The concept of sustainability is rising factor in the current context as it mainly focus on the improvement of the individual performance of the company in relation to the contribution that the company wishes to submit in to the future. Therefore the individuals are expected to make the best use of what is possible of the resources available which is adding value to the company as well as to the society. The following report is based on the British Petroleum and about their sustainable programmes which they have got successful and which have not.
It is a government who develops the sustainable plans for an industry in which they define the needful and the boundaries for the sustainability. Therefore the industries are expected to follow the needful guidelines in order to complete a satisfying effort. According to the UK legislative principles the following is expected to achieve. There are two major subheadings which derive the rest of the basis for the sustainable development.
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The first element is the Living within Environmental limits. This is where the individuals are expected to respect the boundaries of the environment, resources and the diversity. One must know that there is a significant need for the improvement to the limited environmental resources as well. These aspects must be in line to what is expected by the future generations as well as the current lives and the sustainability should not impair neither the current life nor the best practises of the society. On the other hand ensuring a strong, healthy environment is another vital concept for the sustainability. This is where the companies are expected to remember that meeting diversified and versatile needs of the individuals must be met while keeping a good solid platform to the future communities.
The above two pillars are the foundation for the following concepts. The achievement of a sustainable economy is a vital factor for any company. This is where the companies are expected to act in a manner which will reduce the social and economic issues within the society and is expected to generate more productivity as well as more opportunities for all. Also the companies are expected to use the innovation of the science technology for the sustainability. Companies are expected to utilise this policy in order to make the combination even more better in the areas of uncertainty whether or not to utilise their precautionary actions. Also the companies are expected to promote the good governance within their managerial grid. People in the society should be heard prior to the execution of the desired plans of the individual. Once the theories under control, the theory should be match with the British Petroleum's scenarios.
It must be remembered that the British Petroleum is in to the excavation of the oil mainly and that raises special issues. The first issue with regard to the sustainability, the oil resource which is scarce at its best, British Petroleum must make sure that they do not over use but make it more convenient where the future consumption will not be a rising issue. It has been rising issue for the Angola operations where the company had to adjust themselves to the rising Governance challenges as the Angola was ranked almost proving to be a master in the Bribery and Corruption. In a country with such level of corruption, expanding their operations was a big issue they are having even up to now. As mentioned earlier it is a big area that they must get right in the area of sustainability where they must not over feed the giants of the country but rather make it even, the cash flow and the benefits.
The stakeholder management was a major issue British Petroleum faced specially in the Gulf Region when they were operating at a high level. The pressure groups made a huge noise against the company as the water levels on the Gulf region was an issue. It was the management of the British Petroleum stood at the problem and solved the most. This is a major issue arise when the British Petroleum looks to expand their operations in a region. This is due to the sustainable issues that the pressure groups are forecasting which could take place with the excavation of the natural resources which could lead to sustainable issues specially the environmental issues. Therefore the current Oil companies are faced with this issue.
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The lack of innovativeness to the excavation process is a major issue as there limited amount of oil resources are left and there is a lesser amount of substitutes to the excavations. As per the graph below it is easy to understand that the innovation to the usage must be in a way which will enhance the utilisation.
Figure 1: Oil availability'
Source: BP and Exxon Mobil
Legislation, regulations and guidance to the sustainability
The legal requirements should be matched by any firm if they are to successfully sustain in the market. One common scenario which devastated the British Petroleum was the Oil spill which caused a too many issues to the company leading to even losses to their brand reputation. Therefore coping up with the environment as well as sticking to the legislative requirement is a major requirement for the British Petroleum as the company is already damaged because of the oil spill.
