELL OIL
ABOUT SHELL
Global oil and gas company headquartered in The Hague, Netherlands with its registered office at the Shell Centre in London, UK ? Operations in 90 countries, produces 3.1 mn barrels of oil equivalent per day and has 44,000 stations worldwide ? Shell Oil Company, its subsidiary in US, is one of its largest business ? Aim is to help meet the energy needs of society in ways that are economically, environmentally and socially responsible
?
SHELL - TIMELINE
1907
• Formation of Royal Dutch Shell Group • Merger of Royal Dutch Petroleum Company (60%) & Shell Transport and Trading Company Ltd (40%) • Company commissioned eight oil tankers for the purposes of transporting oil
1919 -1921
• Took control of the Mexican Eagle Petroleum Company • Formed Shell-Mex Limited which marketed products under the "Shell" and "Eagle" brands in UK
• Shell-Mex merged its UK marketing operations with those of British Petroleum to create Shell-Mex and BP Ltd • First company to purchase and use an electronic computer in Netherlands – Ferranti Mark 1 Star 1932-1953 • Acquired the mining company Billiton, which it subsequently sold
- 1974
2004-2005
• Shell Group moved to single capital structure – parent company named Royal Dutch Shell plc • Unification completed on 20 July 2005
SHELL - OPERATIONS
Upstream
SHELL
Project & Technology
Downstream
UPSTREAM
?
?
? ? ? ? ?
?
?
Exploring for oil and gas Developing Fields Producing Oil and Gas Mining oil sands Upstream Extracting bitumen Liquefying gas by cooling (LNG) Upstream Upstream Re-gasifying LNG International Americas Converting gas to liquid products (GTL) Generating Wind Energy
DOWNSTREAM
Refining oil into fuels and lubricants ? Producing petrochemicals ? Developing Biofuels ? Trading ? Supply and Distribution ? Retail Sales ? Business-to-business Sales
?
PROJECT & TECHNOLOGY
? ?
?
Manages the delivery of Shell’s major projects Drives its research and technology development programme to create tomorrow’s technology solutions Provides technical services and technology capability to the Upstream and Downstream businesses
Project & Technology Safety & Environment Contracting & Procurement
KEY PROJECTS
TRIPLE BOTTOM LINE
Triple Bottom Line
ECONOMIC
Income - $20.5 billion Shareholders’ dividend - $10.2 billion Shell’s oil and gas production increased by 5% over 2009, to 3,314 thousand barrels of oil equivalent (boe) a day. Increased sales of liquefied natural gas (LNG) by 25% to 16.8 million tonnes
Reduced underlying costs by $2 billion
Six major projects started production in 2010
ECONOMIC
ECONOMIC
Shell Scorecard
Sustainable development (SD) accounted for 20% of Shell’s scorecard According to Sustainability Asset Management(SAM), DJSI, SD performance improved in 2010 SD helps determine annual bonus for employees and Executive Committee (EC)
However, Shell were excluded from the DJSI World Index, in view of operations in Nigeria
Greenhouse gas emissions
Water
Flaring
Environmental
Spills
Energy efficiency
ENVIRONMENT
?
Greenhouse Gas Emissions
?
?
The direct greenhouse gas (GHG) emissions were 75 million tonnes on a CO2-equivalent basis in 2010,a 9% increase on 2009 Shell met the voluntary target they set in 1998 for direct GHG emissions to be at least 5% lower than comparable 1990 level
?
Flaring
?
The flaring – or burning off – of natural gas in our Upstream business rose by 32% compared to 2009, to 10.3 million tonnes of CO2 equivalent
ENVIRONMENT
•
Energy Efficiency
•
Upstream business improved its overall energy efficiency for the production of oil and gas
Operational spills of oil and oil products totaled 2.9 thousand tonnes The number of operational spills was down significantly to 193 in 2010, from 275 in 2009 products totaled 2.9 thousand tonnes Use of fresh water was up slightly to 202 million cubic metres, from 198 million cubic metres in 2009
•
Spills
• •
•
Water
•
Safety Code of Conduct violations Social investment
Training
Social
Social performance
Diversity and inclusion
External voluntary codes
Local procurement
SOCIAL
?
Safety
?
Lowest ever rate of injuries per million working hours – total recordable case frequency – down 15% from our previous best in 2009 Spent more than $121 million on voluntary social investments worldwide
?
Social Investment
?
