Sustainable Development—Implementation Strategy for a Global E&P Business
Authors: Bradley A.S. , Hartog J.J. 
Published: June 2014

In 1997, the Royal Dutch/Shell Group made a public commitment to contribute to sustainable development (SD) and has since undertaken extensive work to turn this into practical reality and integrate the concept into business activities. Shell E&P produced a framework to guide development of the business in line with the SD concept. The cornerstone of the approach is six sustainability principles, applicable from corporate to site level. Each Shell E&P operating company has used the principles to frame a strategy and assess its own course and contribution to SD, reflecting individual company operating environments, cultures, and stakeholder values. This paper provides a background to the approach developed and discusses progress to date. Examples from several Shell operating companies illustrate how SD considerations are being integrated into activities and how work is being taken forward. The focus is on ways that the E&P business can contribute toward sustainability goals. Movement by E&P companies into other energy sectors, such as renewables, is not considered.

Introduction

SD is about integration and balance: integrating economic, social, and environmental aspects of activities and balancing short-term wants with long-term needs. While business alone cannot create the changes required to deliver SD, as part of society, it has a role to play. The Royal Dutch/Shell Group publicly expressed its commitment to contribute to SD and believes that this holds the key to its long-term success. Having made this pledge, the challenge is to ensure that the commitment is fully integrated throughout business activities.

This paper outlines the approach taken to address this task. It first provides the background to the Shell Group's SD commitment and aspirations and reviews initial activities undertaken that have shaped the approach adopted today. The paper then discusses the program developed during 1999 to build on initial successes and intensify efforts to integrate sustainability into the business. Progress to date is reviewed and examples from Shell E&P operating companies around the world illustrate the different types of approaches being taken. Finally, conclusions resulting from the work and next steps for the future are outlined.

The SD Commitment and Aspirations

The commitment to contribute to SD was first included in the Royal Dutch/Shell Group's revised business principles and health, safety, and environment (HSE) policy in March 1997. Shell accepts the Brundtland Commission SD definition of "meeting the needs of the present without compromising the ability of future generations to meet their own needs," adopted at the 1992 United Nations Conference on Environment and Development.1 Shell also recognizes that SD encompasses three components—environmental, social, and economic—that are interdependent. By taking a broader, more integrated approach to business, the company believes that SD will open up new opportunities in emerging markets and customer groups and will also help the company contribute credibly to the public SD debate, work constructively with stakeholders, and maintain and enhance its reputation.

SD and E&P

Given that the E&P business is based around extraction of a finite resource, some have questioned how it can be compatible with SD. Shell's view is that, while fossil fuels are unsustainable, meeting the needs of both present and future generations requires energy. Today, fossil fuels supply approximately 85% of the world's energy needs, and demand is expected to rise as population grows and economies develop. Sustainable alternatives lie in renewable sources of energy, and the Royal Dutch/Shell Group has established a dedicated renewables business to pursue development of renewable resources, such as solar, biomass, and wind energy. These are expected to grow as new and existing technologies are developed further and become more cost-competitive.

Until renewables are in use, however, the E&P business has a clear role to play in contributing to SD objectives through energy supply, wealth generation, employment, and development and transfer of technology and skills in as sustainable manner as possible. Indeed, the need to consider such issues becomes increasingly apparent and vital to success as E&P increasingly operates under a "global spotlight" and moves into more remote areas and those that are often environmentally and socially sensitive. Profitability is no longer enough. How money is made and the impacts of what companies do are becoming more and more important.

Turning Commitment Into Practice

First Steps.

E&P was one of the first Shell businesses to attempt to translate the SD concept into practical guidance and tools. As a first step, in April 1997, Shell Intl. E&P (the Shell E&P service company) produced a detailed and practical sustainability assessment guide that included such tools and techniques as a sustainability checklist for new projects and an evaluation tool to monitor and assess company progress.2 It also contained case studies illustrating how companies might get started. An internal Web site was established to provide a central place to obtain information and share experiences.