Environmental Engineering Reference
In-Depth Information
and political contexts, in particular related to the
timing of societal concern for climate change, the
corporate reactions and interactions with stake-
holders, including NGOs and policymakers. In
particular, whereas public concern emerged more
rapidly in the US than in Europe, the industry got
tensed and formed an issue-specific association to
lobby against any regulation attempt, with Exxon
Mobil an illustrative example. In Europe, under an
increase of social awareness, BP and Shell have
felt enhanced pressure from their stakeholders,
leading these companies to withdraw from industry
coalitions against climate change. In general, these
companies have adopted a more cooperative ap-
proach with their stakeholders than Exxon Mobil.
Another difference is the emergence in Europe of
a compulsory regulation on climate change, as a
declination of the strategy to meet Kyoto Protocol
targets. As a consequence, since 2005, a significant
perimeter of activities of oil companies present
in Europe is submitted to compulsory emission
reduction targets (refineries are including in the
European Emission Trading scheme).
Economic and market position influence also
the way oil companies will tackle environmental
issues. Exxon capacity to implement a restructur-
ing model, based on cost reduction, efficiency
and shareholder value models, led the company
to benefit from high return on capital, creating
little incentive to shift from the initial strategy.
The more difficult situations experienced by
companies like BP and Shell might have created
the opportunity to shift their market orientation.
There are two distinctive trends located at both
ends of the spectrum:
•
Exxon Mobil maintained a strong lobby
against any mandatory target, pledging
that there was no scientific evidence of cli-
mate change, whereas mitigation measures
would be prohibitive. In the early 2000s
the company ended up with recognising
some scientific basis to climate change,
however it did nothing to reverse the strat-
egy orientation focused on its original core
energy and petrochemical business.
The Impact of the Long-Term
Vision on the Environmental
Strategy Design
Comparing the case of Total and BP illustrates two
distinctive apprehensions of the oil future and the
need to revisit corporate strategy in the view of a
transition to a low carbon economy:
The BP's approach to climate change was
pushed extremely proactively as soon as the com-
pany publicly acknowledged the need for precau-
tionary action to climate change. The declination
of a green strategy relied on two key pillars:
•
the leadership culture, particularly embod-
ied by the CEO John Browne, as regards
environmental responsibility;
•
the traditional Health, Security, Safety and
environment culture, as a core value of BP.
John Browne introduced and developed the
alternative energies theme in BP following his
conviction that climate change and energy security
will constitute the two main challenges faced by
the oil industry in the future. Illustratively, the
company name was turned into “Beyond Petro-
leum”. The vision of John Browne at BP was
indeed to consider alternative energies as a new
market opportunity that may grow over time to
constitute a significant share of the business on
the longer term, along with traditional petroleum
activities. He had the vision that energy transition
•
Companies like BP and Shell adopting a
first-mover attitude. BP quitted the Global
Climate Coalition
11
(the most powerful
lobby organisation against climate change)
in 1996 and adopted by then a proactive
strategy to diversify activities (including
investments in renewable energies).