?
Social Performance
?
Continued to implement new companywide standards for social performance in 2010 that were launched the previous year with HSSE & SP Control Framework
SOCIAL
?
Local Procurement
?
?
Almost $13 billion was spent in countries that, according to the UNDP Human Development Index 2010, have a GDP of less than $15,000 a year per person Shell companies spent over 90% of this $13 billion with local companies
?
External Voluntary Codes
? ?
Support a number of external voluntary codes UN Universal Declaration of Human Rights, the Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises, and the International Labour Organization Declaration on Fundamental Principles and Rights at Work
SOCIAL
?
Diversity and Inclusion
?
?
?
Diversity and inclusion (D&I) measured by the representation of women and local nationals in senior leadership positions By the end of 2010, the proportion of women in senior positions was 15.3%, up 1.3% from 2009 In 36% of countries, local nationals filled more than half the senior leadership positions Focus is on building technical capability and safety critical competencies and skills Provided over 375,000 training days There were 205 violations of the Code of Conduct reported (compared to 165 in 2009)
?
Training
?
?
?
Code of Conduct Violations
?
MEASUREMENT INDICATORS
SOME INITIATIVES UNDERTAKEN
?
Sharing benefits with communities
? ?
In 2010, 90% of Shell staff was nationals Nigeria : 2000 contractors in contracting process and 3000 in entrepreneurship, catering etc Paid $15.4 billion in corporate taxes $2.2 billion in royalties Collected $81 billion in excise duties and sales tax on fuel on behalf of governments Member of Extractive Industries Transparency Initiative (EITI) Pioneered LNG
?
?
Transparency in Revenue
? ?
?
?
?
Cleaner and Better sources of Energy
? ?
Led to its easy shipping around the world Capacity of 550 MW in North America
Tapping the Wind
?
?
Enhancing Oil Recovery
?
Extracting more out of the existing sources
YEAR THAT WENT PAST
? ? ? ?
Produced 2% of world’s oil and 3% of gas Sold 7.6% of world’s LNG $2.1 Bn spent on alternative energy, CCS , and CO2 R&D in last 5 years Direct Greenhouse Gas emissions increased 9% to reach 75 million tonnes in 2010
?
Flaring
?
?
? ?
Rose by 32% compared to 2009, to 10.3 million tonnes of CO equivalent 14% of our total direct GHG emissions 20% was operational flaring Remaining 80% was continuous flaring
2
? ?
80% from Nigeria 10% from Majnoon plant in Iraq
EXTERNAL REVIEW COMMITTEE
? ? ?
Sixth successive year, an External Review Committee has reviewed sustainability report Check for content, credibility and balance External Review Committee members for the Shell Sustainability Report 2010:
? ? ? ? ? ?
Rebecca Adamson, First Peoples Worldwide, USA Motoko Aizawa, Sustainability Advisor, International Finance Corporation, Japan Rafael Benke, Vale, Brazil Philippa Foster Back OBE, The Institute for Business Ethics, UK Christine Loh OBE, CEO, Civic Exchange, China Dan Sperling PhD, Director, Institute of Transportation Studies, UC Davis, USA
? ?
ERC feels that Shell demonstrates industry leadership in addressing climate change Encourages Shell to take further actions in its operations, investments and public engagements
REPORTING STANDARDS
?
Provides information to
? ? ?
Dow Jones Sustainability Indexes FTSE4Good The Carbon Disclosure Project Global Reporting Initiative (GRI) (A+ Rating) International Petroleum Industry Environmental Conservation Association (IPIECA) guidelines UN Global Compact – reporting
?
Reporting in accordance with
? ? ?
Shell Global Solutions
CHALLENGES AND OPPORTUNITIES FOR THE GLOBAL REFINING INDUSTRY
THE OGONI CRISIS AND SHELL
?
? ?
80% of Nigerian government revenues come directly from oil, over half of which is from Shell. Shell continued funding of the military in the Delta region under the auspices of "protecting" Shell from peaceful demonstrators in the village of Umeuchem . Accumulated neglect of corporate social responsibility Shell, over a significant period of time in the oil and gas rich Niger Delta region caused the eruption of 29 militancy, kidnapping and other vices in the area
THE NIGERIA’S NIGER DELTA
•
Ken Saro-Wiwa
? ? ? ? ?
