Assessing Of Sustainable Development In Business Commerce Essay


The explanation of sustainable development giving by World Summit on Sustainable Development (WCED) is "development that meets the needs of the present without compromising the ability of future generations to meet their own needs"(WCED, 1987:43). However, the mentioned above was criticized by some professors (e.g. Elkinton, 1998;Ehrenfeld, 2005;Sebhatu 2010,) as too board of meaning and lacking of a determinedexplanation to business. In consequence of the explanation of Sustainable development wasprovided to be more specific by The World Business Council on Sustainable Development (WBCSD) in year 2004 to be "Sustainable development involves the simultaneous pursuit of economic prosperity, environmental quality and social equity."(WBCSD, 2004, p.1).Companiestargeting for sustainability need to perform not only against a single, financial bottom line but also against the triple bottom line

One of the most well-known and important concept in sustainable concept is The Triple Bottom Line (TBL) that concentrates on balance the significance among Economic accomplishment, environmental concern and social responsibility. In summary, Companies targeting for sustainability need to perform not only consider to finance bottom line, but also the triple bottom line (Johnson 2008).

Corporate Social Responsibility

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According to Sebhatu(2010), CSR is" the concept that an organization is accountable for creating economic benefits for its shareholders and is responsible for its impact on all relevant stakeholders, ecology and future generations". But Salzmann et al. (2005)give a comment on the advantage of CSR, they identify that it is still indecisive to say that CSR will givethe company a financial return regard to many researches, whichhave been done until now. However, regarding to Heal (2005) and Samuel (2010) points out that CSR might helped company minimizing the conflict with stakeholder and brought to building credibility and reputation to their company. Furthermore, Enquist et al. (2007) supported that if companies conform CSR concept in their business properly, it will generate benefit and profitability to business, in long-term perspective.


For nowadays, the company in a sustainable businesses has changed their focus from merely shareholder needs to stakeholder needs (Johnson 2008) for complying with sustainability concept in their business. Because of not only customers that has an effect to business activity, but also other stakeholder such as employees, suppliers, NGOs, governments, communities or even mass media. In agreement with Freedman (1984:46), Johnson(2008) provided a definition of stakeholder as "any group or individual who can affect or is affected by the achievement of the organizational objectives." (2008a:8). Furthermore, Sustainable service business have to connect the relation between sustainability and vitalize stakeholder values by using TBL as a framework and stakeholder dialogue as a principal to conduct its business quality development process(Johnson,2008) by let both primary and secondary stakeholder co-create company triple bottom line. According to Kaptein& Van Tulder (2003), the proper stakeholder dialogue not only improve a company's affectability to its environment, but also increases the environment's understanding of its crisis.

2.2 Research method

In this research, Case study is chosen as Research Method, which is methodology to approach the sustainable development and relationship between company, environments and social. Concerning the process of research, data approach is decisive illustrated.

Data collection

Before going to other part, it is certainly to understand where andwhat kind of information is suitable for the paper. This paper is based on secondary data, so I can go through directly to surf in the website of the company to gather the official information about the process that the company conducts the sustainability concept. Furthermore, I have searched and gathered the information from related articles, books and e-bookfrom the library web-based system.

Data analysis

After selectingthe research method and gathering adequate information form the sustainability report, then Igo forward to perform data analysis. This paper, I have performed a comparisonwith current and previous year information; it can prove us conspicuous the different from annual sustainability reports. For example, comparison between year 2008 and 2009, Shell points out reducing CO2 emission is the key concern in many kinds of CO2 reduction pathways. The companymentioned that the major cause is from the company production, and they have had the program and achievement over the time pass since 1997. It is the benefit for company, environment and society.

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Data limitation

Normally, a case study approach gives researchers the greatlyperception by disclose issue and relationships, which is unclear in typical statistical data (London et al. 2010). Only one case study analysis may contain such a limitation of biased sampling because itsrandomly picked, as a result it is uncommon to generalize. In addition, in this research, there is based on secondary data that is unavoidable to perceive the limitations about data accuracy, and timeliness problems(Kinnear & Taylor 1996). Moreover, some company's information may be contained biases and much positive opinion from preparers.Besides, others secondary data, preparers based all information mainly from articles that already accepted and reviewed by influencer in the company.

Chapter 3: Case Study

The reason that I choose Royal Dutch Shell (Shell) as case study, because Shell grows up through more than 100 years and continue to fully apply the sustainable concept and report the sustainability report since 1997,benefitedus to comparison the information from year to year for doing comprehensively craft of research in sustainability.


Royal Dutch Shell is a global leader in Fuel supply, Lubricants and services for ships at sea. Fuels and lubricants, Shell provided business and industry as a high-quality product to entrepreneurs, which can be used to its full potential. Moreover, the company also provides the technical services and communications system research to the group's oil company that can help them to facilitate business operations as well.