The legislative act on the Carbon Reduction Commitment (CRC) is a major step that the british petroleum must be alert of. This is the proposed compulsory trade schedule which is established to limit the emission through giant yet energy focused companies fall outside the agreement for the Climate Change summit and the European Union ETS regime. If a company is having an electricity bill which is exceeding the £500,000 per annum. The CRC will apply compulsory for those trading organisations and this contributes directly to the energy consumption energy policies consisting a more managed path towards the carbon reduction and reduction of the reliance of the excavated energy. This is a must applying source for the industries as the British Petroleum is currently matched that electricity consumption as well as the company is in to the trading of the resources which are being taken out (excavated) from the land. Therefore the company has to be very much careful with their operations with regard to the energy generation. The CRC committee will make the equation more difficult for the British Petroleum as the CRC reqires the best cost effective methods to add up to the company and the CRC will require an interaction between these corporations where the shared knowledges can be effective for the company. This effort has effectively commenced from the beginning of the 2010 April.
The post-Kyoto Protocol was another obligation that British Petroleum and this was adapted to the global legislation in 2009 at the United Nations Climate change conference. The main link which British Petroleum has with the post-Kyoto Protocol is that since the post-Kyoto Protocol requires a safer approach to the afforestation and a helping hand to them. But by large, the emission has to be within the frame and the forests must not get harm. This is a special scenario as the emission does not directly harm the forests but with the level of rain reduction this tends to get affected. The Energy act 2008 is another factor which links to the obligation schedule. In this, the main idea is to preserve the energy sources to the future. Even though the sustainability is all about preserving something for the future, according to this act it is easy that the current generations are likely to get affected as well. Therefore the current level of consumption especially with the use of crude oil is being monitored. Also the off shore Gas supply infrastructure is another angle buckled up with this act where a regulatory framework is in apply for the private sector companies such as British Petroleum.
The energy consumption act 2008 was a commission which was made on the preservation of the energy which is an important aspect of the sustainability. Since the current global market is facing the issue of the energy sustainability, this summit has a big impact over the British Petroleum. The main reason is that the company currently is in to the consumption as well as the generation of the energy. Therefore the British Petroleum has to maintain their policies in relation to the requirements of the act. The off shore supply of gas is another mandatory requirement which is needed by the legislation as the company is currently in to the supply of gas to different areas of the planet. It is another requirement that the act requires the private sector companies in to the manufacture of the gas to be a part of this act. There are evidences that British Petroleum is in to the CCS (Carbon Capture and Storage). Therefore the act wants the company to apply their focus more towards the CCS projects through a licensing procedure from the power generation.
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The Renewables obligation (RO) is not exactly within the radar of the obligation list of the British Petroleum but even then being on the corner, BP is required to license their supply of energy specially which are derived of renewable sources. According to the analysis the level of contribution is expected to rise from 9.1% to 15.4 by the end of 2015. The British Petroleum is therefore expected to contribute to be act which will enhance the sustainability of the Gas and energy consumption. The planning act 2008 is also another legal framework which will improve the energy contribution from the mass scaled projects. Since this is a national concern as this enhance the national infrastructure especially in the under developed countries where the crude oil is picked. The key expectations of these projects are that the cost, time and uncertainty can be minimized through this effort. The climate changing act is another act which British Petroleum must pay their attention on as this mainly targets the reduction of Co2 Emission by a significant 8-% by2050 and by a 26% by 2020.there are five year budgets which are applied to the company from where they must take actions to reduce their consumption of the CO2. Therefore the sustainability is a rising factor for the British Petroleum. Therefore the company is bounded to settle the legal requirements.
Improvements to the Sustainability
Evaluating the performance of the contractor is a one improvement which the British Petroleum has generated over the last few years. The set of external auditors are engaged to carry out this mode for the British Petroleum. There are un informed and executive visits in order to visualise the real picture of the suppliers. According to the Ernst & Young, the quality and the assurance partner for the British Petroleum comments that they are in to the Auditing of the suppliers then and there possible. Therefore the technical feasibility and the quality for the energy as well as to cope up with the legislative requirements this is a vital factor. The current safety and operating segments backs up the contractors' assurance throughout the British Petroleum and the British Petroleum has now taken steps to expand their outlook towards this supply management area in order to maintain better sustainability of the supply towards better goals. For this task currently British Petroleum has a 20 odd set of auditors as well as nine consultants by the March, 2011. The company has expanded this effort in to the sea operations as well as subsea operations.