Natural Gas Flaring Oil Spills Pipelines and construction Health impacts The neglect took the life of Ken Saro-Wiwa, the Ogoni activist and eight others in 1995 among many others and caused unprecedented environmental devastation in the region.
30
GOVT. SOLUTION: THE NIGERIA’S NIGER DELTA
The government of Nigeria lost revenue in excess of US$30b in 7 years due to the instability . ? Introduction of amnesty by the Federal Government of Nigeria in for some calm to return. ? A law was also enacted by the National Assembly of Nigeria to make mandatory Social Responsibility contribution of operating companies into the cleaning up and development of the region . Ogoni Bill of Rights ? clean up of oil spills ? reduction of gas flaring ? fair compensation for lost land, income, resources, life ? a fair share of profits gained from oil drilled at their expense
?
31
CHALLENGES @NIGERIA
New challenges Poor track record Corporate citizenship
Challenges @Nigeria
S
? ? ?
SPDC has contributed about $31 billion to the govt (2006–2010) The Shell Nigeria Exploration and Production Company – paid $3.8 billion as taxes Shell run operations contributed over $161 million to the Niger Delta Development Commission
?
additional $71 million - addressing social and economic development challenges in the region
?
?
?
Economic Empowerment Initiative: ? Micro-credit Prog. Launched in1998 ? assisted more than 30,000 people to establish or expand their businesses Shell LiveWIRE (2003) - Platform for youth development ? facilitate the emergence, survival and expansion of youth owned businesses ? The programme has trained more than 3,000 young people since 2003 Cradle-to-Career Scholarship Scheme -brilliant students are awarded scholarships .
?
In 2010, Shell awarded 2,730 secondary and 750 university scholarships.
?
?
Health care - SPDC currently supports 27 health facilities in the Niger Delta. In addition, served 118,000 people through mobile health outreach programmes The Project, NiDAR Plus
? ?
encapsulates HIV/AIDS activities Also includes scaling up health systems performance through an integrated multifaceted approach to health care delivery
ISSUES AT HAND
Worsening reputation • Shells reputation with regards to Sustainability / CSR is not good. After being seen as leaders some years ago they are now being perceived as just putting a lot of money in their communication
Lack of Sustainability / CSR innovation
• Over the last few years Shell have not really convinced on the content and implementation side through innovation at all. This might be the consequence of not being leaders anymore combined with a lack of aspiration for bringing their reporting and best practice onto the next level. Perceived indifferent corporate culture
• The corporate context and culture itself at Shell does not fully go hand in hand with their Sustainability / CSR messaging .
TAKING ACTION
• Integrity, honesty and respect . These values are the foundation of Shell’s code of conduct, and are in line with the business principles set out by the United Nations Global Compact (UNGC) and the OECD guidelines for multinational enterprises. • General Business Principles, standards, anti-corruption principles, values and initiatives, through regular training , induction programs • Shell General Business Principles through making staff aware of its operations and activities through clear guidelines. • Shell devised a document for management to identify ethical dilemmas and corruption
Core values
Communication
• Shell co-operates closely with NGOs, industrial organisations and international bodies to tackle collectively the problem of corruption. It has signed up to international agreements-
Policies and initiatives
Reporting
• Shell has made strategic changes to its business model, supply chain and operations, in order to incorporate strong principles of transparency, anticorruption and business responsibility.
Corporate governance is the set of processes, customs, policies, laws, and institutions affecting the way a company is directed, administered or controlled
Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
?
?
For Shell
“Corporate governance affects the way we direct our company and the relationship we have with interested parties. We believe that the highest standards of corporate governance are essential to our business integrity and performance.”
?
Structure
COMMITTEES
LEADERSHIP
ARTICLES OF ASSOCIATION
VALUES
LEADERSHIP
?
Royal Dutch Shell has a single-tier Board of Directors chaired by Jorma Ollila. The executive management is led by Chief Executive Officer, Peter Voser.
Board Of Directors
? ? ? ? ?
?
?
?