History of Shell

The Royal Dutch Shell Group was established in February of 1907 when the Royal Dutch Petroleum Company and the "Shell" Transport and Trading Company Ltd of the United Kingdom were merged their operations - a large merger driven by the need to struggle globally with the American petroleum company, John D. Rockefeller's Standard Oil. The portion of the merger is 60% owned by the new Group to the Dutch arm and 40% belong to the British. (Shell, 2010)

During November of year 2004, following a period of crisis caused by the exposure that Shell had been exaggerating its oil reserves, it was declared that the Shell Group would change to a single capital structure, establishing a new parent company to be named Royal Dutch Shell plc, with its major listed is on the London Stock Exchange, a minor listed is on the Amsterdam Stock Exchange. For its headquarters and tax residency are in The Hague of the Netherlands. For registered office is in London. This business combination was accomplished on July 20, 2005. Shares were issued at a 60/40 advantage for the shareholders of Royal Dutch, which to be in line with the original shareholder of the Shell Group. (Shell, 2010)

For nowadays, Shell is proud to participate in providing quality products and services with various company, they intend to provide your business to be easily and seamlessly. This is why the shell was prepared products to meet various needs for each businesses and industries. Royal Dutch Industries now has change a new structure of business into four parts: Upstream Americas, Upstream International, Downstream Projects and Technology. The company employs about 102,000 people in more than 100 in the shell plays an important role especially in responding to energy needs higher increased the world in ways that are economical Social responsibility andenvironment.During the development of Shell, sustainable concept and CSR play a promoting role for its development of sustainable development program. (Shell, 2010)

Shell Company with the sustainable concept

Economic, the company gained an income around $12.7 billion and returned $10.5 billion to shareholders. Net capital investment of $28.9 billion will help sustain of company business for the future. The company also spent $1.1 billion on research and development for the future development to be consistent with a sustainable concept.

Environmental, Due to climate change is one of the top challenges. Thus the company dedicates itself to combat with climate change and to sustain a more efficient use of resources and manage CO2 emissions. The company set up 6 main pathways to comply with the efforts to reduce CO2 and develop Biofuel project fro the future energy.

The first way, to increase the efficiency of our operations, Shell has introduced sustainable programs and invested in development of energy efficiency against operations and projects.

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The second way, to establish a substantial capability in CO2 capture and storage (CCS), Shell has proceeded to be necessitated in a number of demonstration projects to help the development of innovations, technologies and understanding of CCS, including the world's largest project in Mongstad, Norway. The company expected it to capture up to 100,000 tones of CO2 a year.

The third way, On going to research and develop the innovations and technologies that can increase an efficiency and reduce CO2 emissions in hydrocarbon production. Shell has installed a new technology called cansolv at a coal-fired power station that uses steam and chemicals to capture post-combustion CO2 and sulphur dioxide gases. It is approximated to be in place by 2011.

The forth way, developing the low- CO2 sources of energy, including natural gas and low-co2 fuels, Biofuel. Shell's production of natural gas has been increasing for many years. Shell will be producing more gas than oil from 2012. The company is one of the world's largest providers of LNG, which supplied power to businesses and homes usage in cities that far away from gas fields. The company is also the world's largestseller of transport biofuels with 9 billion liters sold in 2009. The company has been investing in new technologies and research to improvehigh qualitybiofuels for the future.

The fifth way, managing energy demand by providing the alternative high-quality fuel to the customers for using less energy and emit less CO2. During 2009, Shell has launched Shell FuelSave, our most efficient and quality fuel to date. This fuel can save up to one liter of fuel in a 50-litre tank. The company is also on going to improve and provide the high quality lubricants to increase energy efficiency.

The last pathway to reduce CO2 emission, Working with governments and dedicate to the need for more effective CO2 regulation, the approach is to UN climate change conference in Copenhagen. The company encouraged key governments to develop policy frameworks that would enable companies to improve the innovation and technology needed to deal with CO2 emissions. The company is also going on to support market-based mechanisms, including a global price for CO2 that will be concerned to the industry to invest in CCS technology and effective energy efficiency measurement.

Social Performance, Shell's projects and facilities often operate close to communities. The company has an approach to harkening and responding to the neighbors. The company's social performance requirements were launched in this area. The company includes having social performance plans in place early, managing resettlement and implementing a grievance procedure. The company works with local communities to share opinions, attitude and benefits. Moreover, Shell has provided the opportunity to the community by offering the local jobs and services that the company help create. Shell has spent over $13 billion in 2009 on goods and services from locally owned companies in the under-developing and developing. The company also spent around $132 million on social investments. The company has dedicated itself to develop a community development projects indirectly through Shell's Foundation, and directly through local Shell operations.

Corporate Social Responsibility

The company, on the one hand, is aiming for the growth of profit; on the other hand, is performing to protect the environment, ensure social performance and direct the future business with modern innovation and then produce the best fuels to people.

The company tries to minimize the environment impacts on Greenhouse Gas Emission (GHGs) and CO2 emission, water consumption, while combating climate change.The first, Shell performed cutting CO2 Emission from their core business. After modernizing their refining oil production to reduce CO2 Emission, itimplements the quality innovation technology to product its fuel more efficiency. And reducing the fresh water consumption through recycling and advanced technology.The company performs research & development on the alternative fuel, Biofuel, then pushes it to commercialization. The achievement from Biofuels Project, it pushes other companies within an energy industry to striveon Sustainable Biofuelsfromthe sustainability standard to be internationally recognized, especially, to be fulfilled and answered the need of NGOs in the environmental views.Moreover, the company also concern in their staffs' safety as a top priority, the company has launched its mandatory 12 lift-saving rules to strengthen an impetus to protect and avoid the serious accident.

