Oil companies are among the 'most transparent businesses around', using sustainability, social responsibility and ethics as good promotion topics, according to a new study.
In Research and Markets' World's Most Sustainable and Ethical Oil Companies 2006, Shell tops the rankings for the third year running. As per the study, Shell achieves the score of 89.01 per cent, highest ever by any oil company.
Other major movements in the league table, include Brazil's Petrobas, which moves up this year from 7th in 2005 to 2nd position. While Exxon scored 80 per cent in 2005, it only achieved a score of 68.1 per cent this year, owing to gaps in reporting and thus dropping it from 2nd to 9th place in 2006.
On the other hand, companies are generally proud of their transparency. Russia's Lukoil manages to raise its total score by 23 percentage points from 35 per cent to 58.61 per cent, or a jump of 67 per cent.
In September, 2005 Lukoil brought out its first sustainability report discussing its achievements in environment, employee benefits and community support, which more than doubled its transparency score from 29 per cent in the 2005 ranking to 62 per cent in 2006.
Fourteen of the 15 companies ranked here publish annual environmental reports. Even Russian gas giant Gazprom has been publishing ecological reports since 1995. While plant modernizations are the focus of companies with older facilites like Lukoil, Gazprom, Petrobas and Pemex, European and US companies are concentrating on reducing emissions and energy use.
While most companies were proud of reducing water and energy use and reducing emissions, many appear at best ambivalent on new and renewable energy sources.
Of the five overall areas studied (sustainability, corporate governance, corporate social responsibility, ethics and transparency), companies do worst in corporate governance, averaging only 58.61 per cent. The differences between the companies is the greatest in this area with Shell and Petrobas both achieving 83.3 per cent and Petronas only getting 4.1 per cent.
State companies such as Gazprom and Pemex generally did worst, lacking a management structure controlled by independently staffed board committees. Surprisingly, the three US companies barely made it over the 60 per cent mark despite Sarbanes-Oxley, NYSE laws and the like.
Most companies invest heavily in human resource development and training, such as France's Total which spends euro160 ($192) on training annually. Training entails higher productivity but also fewer expensive accidents in what is a fairly dangerous business.
To this end, Statoil trained 23,500 employees and contractors in 100 safety seminars. At Total, injuries among employees and contractors dropped from 46 in 2002 to 20 in 2004.
The strong link between employee satisfaction and productivity has prompted an increasing number of companies to carry out annual employee satisfaction surveys. Chevron claims that 89 per cent of its employees thought it behaves 'responsibly in relation to the environment' and 80 per cent think Chevron cares about the health and well-being of its employees.
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