Jorma Ollila – Chairman Lord Kerr – Deputy Chairman Peter Voser - CEO Simon Henry - CFO Malcolm Brinded – Executive Director, Upstream Non Executive Directors ? Josef Ackermann ? Guy Elliott ? Charles O. Holliday ? Gerard Kleisterlee ? Christine Morin-Postel ? Linda G. Stuntz ? Hans Wijers ? Jeroen van der Veer Michiel Brandjes – Company Secretary
EXECUTIVE MANAGEMENT
Peter Voser - CEO
Simon Henry - CFO
Marvin Odum - Upstream Americas Director
Malcolm Brinded - Executive Director, Upstream International
Peter Rees - Legal Director
Mark Williams - Downstream Director
Hugh Mitchell - Chief Human Resources & Corporate Officer
Matthias Bichsel - Projects & Technology Director
COMMITTEES
Remuneration Committee Corporate and Social Responsibility Committee Nomination and Succession Committee
•Determine and agree with the Board of Directors of the Company - the remuneration policy for the Chairman, the Chief Executive and Executive Directors. •Monitor the structures and levels of remuneration for other senior executives and make recommendations if appropriate.
•Assist the Board of Directors of the Company in reviewing the policies and conduct of the Shell Group of Companies with respect to the Shell General Business Principles (including Sustainable Development and the Health, Safety and Environment Policy), the Shell Code of Conduct and to major issues of public concern.
•Lead the process for appointments to the Board of Directors of the Company and recommend on all Board appointments and re-appointments •Review and make recommendations to the Board on succession planning •Review and make recommendations to the Board on corporate governance guidelines.
Audit Committee
•Assist the Board of the Company in fulfilling its responsibilities in relation to internal control and financial reporting.
General Business Principles
Code Of Ethics
Values Code Of Conduct Reserved Matters
VALUES/PRINCIPLES
?
General Business Principles
?
Shell has laid down 8 Business Principles which are based on it’s core values of honesty, integrity and respect for people. They apply to all of their business affairs and describe the behaviour expected from every employee. This code is applicable for the Executive Directors and Executive VP’s with the main aim to maintain accountability and lay down responsibilities for its Addressees.
?
Code Of Ethics
?
?
Code Of Conduct
?
The Shell Code of Conduct clarifies the standards expected to be followed from employees and the behaviours to be adopted by them.
?
Reserved Matters
?
Matters related to Financial reporting and controls, Strategy and Management, Internal controls, Contracts etc are all reserved and carried out only after Board’s Final Decision and no other member of the company is allowed to directly take actions regarding them.
Shell Oil
FUTURE PLANS
FUTURE ENERGY SCENARIO
?
? ? ? ?
Global energy demand is expected to double by 2050, as the world’s population soars to 9 billion (est.) and more people gain access to energy CO2 emissions must be halved to avoid serious climate change Shell is working to help meet this challenge responsibly by delivering more cleaner and efficient energy A range of sources will be needed to meet rising global energy demand over the coming decades Renewable sources could provide 30% of the world’s energy by 2050, but fossil fuels will still meet the bulk of energy demand
MORE, CLEANER, SMARTER ENERGY
? ?
?
?
Shell is investing to help meet the energy challenges of the future – to spend $100 billion from 2011-2014 to support new energy production Entering more challenging environments to unlock new resources and boosting production from existing fields Using new technologies and an innovative approach to limit impact on the environment and finding effective ways to engage with communities near to their operations Developing cleaner energy sources like natural gas
?
?
?
Natural gas offers an affordable, environmentally acceptable and technically proven option to power and sustain people’s lives One-third of CO2 emissions come from power generation. Modern gas-fired plants produce about 50-70% less CO2 than coal-fired ones From 2012, Shell intends to produce more cleaner-burning natural gas than oil Producing biofuel from Brazilian sugar cane. This produces about 70% less CO2 than standard petrol
?
Already one of the largest suppliers of biofuels
? ?
?
Newer technology allows roads to be laid at lower temperatures, with lower CO2 emissions
SHAPING THE FUTURE OF ENERGY THROUGH INNOVATION
Meeting Demand • Using new technologies to unlock new sources of energy and squeeze more from existing resources People and Planet • Finding innovative ways to limit the impact of our operations on people and the environment and bring benefits Smarter Mobility • Finding innovative ways to help move the world’s growing number of people and goods efficiently Innovative Thinking • Sparking creative ideas to help overcome energy challenges today and for the future
SHELL OIL – LEARNING’S
? ?
?
? ?
Investing in alternate sources of energy is the step forward Transparency in the functioning of an organisation is a must – leads to economic growth and sustainable development Getting reports audited and verified by an External Committee leads to improved credibility and shareholder’s trust Shell should strive for getting into DJSI world index Looking after the local society and environment is essential for the company’s growth
Q&A
THANK YOU
doc_565833360.pptx
This is a presentation highlights on the corporate social responsibility at Shell Oil.
