Answer 2 Questions 250-350 words each and 2 Responses

1.

As a socially responsible Shell shareholder, it would be in my best interest, and in the interest of the Earth, to ensure their mission is enacted in a sustainable manner.  The Triple-Bottom-Line approach to Corporate Social Responsibility teaches that we must keep three elements in mind: profit, people, and planet.  I love the triple-bottom-line philosophy because it covers a good deal of surface area with respect to: preserving the planet, satisfying the needs of people, and ensuring profitability.  All three elements must be kept in a relatively balanced weight, otherwise its usefulness is nominal in nature only, and not in essence.  John Elkington coined the phrase in 1994, and “A key challenge with the triple bottom line, according to Elkington, is the difficulty of measuring the social and environmental bottom lines, which necessitates the three separate accounts being evaluated on their own merits (Investopedia).  The main problem with keeping a corporation’s culture fixated on profit, people, and planet equally is that it’s not as easily quantifiable to pin down social effects and relative preservation practices.  I believe it all ties together, because positive social and environmental policies, while admittedly not easily measured, come back and lead towards better profits down the line.  Integrating these key issues into corporate governance will ensure less accidents happen which can damage a company’s brand. 

            In their own words, Shell’s sustainability approach is thus, “We are committed to protect the environment, respect our neighbors, cause no harm to people, and help the world move towards a lower-carbon future” (Shell.com).  As a socially responsible shareholder, I would ask for complete revenue transparency, and urge them to seek out new innovations and R&D in renewable energy sources to maintain a long-term competitive edge in the fuel industry. 

Oil companies may indeed stay afloat and even reap a bounty over the short-term in profit margins, while ignoring the social and environmental effects they have sown.  The thing that corporate executives need to understand, which some seem to, and some seem to not, is that sooner or later their reputation will plummet, or worse.  Worst case scenario would be as in the case of the BP Deepwater Horizon oil spill in the Gulf of Mexico.  Investments need to be made in preventative measures to ensure that never happens again. 

I understand things from the view of the big oil guys.  They want a steady flow of profit, and they rightly justify what they do because the world’s population is indeed expanding, and many in developing countries require the infrastructure and power to operate in the modern age.  They argue that we must balance our moral obligations of providing energy access to all, and in combating climate change.  I say that an energy company such as Shell needs to be held to an even higher standard than other companies, due to their niche in the fossil fuel industry, the source of humanity’s carbon footprint on Earth.  Shell and similar companies need to end the lobbying which puts profit first ahead of people and the planet. 

The textbook discusses ethics in chapter 4, “consider the case of foreign oil companies in Nigeria.  Pollution controls applied by foreign companies in Nigeria were much laxer than those in developed nations…a tragedy of the commons becomes applicable in such cases” (128).  The book also mentions controls and incentives (368) in chapter 11.  Enacting incentives by governments onto big oil companies could help to stave off over-exploitation, which would help to slow down the acceleration of climate change. 

We must acknowledge that we humans aren’t the center of the universe, and that finding sources of energy, whether it be through ethanol in Brazil or elsewhere, shouldn’t come at the expense of native species’ habitats.  We are indeed going to be responsible for the next global mass extinction because we haven’t learned to respect nature’s finite supply of resources, furthering habitat destruction and climate change.  (nationalgeographic.com) Energy companies like Shell are a necessary evil I’m afraid.  We need petroleum and other energy sources, but we must be cognizant to balance our needs with that of the planet. 

 

http://www.investopedia.com/terms/t/triple-bottom-line.asp

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https://www.theguardian.com/environment/2015/may/17/shell-climate-change-rhetoric-the-real-story

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http://www.shell.com/sustainability/environment/our-approach-sustainability.html

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http://news.nationalgeographic.com/news/2014/05/140529-conservation-science-animals-species-endangered-extinction/

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2. 1) As a socially responsible Shell shareholder, it is my responsibility to keep Shell’s brand name and profit margins in my best interests. From past experience, from both an economic standpoint as well as a political standpoint, transparency is key. The worst possible course of action for Shell would be to try and hide their actions and the effects of their production of sugar cane from the general public. If we’ve learned anything from the recent presidential race as well as corrupt organizations such as FIFA, nothing will stay secret forever no matter how deeply it is buried. In 2015, many FIFA executives were charged and indicted with racketeering, fraud, and other offenses. This uncovered a long history of taking bribes for granting broadcasting rights for games and hosting rights for events like the World Cup. My point in mentioning transparency is that it is always the best course of action when trying to maintain a brand name.

