Beyond Corporate Social Responsibility: Oil Multinationals and Social Challenges

Citation

Reed, R.J. (2010), "Beyond Corporate Social Responsibility: Oil Multinationals and Social Challenges", Journal of European Industrial Training, Vol. 34 No. 3, pp. 292-294. https://doi.org/10.1108/03090591011031773

Book synopsis

Drawing examples from the oil and gas multinationals, the central aim of this book is to investigate the potential of CSR for addressing three challenges in the business‐society relationship: the environment, development and governance. The author makes it clear he believes that any discussion of the CSR agenda must have a solid basis in reality which is why he has chosen to focus this book on companies from a single industry, namely the oil and gas sector in which the author has more than ten years research experience.

In Chapter 1 definitions of CSR from a variety of academic sources are explored with contributions from Africa, Asia and South America. The oil and gas sector has clearly been chosen because it is an instructive example for analysing the extent to which the CSR movement can transform practices in an industry and to investigate the potential of that sector for contribution to society in its broadest sense. The main chapters of the book focus on key areas of CSR policies where oil companies are expected to make a positive contribution. Chapter 2 analyses the logic of CSR strategies. By providing a number of theoretical perspectives the author seeks to make sense of the factors driving engagement with CSR activities. Chapter 3 provides the context for CSR in the oil and gas sector as the basis for the remainder of the book and it overviews oil and gas production processes and the main international actors. Chapter 4 discusses environmental activities, Chapter 5 considers company funded development efforts and Chapter 6 is focused on governance initiatives. Chapter 7 draws conclusions from the book's findings and provides some recommendations.

The book presents a range of perspectives on CSR strategy including “game theory”, “stakeholder theory” and “the theory of the firm”. The author seems particularly attached to Austrian economics since in his view it provides key insights from an entrepreneurial perspective on the active pursuit of CSR strategies within companies. Because the author spends a chapter explaining oil and gas production processes, and feels the need to present a good deal of statistical detail about the sector, the book is evidently not written as a technical contribution to the oil and gas sector. That the book presents a variety of definitions of CSR and needs to examine the logic of CSR strategies, seems to show that the book is written for an audience who have an interest in CSR but who are not already specialists.

In the concluding chapter it is made clear that the book sets out to understand CSR and in particular its potential and limitations studied in a specific sector and within three key challenges. The book makes recommendations for the business community and encourages individual companies to improve their relationship with wider society. Several possible scenarios for CSR beyond 2015 are postulated, ranging from CSR declining as a result of long lasting global recession through to the other extreme of CSR systematically changing many business practices. The author considers that the reality is likely to lie somewhere at a mid‐point. As the book draws to a close, the author's motivation of encouraging more responsible business becomes evident but as a realist he admits that if business is to fulfill its potential for providing societal needs the CSR approach is not enough by itself.

Evaluation

The “environment challenge” in Chapter 4 and the “development challenge” in Chapter 5 are presented in ways that give grounds for hope. The “governance challenge” in Chapter 6 however has a more pessimistic tone. The book will reinforce “CSR believers” in their views but may struggle to convince senior executives of the merits of further commitment to CSR in these three areas of challenge. Each chapter presents a boxed example of good practice but the chapter summaries fall short of being actual recommendations either for the oil and gas sector or for other companies to be able to learn from that sector as an example. In the Chapter 7 recommendations earlier arguments are reprised and the importance of universal CSR standards is recognised and viewed as being problematic. The author shows that universal assumptions about the social and political conditions needed for the success of CSR initiatives are unrealistic. It is made clear that a crucial challenge for the CSR agenda is to explore the potential and limitations of CSR in contexts which lack certain conditions of success. The recommendations of Chapter 7 are general and though the book encourages industry associations and individual companies to improve their relationship with wider society, there is little more in terms of specifics other than a general recommendation for the business community to shift its CSR focus from micro level projects to macro level solutions.

In the author's own words

In summary, companies use political influence to attain corporate goals related to profit maximisation, but they rarely use that influence to encourage improvements in governance. While CSR initiatives largely fail to encourage better governance, corporate activities may actually undermine governance (p. 162).

It follows that we need to learn more about the optimal balance of voluntary and mandatory, national and international, prescriptive and enabling regulation. Debates on CSR must move beyond unproductive calls for or against regulation towards studying new forms of “shared” governance (p. 171, italics in original).

About the reviewer

Rodney J. Reed works in occupational health and safety, management effectiveness, labour relations and environmental protection as part of a CSR consulting practice based in Bangladesh. The company works mainly in export orientated manufacturing sectors including textiles, pharmaceuticals and food stuffs. In Bangladesh the main CSR challenges focus around labour relations and in enabling manufacturing businesses to do the least damage to the environment. Reed Consulting Bd Ltd is a member company of the Dhaka Chamber of Commerce and Industry, The British Business Group and The Foreign Investors Chamber of Commerce and Industry. Rodney J. Reed can be contacted at: rodney.reed@reedconsultingbd.org