Corporate Social Responsibility
SHELL OIL
ABOUT SHELL
Global oil and gas company headquartered in The Hague, Netherlands with its registered office at the Shell Centre in London, UK ? Operations in 90 countries, produces 3.1 mn barrels of oil equivalent per day and has 44,000 stations worldwide ? Shell Oil Company, its subsidiary in US, is one of its largest business ? Aim is to help meet the energy needs of society in ways that are economically, environmentally and socially responsible
?
SHELL - TIMELINE
1907
• Formation of Royal Dutch Shell Group • Merger of Royal Dutch Petroleum Company (60%) & Shell Transport and Trading Company Ltd (40%) • Company commissioned eight oil tankers for the purposes of transporting oil
1919 -1921
• Took control of the Mexican Eagle Petroleum Company • Formed Shell-Mex Limited which marketed products under the "Shell" and "Eagle" brands in UK
• Shell-Mex merged its UK marketing operations with those of British Petroleum to create Shell-Mex and BP Ltd • First company to purchase and use an electronic computer in Netherlands – Ferranti Mark 1 Star 1932-1953 • Acquired the mining company Billiton, which it subsequently sold
- 1974
2004-2005
• Shell Group moved to single capital structure – parent company named Royal Dutch Shell plc • Unification completed on 20 July 2005
SHELL - OPERATIONS
Upstream
SHELL
Project & Technology
Downstream
UPSTREAM
?
?
? ? ? ? ?
?
?
Exploring for oil and gas Developing Fields Producing Oil and Gas Mining oil sands Upstream Extracting bitumen Liquefying gas by cooling (LNG) Upstream Upstream Re-gasifying LNG International Americas Converting gas to liquid products (GTL) Generating Wind Energy
DOWNSTREAM
Refining oil into fuels and lubricants ? Producing petrochemicals ? Developing Biofuels ? Trading ? Supply and Distribution ? Retail Sales ? Business-to-business Sales
?
PROJECT & TECHNOLOGY
? ?
?
Manages the delivery of Shell’s major projects Drives its research and technology development programme to create tomorrow’s technology solutions Provides technical services and technology capability to the Upstream and Downstream businesses
Project & Technology Safety & Environment Contracting & Procurement
KEY PROJECTS
TRIPLE BOTTOM LINE
Triple Bottom Line
ECONOMIC
Income - $20.5 billion Shareholders’ dividend - $10.2 billion Shell’s oil and gas production increased by 5% over 2009, to 3,314 thousand barrels of oil equivalent (boe) a day. Increased sales of liquefied natural gas (LNG) by 25% to 16.8 million tonnes
Reduced underlying costs by $2 billion
Six major projects started production in 2010
ECONOMIC
ECONOMIC
Shell Scorecard
Sustainable development (SD) accounted for 20% of Shell’s scorecard According to Sustainability Asset Management(SAM), DJSI, SD performance improved in 2010 SD helps determine annual bonus for employees and Executive Committee (EC)
However, Shell were excluded from the DJSI World Index, in view of operations in Nigeria
Greenhouse gas emissions
Water
Flaring
Environmental
Spills
Energy efficiency
ENVIRONMENT
?
Greenhouse Gas Emissions
?
?
The direct greenhouse gas (GHG) emissions were 75 million tonnes on a CO2-equivalent basis in 2010,a 9% increase on 2009 Shell met the voluntary target they set in 1998 for direct GHG emissions to be at least 5% lower than comparable 1990 level
?
Flaring
?
The flaring – or burning off – of natural gas in our Upstream business rose by 32% compared to 2009, to 10.3 million tonnes of CO2 equivalent
ENVIRONMENT
•
Energy Efficiency
•
Upstream business improved its overall energy efficiency for the production of oil and gas
Operational spills of oil and oil products totaled 2.9 thousand tonnes The number of operational spills was down significantly to 193 in 2010, from 275 in 2009 products totaled 2.9 thousand tonnes Use of fresh water was up slightly to 202 million cubic metres, from 198 million cubic metres in 2009
•
Spills
• •
•
Water
•
Safety Code of Conduct violations Social investment
Training
Social
Social performance
Diversity and inclusion
External voluntary codes
Local procurement
SOCIAL
?
Safety
?