In 2011, the senior operational managers and executive staffs have spent 22days each for checking the supplier standards as well as the conformance of those. Those officials are also spending a greater amount of time with the front line operational staff in order to ensure the safety as well as to negotiate the issues they are finding. The officials are spending their time at the ports of the United States, Trinidad and Tobago, Azerbaijan, Angola, the Northern Sea, Oman, and Egypt and to Brazil. The level of intervention with the British Petroleum is at a high level as they are willing to overcome the technical as well as managerial shortages. The most visible example for the need of better supplier effort is at the strategic review in 2010, British Petroleum advised few suppliers to maintain their work level to a level or otherwise the company will exercise their powers over the suppliers. With this effort the British Petroleum was able to reduce their company labour injury rate in 2011 to 1.1 from 2.9 in 2010. Therefore this supplier relationship was a difficult task yet the company has resulted favourably from that.
Also the company day away from work frequency which is indicating how much the employees are working within the company has improved from 1.9 in 2010 to 0.8 in 2011. Therefore many contractors of British Petroleum is expecting the same treatment from the company. The British Petroleum is also expecting the contractors perform well and in case the merger with the company can void. The penalties for the company would be that the from their bid lists in the tender procedures whom are having issues to their pedigree. Therefore the company is not reluctant to pause or shutdown the relationships if they feel that the continuation of the mutual trust is under threat. Back in 2011, the company has taken steps to pause the partnership which British Petroleum had with the supplier of the blow out preventer system. As per the company, this is a major step as the system could have negatively affected the company. Therefore the British Petroleum has paused the agreement until the audit procedures proved that the issues are not threatening.
Also the British Petroleum is aiming to improve the performance of the companies, especially those who are having issues with their current practise. Then and there the issues are arising, the British Petroleum aims to interfere their issues and mitigate those issues. Thorough all this supplier and the contractor practises the British Petroleum aims to fulfil their requirements and to be more productive with lesser harms to the nature. Apart from the testing of the suppliers, the machinery is also heavily under the supervision. This is a main result of the Oil spill occurred and that led the company to double their loss. Therefore the company currently review and examine North America, North Africa, the Gulf of Mexico, the North Sea, Canada, Angola, Brazil and Asia Pacific. Those assessments are audited with the purpose of preventive production. British petroleum has also created new relationships with different contractors which are contrasting to their capacity and the behaviour. Therefore the company has extended their best practises with the supply function management. Having looked at the overall performance of the company, the Supplier management has resulted few benefits with a considerable amount of concerns. Therefore the company is expecting to merge with the boost and radical changes to the supply chain management.
This is another concept which British Petroleum is aiming to satisfy as the company is currently experiencing in the effects of the learning curve. This is not a radical or a drastic change, but the cut down of the waste, removal of the Idle Time and also the improvement of the energy production is a must. Since the company is in to the consumption of the energy sources for the production of the oil needs of the Globe, the company has the right to maintain the industry practises. Therefore together with the legislative concepts, the company specially targets the future estimations to the energy consumption. Also the level of the company innovations is a vital factor. Especially with the establishments to the current policies as well as the labour productivity has increased rapidly throughout the history.
Environmental Management Standards
Having discussed the innovative approaches to the sustainability, the next best alternative method available for the industries especially who are in to the excavation of the resources. One must understand that the level of environmental threat that these oil companies are posting to the environment is immense. Therefore the industries are mainly looking to consume the facilities available and the resources at a rapid phase. Therefore the needs of the proper management especially for the environmental sustainability for the future generations are a must. Therefore the oil companies such as British Petroleum must adopt the environmental management methodologies in order to prevent the mis use of those methodologies.
Most of the firms are faced with the issues of surviving in the international market while they also have to face with the environmental laws which are varying from country to country. As a solution for this matter the International Organization for Standardization (ISO) 14000 series is being addressed as it is consisting of environmental laws and regulations which are the same for all the countries in the world.