Chapter 4: Results/Evaluation

On regarding of the theoretical roots and physical case description, the contributions that sustainability arouse in the company, as economic activities related with environmentaland social responsibility, to be concerned in the structure of their corporate culture has brought to company's way. Additionally, the stakeholderaccepted, in our research,is an accented theory of 'organizational management and business ethics that addresses morals and values in managing an organization' (Robert &Freeman, 2003). Accordingly, I answer the research questions, based on what this study was researched as far, are in a very optimistic and investigating way thinking.

Case Study of Shell, How Shell wouldconduct the sustainability concept then response to CSR and how to benefit to the company in long-term perspective?

According to Enquist et al. (2007) supported that if companies conform CSR concept in their business properly, it will generate benefit and profitability to business, in long term perspective. The first thing that I can find is the company prioritizes their employee safety following the sustainability way beneath the topic of Social performance. According to an agreement with Freedman (1984:46), Johnson( 2008), the company might not only concern in shareholder, but or other stakeholders including their employee which impact directly to the company production. Thus, Shell has concern in the safety and healthy of their employees by launching its mandatory 12 lift-saving rules to strengthen an impetus to protect and avoid the serious accident. The company tries to continue building its safety culture to the organization, not only one time policy, but sustainable practical. As a result of this policy, this paper can prove that the accidents were sharply reduced. Since 2000 - 2009, the injuries was fallen by more than 55 % and 22% decreased from 2008 due to the sustainable rules that can reinforce every employees and the outsider contractors to know and conform to prevent a serious injury or fatality. Whenever one of the company's stakeholders, employees, feels safety with a good healthy, they absolutely get morale and ready to work with a good performance. Moreover, when employees perform good efficiency performance, it might be help the environment by reducing CO2 emission at the same time which it comply with the first way of CO2 reduction pathway. Although this result can't be directly shown the benefit to the company's performance, but I believe that it must be a good sustainable trend for the company.

Most of employees who work for the company is not from the internal source only, but also come from the outside of the company as contractors. According to the concept of sustainability (Johnson 2008) and CSR, whenever the company operates the business in any place, Shell has never ignored to the local community or society. The company listens to the community's sound and recommendation and ready to improve and develop to the compromised way. Moreover, the company also provides the opportunity for a job to the local people as a contractor via the subcontract agency. The company also provides programs for supporting their knowledge and skill for their future work. The evidence that can show for this achievement is the Creating Bonds that rewarded from the American Chamber of Commerce. There is one of the evidence to show that Sustainability can be benefit to the company the form of the reputation and added value to the brand. Refer to Heal (2005) and Samuel (2010) mentioned that CSR might helped company minimizing the conflict with stakeholder and brought to building credibility and reputation to their company, whenever the brand and good reputations is recognized by public, it might be benefit to the company's sell performance and the company's stock price in the stock market as well.

For the environment, another project that the company dedicates to develop is Water recycle system. Shell has developed and performed to use an advance technology to reduce the usage of the fresh water in the industry. In some country, the company is allowed to use the recycled household wastewater in the company's operation by using the advance recycle process technology. Refer to statistic data from Shell Sustainability report 2009 and 2008 (Shell, 2009) (Shell, 2008), this study can prove that result of the company's performing the sustainable concept can be benefit the environment and the social. The performance data show that Shell can reduce to use the fresh water from 224 million cubic meters in 2008 to 198 million cubic meters in 2009 or 11.6% decreased. This study shows that the company is not only concern in the company operation that they can safe the money from reducing fresh water usage. At the same time, the company also concern in the potential impact of global warming and the water supplier to the people in the local community. For a long-term benefit, the company can invest and develop the sustainable water recycle system for a long-term usage in their operation and also maintain the good environment for the next generation in the future.

Chapter 5: Conclusion

In this research, it show the relation between Sustainability concept, Triple Bottom Line (TBL), Corporate Social Responsibility and Stakeholder, which played a decisive role for sustainable development. If the company can compromise this concept with their business, the company might be sustainable on the economic-difficulty circumstance, a green environment and the cozy society. In this paper, it brings the cause-effect example of Royal Dutch Shell Pcl (Shell) to illustrate as the clarified picture.

In this paper, I have performed analysis the relation between Sustainable Concept, Corporate Social Responsibility and Stakeholders, and pointed out that why the company have to continue perform the sustainable process in the company operation. Because of the result of it might be benefit to not only the company, but also all stakeholders including environmental and social.

Finally, I believe that Sustainable Development is the best way when it can go thoroughly and incorporate in the business determination in the proper time and opportunity. The company who would be a sustainable company should concern not only in the economic perspective, but also in Environmental and Social Performance closer to the core of its business.