Lowest ever rate of injuries per million working hours – total recordable case frequency – down 15% from our previous best in 2009 Spent more than $121 million on voluntary social investments worldwide
?
Social Investment
?
?
Social Performance
?
Continued to implement new companywide standards for social performance in 2010 that were launched the previous year with HSSE & SP Control Framework
SOCIAL
?
Local Procurement
?
?
Almost $13 billion was spent in countries that, according to the UNDP Human Development Index 2010, have a GDP of less than $15,000 a year per person Shell companies spent over 90% of this $13 billion with local companies
?
External Voluntary Codes
? ?
Support a number of external voluntary codes UN Universal Declaration of Human Rights, the Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises, and the International Labour Organization Declaration on Fundamental Principles and Rights at Work
SOCIAL
?
Diversity and Inclusion
?
?
?
Diversity and inclusion (D&I) measured by the representation of women and local nationals in senior leadership positions By the end of 2010, the proportion of women in senior positions was 15.3%, up 1.3% from 2009 In 36% of countries, local nationals filled more than half the senior leadership positions Focus is on building technical capability and safety critical competencies and skills Provided over 375,000 training days There were 205 violations of the Code of Conduct reported (compared to 165 in 2009)
?
Training
?
?
?
Code of Conduct Violations
?
MEASUREMENT INDICATORS
SOME INITIATIVES UNDERTAKEN
?
Sharing benefits with communities
? ?
In 2010, 90% of Shell staff was nationals Nigeria : 2000 contractors in contracting process and 3000 in entrepreneurship, catering etc Paid $15.4 billion in corporate taxes $2.2 billion in royalties Collected $81 billion in excise duties and sales tax on fuel on behalf of governments Member of Extractive Industries Transparency Initiative (EITI) Pioneered LNG
?
?
Transparency in Revenue
? ?
?
?
?
Cleaner and Better sources of Energy
? ?
Led to its easy shipping around the world Capacity of 550 MW in North America
Tapping the Wind
?
?
Enhancing Oil Recovery
?
Extracting more out of the existing sources
YEAR THAT WENT PAST
? ? ? ?
Produced 2% of world’s oil and 3% of gas Sold 7.6% of world’s LNG $2.1 Bn spent on alternative energy, CCS , and CO2 R&D in last 5 years Direct Greenhouse Gas emissions increased 9% to reach 75 million tonnes in 2010
?
Flaring
?
?
? ?
Rose by 32% compared to 2009, to 10.3 million tonnes of CO equivalent 14% of our total direct GHG emissions 20% was operational flaring Remaining 80% was continuous flaring
2
? ?
80% from Nigeria 10% from Majnoon plant in Iraq
EXTERNAL REVIEW COMMITTEE
? ? ?
Sixth successive year, an External Review Committee has reviewed sustainability report Check for content, credibility and balance External Review Committee members for the Shell Sustainability Report 2010:
? ? ? ? ? ?
Rebecca Adamson, First Peoples Worldwide, USA Motoko Aizawa, Sustainability Advisor, International Finance Corporation, Japan Rafael Benke, Vale, Brazil Philippa Foster Back OBE, The Institute for Business Ethics, UK Christine Loh OBE, CEO, Civic Exchange, China Dan Sperling PhD, Director, Institute of Transportation Studies, UC Davis, USA
? ?
ERC feels that Shell demonstrates industry leadership in addressing climate change Encourages Shell to take further actions in its operations, investments and public engagements
REPORTING STANDARDS
?
Provides information to
? ? ?
Dow Jones Sustainability Indexes FTSE4Good The Carbon Disclosure Project Global Reporting Initiative (GRI) (A+ Rating) International Petroleum Industry Environmental Conservation Association (IPIECA) guidelines UN Global Compact – reporting
?
Reporting in accordance with
? ? ?
Shell Global Solutions
CHALLENGES AND OPPORTUNITIES FOR THE GLOBAL REFINING INDUSTRY
THE OGONI CRISIS AND SHELL
?
? ?
80% of Nigerian government revenues come directly from oil, over half of which is from Shell. Shell continued funding of the military in the Delta region under the auspices of "protecting" Shell from peaceful demonstrators in the village of Umeuchem . Accumulated neglect of corporate social responsibility Shell, over a significant period of time in the oil and gas rich Niger Delta region caused the eruption of 29 militancy, kidnapping and other vices in the area
THE NIGERIA’S NIGER DELTA
•
Ken Saro-Wiwa
? ? ? ? ?