ISO 14000 is about international standards on environmental management. It includes the details about the development of an environmental management system and the supporting audit program. This is mainly a result of the environmental summit named RIO which was held in 1992. Factors relating to the developing global market place led the ISO 14000 international Environmental Management Standards to be developed. With the increment of the industrialization within the countries, the citizens and their government's raised their voices about the environmental impact due to industrialization. The sustainable development was developed after wards. ISO 14000 is designed to reduce the damage on the environment through industrial waste. The objective of having these set of guidelines is to present some practical and useful tips and tools for the businesses looking to reduce their environmental impact and to improve their environmental performance. The 14000 Standard series include the standards such as 14000, 14001,14004,14010,14011 and 14012. A company should fulfill several requirements before adopting ISO 14000 in to it. A company should create an environmental Management System which is called an EMS, They should show their obedience to the environmental statutes and regulations observed in their organization according to the countries their companies are situated at. One other requirement needed is to prove their dedication for continuous improvement in environmental protection and pollution prevention.
Within the last twenty years time, due to the severe damages happened to the environment because of the industrialization of the countries, environmental awareness has become an important issue among industrialized countries. Therefore the need of a change in the industries in order to reduce acid rains, ozone depletion was becoming a very important thing. ISO 14000 series was the answer for this environmental regulation confusion. These set of international standards ensures the protection of the environment, persuading a safer and non-polluted and healthier world for all of the living beings. As at the present many countries are attempting to come up with their own environmental protection plans, a single common standard guarantees that there will be no confusions between nations and countries. ISO 14000 environmental standard registrations would be an essential thing to carry on a business in many industries in order to compete in the global marketplace as it outshines the ethical reasons for environmental management in an organization.
ISO 14001 is the internationally recognized standard for environmental management of a business while being the most important standard within the ISO 14000 series. ISO 14001 standard is based on the cycle of plan, check, do, review, improve. This is an environmental policy which pressurizes the organization for continuous improvement which it can be applied on to both small and large organizations. ISO 14001 denotes a basis of control for an environmental management system where a third party involvement is not required. This standard deals with different kinds of environmental regulations while they first became popular in Europe. All these rules and regulations contained in this standard were all created by the industrial organization for standardization. ISO 14001 includes the tips such as the usage of natural resources, disposal of the waste to the environment, and energy consumption.
The main purpose of the imposing the environmental standards are the fact that the environmental standards are the frame work for those companies who are interacted and uses the materials as primary sources from the environment directly to their production process. When performing their tasks, the main requirement is that the environmental standards must be met and the continuous improvement must be at the desired levels and the environmental performance should be even. There are various methods in which the company can adopt specially for the hard-core environmental affecting companies.
For the behaviour of the organisational scenarios, the framework is determined by the ISO 14001 which was approved at the Geneva, Switzerland. This standard which was issued in the 1996 was an addition to the ISO 14000. The model provides a necessary guideline in order to audit, labelling and assessments. It should be noted that these are not the replacements for particular legal tool or an act but rather guidance or an aid. These standards are not also replacing the codes of practises as well which are bounded by the organisation such as Responsibility, care and due diligence. But the most important aspect for Oil companies such as British Petroleum with regard to the sustainability is that the management of the environmental related as well as monitor the performance within a given framework. Therefore the improvement of the production as well as the performance of the individuals such as supervisors specially those who are into the excavation can be aware of the performance levels that they must perform in order to be satisfy with the given scenarios. the main advantage for the environmental companies is that the improvement of the performance at the sustainability rises up and the improvement to the environment therefore automatically enhances.
Having discussed the above report it is clear that the performance of the company must be in relation to the sustainability as well as the companies such as British Petroleum must take the steps to beat the inconsistent policies they adopt time to time in order to flourish themselves but rather they must focus on the advantages as well as the legislative requirements such as the cases of Oil spills. Therefore the preservation of the standards such as ISO 14000 and 14001 is a must concept within these organistaions if they are to step up and to move on with the production. The other main conclusion is that with the level of usage, the future generations must be protected. Therefore the adequate reasons such as Research and Development which British Petroleum has maintained over the past years must be appreciated. Therefore the maintainance of the sustaibaility in highl volatile contexts is not just a requirement.