Perhaps the Corporate Culture, as described on page 511, of Shell needs to be analyzed in order to determine how to proceed with this issue. Corporate culture is defined as an organization’s norms and value system. As a socially responsible Shell shareholder, I’d implore Shell to realign their business strategies to appeal more to the environment and the people that they are directly affecting. One way Shell can accomplish this task to appeal to the masses is through investing in research towards new environmentally friendly ways of producing sugar cane. Investing in new technology that would make the manual labor for this monocrop less demanding, and would save the company money in the process of doing so. Also, even though the bi-products of sugar cane are economically friendly, the inputs are not. Shell is directly fueling the fertilizer industry, which destroys biodiversity and pollutes the air. Innovations towards utilizing eco-friendly fertilizer, or even taking steps in the right direction, would reflect very positively on Shell as a company.

One way that Shell can realign their corporate culture is through implementing a sense of Global Learning. Global learning, as mentioned in Chapter 14 on page 458, refers to the idea that valuable knowledge does not reside solely in the firm’s domestic operations. For example, the Colombian Agricultural Institute has 110 different types of bio-fertilizer that could be utilized by Shell’s sugar cane production. Nubia Moreno, a professor of Universidad Nacional de Colombia states that: “Helping crops to improve their productivity to accomplish the objective of feeding thousands of people in the world, without damaging the soil and the habitats, is possible with the organic products obtained from microorganisms or biofertilizers that can be easily used in farming.” Implementing bio-fertilizer through global learning would have a very positive effect on Shell’s brand name and reputation, while saving the planet at the same time.

http://www.bbc.com/news/world-europe-32897066

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http://www.unperiodico.unal.edu.co/en/dper/article/bacteria-to-produce-clean-fertilizers-are-found.html

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2) I believe that the best course of action to take when handling criticisms is to own up to your mistakes and convey a positive message about the future of the company. Whether they like to believe it or not, energy companies rely on their brand name and their customer’s perspective of the company in order to maintain their profitability. When conveying their message to the public, it is essential to acknowledge the problems that are present within their production of energy, such as environmental and human rights concerns, and express how Shell is proactively working to mitigating these concerns.

A concept called Strategic Commitment is mentioned in chapter 12 on page 401. Strategic commitment is the decision that has a long-term impact and is difficult to reverse. In order to satisfy the critics’ concerns, Shell must inevitably invest in a strategic commitment to handle the environmental and human rights concerns that are present. For better or for worse, a change is going to be required for the organization as a whole if they wish to maintain their brand name. A specific example of Shell entering a strategic commitment would be to invest in bio-fertilizer, even though it is more expensive than regular fertilizer. The short-term costs will fall, but in the long run, Shell will prosper by appealing to the critics.

Another important term that is relatable in Shell’s situation is Moral Hazard, mentioned in chapter 10 on page 349. A moral hazard is the concept that people or an organization act recklessly because they know they will be bailed out if things go wrong. Whether the realize it or not, Shell has been a moral hazard because they are abusing the fact that energy is an essential commodity to the general public. They are operating under the belief that no matter what criticism comes there way, such as environmental or human rights concerns, they will continue to profit because the consumer will continue buying their product. This action is incredibly immoral, and Shell needs to understand their position that they aren’t “untouchable” and they need to address the concerns of the critics.

Ultimately the best way to answer these criticisms are to acknowledge them and follow up with the progress towards handling the concerns. Investing in research towards technology that would appeal and abide by human rights beliefs would be a giant step in the right direction for Shell. Also, tackling the environmental concerns would be a long a strenuous journey, but I’m sure the brand name would maintain its popularity if the consumers knew they were proactively working to mitigate the harmful environmental effects. This course of action would help answer the critics’ concerns and would get them off Shell’s back, so to speak.

https://ccrjustice.org/home/get-involved/tools-resources/fact-sheets-and-faqs/factsheet-case-against-shell

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