Natural Gas Flaring Oil Spills Pipelines and construction Health impacts The neglect took the life of Ken Saro-Wiwa, the Ogoni activist and eight others in 1995 among many others and caused unprecedented environmental devastation in the region.
30
GOVT. SOLUTION: THE NIGERIA’S NIGER DELTA
The government of Nigeria lost revenue in excess of US$30b in 7 years due to the instability . ? Introduction of amnesty by the Federal Government of Nigeria in for some calm to return. ? A law was also enacted by the National Assembly of Nigeria to make mandatory Social Responsibility contribution of operating companies into the cleaning up and development of the region . Ogoni Bill of Rights ? clean up of oil spills ? reduction of gas flaring ? fair compensation for lost land, income, resources, life ? a fair share of profits gained from oil drilled at their expense
?
31
CHALLENGES @NIGERIA
New challenges Poor track record Corporate citizenship
Challenges @Nigeria
S
? ? ?
SPDC has contributed about $31 billion to the govt (2006–2010) The Shell Nigeria Exploration and Production Company – paid $3.8 billion as taxes Shell run operations contributed over $161 million to the Niger Delta Development Commission
?
additional $71 million - addressing social and economic development challenges in the region
?
?
?
Economic Empowerment Initiative: ? Micro-credit Prog. Launched in1998 ? assisted more than 30,000 people to establish or expand their businesses Shell LiveWIRE (2003) - Platform for youth development ? facilitate the emergence, survival and expansion of youth owned businesses ? The programme has trained more than 3,000 young people since 2003 Cradle-to-Career Scholarship Scheme -brilliant students are awarded scholarships .
?
In 2010, Shell awarded 2,730 secondary and 750 university scholarships.
?
?
Health care - SPDC currently supports 27 health facilities in the Niger Delta. In addition, served 118,000 people through mobile health outreach programmes The Project, NiDAR Plus
? ?
encapsulates HIV/AIDS activities Also includes scaling up health systems performance through an integrated multifaceted approach to health care delivery
ISSUES AT HAND
Worsening reputation • Shells reputation with regards to Sustainability / CSR is not good. After being seen as leaders some years ago they are now being perceived as just putting a lot of money in their communication
Lack of Sustainability / CSR innovation
• Over the last few years Shell have not really convinced on the content and implementation side through innovation at all. This might be the consequence of not being leaders anymore combined with a lack of aspiration for bringing their reporting and best practice onto the next level. Perceived indifferent corporate culture
• The corporate context and culture itself at Shell does not fully go hand in hand with their Sustainability / CSR messaging .
TAKING ACTION
• Integrity, honesty and respect . These values are the foundation of Shell’s code of conduct, and are in line with the business principles set out by the United Nations Global Compact (UNGC) and the OECD guidelines for multinational enterprises. • General Business Principles, standards, anti-corruption principles, values and initiatives, through regular training , induction programs • Shell General Business Principles through making staff aware of its operations and activities through clear guidelines. • Shell devised a document for management to identify ethical dilemmas and corruption
Core values
Communication
• Shell co-operates closely with NGOs, industrial organisations and international bodies to tackle collectively the problem of corruption. It has signed up to international agreements-
Policies and initiatives
Reporting
• Shell has made strategic changes to its business model, supply chain and operations, in order to incorporate strong principles of transparency, anticorruption and business responsibility.
Corporate governance is the set of processes, customs, policies, laws, and institutions affecting the way a company is directed, administered or controlled
Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
?
?
For Shell
“Corporate governance affects the way we direct our company and the relationship we have with interested parties. We believe that the highest standards of corporate governance are essential to our business integrity and performance.”
?
Structure
COMMITTEES
LEADERSHIP
ARTICLES OF ASSOCIATION
VALUES
LEADERSHIP
?
Royal Dutch Shell has a single-tier Board of Directors chaired by Jorma Ollila. The executive management is led by Chief Executive Officer, Peter Voser.
Board Of Directors
? ? ? ? ?
?
?
?
