Task 2: Business Submission Communications in Businesses Chevron Submission to Local Network Ronald Ajax 12344321 Bentley Campus Semester

1, 2012 Tutor: Davor Meersman

CONTENTS
Our Global Commitment........................................................................................page 2 Recommendation 1.............................................................................page 3 Recommendation 2.............................................................................page 4 Challenges...........................................................................................page 5 A Success Story...................................................................................page 6 References...........................................................................................page 7

" If we prove that it makes good business sense not just to be socially responsible, but to

Recommendations to The Local Network

Our Global Commitment At Chevron, we have made it a central part of our creed to actively protect the people and environment that have allowed us to experience great success and growth (The Chevron Way 2012). To legitimise this corporate commitment we have been an active member of the United Nations global Compact, and have been internationally recognised by ethical investment group Ceres as leading the way for social and environmental performance in the oil industry (Baker 2006). Though, we at Chevron recognise that there are still many changes to be made and initiatives implemented among us and our local network, if we seek to optimise our compliance to the principles of the global compact. This report will outline various recommendations that we believe will help our local network comply to principles one and eight. Principle 1: "Businesses should support and respect the protection of internationally proclaimed human rights." (The Ten Principles/ Principle 1 2012). Principle 8: "Businesses should undertake initiatives to promote greater environmental responsibility." (The Ten Principles/ Principle 8 2012). We have reviewed our operations in these fields and have two recommendations for further compliance to principle one and eight. 1. Creation of a standardised set of guidelines for 'triple bottom line' reporting, and a database of those results that can be accessed by all stakeholders 2. Formation of specialised panel of experts to guide companies toward creating a 'net environmental benefit

Recommendation 1
Recommendation 1 We have made a commitment to increasing the transparency of our corporate social responsibility (CSR) performance through the practise of triple Bottom line reporting. This means that we not only report on our financial results, but also our social and environmental performance. This is observable in our CSR reports, which have been implemented by more than 3000 companies around the world. It outlines both a quantitative and qualitative analysis of a companies upkeep of human rights and environmental performance (for examples and more information, see Chevrons 2010 CSR report). We have learnt from this practise that implementing this type of reporting has raised the legitimacy of our companies CSR claims, raising the respect and profile of our company, while helping to attract those seeking ethical investment (Ernst & Young ltd 2011). Though, we have also identified that there is only a limited set of guidelines for how to record and present our CSR performance, and a lack of a system to compare CSR performance to other companies. From these lessons we have constructed the following recommendation for the local network. The Creation of a standardised set of guidelines for triple bottom line reporting, arbitrated between business leaders, accountants, and special interest groups. Also the formation of an accessible database for the results of these reports that can be accessed by all stakeholders Benefits And Implications Society: With the transparency of standardised CSR results, one could easily compare the performances of different companies; creating a competitive environment that would promote CSR policy and attract ethical consumers. Investors: With ethical investors choosing to invest in companies that are a positive force for society, standardised reporting would enable investors to easily find companies with high performance. This would lead to a higher stock price for the company. Employees: Higher retention rate of employees who are able to see the fruits of their hard work and initiatives in the CSR reports. Can also help to attract and maintain multicultural employees who seek companies that are demographically diverse. A set of standardised guidelines would make it easier for all accountants to create triple bottom line reports.

Recommendation 2
Recommendation 2 Chevron has implemented the practise of ensuring its capital expenditure projects are environmentally friendly and aim to receive a 'net conservation benefit', in which environmental concerns are met and subsided throughout every turn of a project (Australian Business Journal 2011). This means that Chevron balances out its environmental impact through a strong conservation effort. An example of this practise is the multi-billion dollar Gorgon gas project, set up on the West Australian nature reserve of Barrows Island. The island is of spiritual significance to local indigenous people, and is home to unique fauna and flora native to the island. To achieve a 'net conservation benefit', we have spent up to $150 million on conservation initiatives to protect the species that live on the island. We will also greatly reduce our carbon footprint from the gas field by collecting emissions and injecting it deep into the ground. We have identified that by taking a strong conservation stance, we have been able to quell the concerns of environmentalists and avoid government environmental legislation from blocking our expansion. We also embraced guidance from Australian environmentalist Dr Harry Butler and numerous conservation group, leading to better environmental initiatives. From the lessons learnt through the 'net conservation benefit' initiative we have devised the following recommendation, as a extension of our practise. Establish a specialised panel of experts to monitor and guide capital expenditure projects help ensure a net conservation benefit is achieved. This would entail constructing a panel of businesses leaders, environmental scientists and special interest groups to guide the environmental commitments made for a project. Benefits And Impact Environment: Environmental destruction is limited and local fauna and flora are conserved, while lowering the risk of future environmental legislation. Local community: The panel can assure that the sensitive cultural needs of the local people are met and avoid alienating them from employment opportunities. Shareholders: By laying the ground work to avoiding any environmental calamities, the company can protect themselves from any future legislative or financial repercussion that would hurt profits. By quelling the concerns of special interest groups in society the companies public image is increased

Challenges Developing and implementing the outlined recommendations will be a challenging task and require collaboration between business, accountants and social bodies. To develop a standardised CSR report format and its complementary database, input would be needed from accountants from all industry as all the different components of CSR can be mutually exclusive to different businesses. Also, the systems needed to monitor environmental performance are expensive to set up, and many smaller companies may ignore participation due to seeing a limited benefit from the venture. Similarly companies may choose to ignore creating a net conservation benefit as they see the cost as to much of a risk. Though recommendations are not legally binding and a company can choose not to participant freely, loosing the long term benefits to be had. A Success Story We at Chevron have an intrinsic responsibility to the people and environment that sustains us. We have continued to support and comply to the principles of the global compact, and believe the recommendations made will be the next step in ensuring that our local network continues to uphold the social contract we have with our stakeholders. By creating smart and credible CSR initiatives both our business and society will benefit, continuing our success story. References Australian Business Journal. 2011. The Gorgon LNG Project - The Australian Business Journal. http://www.australianbusinessjournal.com.au/the-gorgon-lng-project/. Baker, David. 2006. Quest for Clean Energy <BR> Chevron, PG&E Cited for Positive Steps to Combat Global Warming. www.SFGate.com. http://www.sfgate.com/cgi-bin/article.cgi? f=/c/a/2006/03/22/BUGKPHRTJ71.DTL. Ernst & Young ltd. 2011. Seven Things CEOs and Boards Should Ask About Climate Change Reporting - Ernst & Young - United States. http://www.ey.com/US/en/Services/SpecialtyServices/Climate-Change-and-Sustainability-Services/Seven-things-CEOs-and-boardsshould-ask-about-triple-bottom-line-reporting. Tex Gunning via Gaiam Inc. 2011. Quotes About Corporate Social Responsibility. http://blog.gaiam.com/quotes/topics/corporate-social-responsibility. The Chevron Way. 2012. The Chevron Way | About Chevron | Chevron. http://www.chevron.com/about/chevronway/. The Ten Principles/ Principle 1. 2012. Principle 1. http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle1.html. The Ten Principles/ Principle 8. 2012. Principle 8. http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle8.html