Jorma Ollila – Chairman Lord Kerr – Deputy Chairman Peter Voser - CEO Simon Henry - CFO Malcolm Brinded – Executive Director, Upstream Non Executive Directors ? Josef Ackermann ? Guy Elliott ? Charles O. Holliday ? Gerard Kleisterlee ? Christine Morin-Postel ? Linda G. Stuntz ? Hans Wijers ? Jeroen van der Veer Michiel Brandjes – Company Secretary
EXECUTIVE MANAGEMENT
Peter Voser - CEO
Simon Henry - CFO
Marvin Odum - Upstream Americas Director
Malcolm Brinded - Executive Director, Upstream International
Peter Rees - Legal Director
Mark Williams - Downstream Director
Hugh Mitchell - Chief Human Resources & Corporate Officer
Matthias Bichsel - Projects & Technology Director
COMMITTEES
Remuneration Committee Corporate and Social Responsibility Committee Nomination and Succession Committee
•Determine and agree with the Board of Directors of the Company - the remuneration policy for the Chairman, the Chief Executive and Executive Directors. •Monitor the structures and levels of remuneration for other senior executives and make recommendations if appropriate.
•Assist the Board of Directors of the Company in reviewing the policies and conduct of the Shell Group of Companies with respect to the Shell General Business Principles (including Sustainable Development and the Health, Safety and Environment Policy), the Shell Code of Conduct and to major issues of public concern.
•Lead the process for appointments to the Board of Directors of the Company and recommend on all Board appointments and re-appointments •Review and make recommendations to the Board on succession planning •Review and make recommendations to the Board on corporate governance guidelines.
Audit Committee
•Assist the Board of the Company in fulfilling its responsibilities in relation to internal control and financial reporting.
General Business Principles
Code Of Ethics
Values Code Of Conduct Reserved Matters
VALUES/PRINCIPLES
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General Business Principles
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Shell has laid down 8 Business Principles which are based on it’s core values of honesty, integrity and respect for people. They apply to all of their business affairs and describe the behaviour expected from every employee. This code is applicable for the Executive Directors and Executive VP’s with the main aim to maintain accountability and lay down responsibilities for its Addressees.
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Code Of Ethics
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Code Of Conduct
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The Shell Code of Conduct clarifies the standards expected to be followed from employees and the behaviours to be adopted by them.
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Reserved Matters
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Matters related to Financial reporting and controls, Strategy and Management, Internal controls, Contracts etc are all reserved and carried out only after Board’s Final Decision and no other member of the company is allowed to directly take actions regarding them.
Shell Oil
FUTURE PLANS
FUTURE ENERGY SCENARIO
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Global energy demand is expected to double by 2050, as the world’s population soars to 9 billion (est.) and more people gain access to energy CO2 emissions must be halved to avoid serious climate change Shell is working to help meet this challenge responsibly by delivering more cleaner and efficient energy A range of sources will be needed to meet rising global energy demand over the coming decades Renewable sources could provide 30% of the world’s energy by 2050, but fossil fuels will still meet the bulk of energy demand
MORE, CLEANER, SMARTER ENERGY
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Shell is investing to help meet the energy challenges of the future – to spend $100 billion from 2011-2014 to support new energy production Entering more challenging environments to unlock new resources and boosting production from existing fields Using new technologies and an innovative approach to limit impact on the environment and finding effective ways to engage with communities near to their operations Developing cleaner energy sources like natural gas
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Natural gas offers an affordable, environmentally acceptable and technically proven option to power and sustain people’s lives One-third of CO2 emissions come from power generation. Modern gas-fired plants produce about 50-70% less CO2 than coal-fired ones From 2012, Shell intends to produce more cleaner-burning natural gas than oil Producing biofuel from Brazilian sugar cane. This produces about 70% less CO2 than standard petrol
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Already one of the largest suppliers of biofuels
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Newer technology allows roads to be laid at lower temperatures, with lower CO2 emissions
SHAPING THE FUTURE OF ENERGY THROUGH INNOVATION
Meeting Demand • Using new technologies to unlock new sources of energy and squeeze more from existing resources People and Planet • Finding innovative ways to limit the impact of our operations on people and the environment and bring benefits Smarter Mobility • Finding innovative ways to help move the world’s growing number of people and goods efficiently Innovative Thinking • Sparking creative ideas to help overcome energy challenges today and for the future
SHELL OIL – LEARNING’S
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Investing in alternate sources of energy is the step forward Transparency in the functioning of an organisation is a must – leads to economic growth and sustainable development Getting reports audited and verified by an External Committee leads to improved credibility and shareholder’s trust Shell should strive for getting into DJSI world index Looking after the local society and environment is essential for the company’s growth
Q&A
THANK YOU
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