Corporate Social Responsibility (CSR) In the Energy Sector

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Corporate Social Responsibility (CSR) In the Energy Sector

The energy sector is experiencing challenges to ensure the long-term supply of reliable sources that will meet the demand, which has been growing courtesy of modern lifestyles and technological advancements (Gigauri and Vasilev 1). This implies that corporate social responsibility (CSR) policies have become critical. However, while some firms are genuinely implementing meaningful CSR strategies, others may resort to greenwashing- a type of deceptive marketing meant for public relations without a tangible effect on reducing environmental harm. Moreover, such companies make false claims regarding the environmental benefits of their products or services.

Accordingly, some energy companies are implementing solid strategies to decrease their environmental influence through various CSR policies. For instance, they are investing in renewable energy sources like solar and wind power. Additionally, these firms are employing policies to reduce carbon emissions. Notably, many gas and oil firms are resorting to carbon capture and storage (CCS) technologies, which are critical in reducing the amount of CO2 released into the atmosphere. These steps can critically influence reducing environmental degradation and enhancing sustainability. One instance where the significance of CSR in the energy sector can be seen in the case of Bilbao-based?Iberdrola. As one of the greatest players in electricity utilities and the leading energy group in Spain, the company has spent the last decade in a wide range of strategic revolutions (Reports Worldfinance). Resultantly, the firm is currently the world’s leader in wind power and a pioneer in renewable energy. Hence, the firm has experienced huge success due to genuine CSR, and it currently operates in the UK, Brazil, the USA, and other nations worldwide.

Conversely, some unscrupulous energy companies partake in greenwashing schemes. Ideally, they make false or exaggerated claims about their environmental performance. Furthermore, they engage in duplicity actions that do not address the underlying problems. The perpetrators of greenwashing often collude with private, multilateral organizations or even government entities to perpetuate the vice. Some of the leading companies that have been accused of greenwashing include Chevron, British Petroleum, and ExxonMobil in the energy sector. For instance, British Petroleum has been on the radar of Client Earth lawyers for a while. The company has been accused of ad campaigns that misled the public by concentrating on BP’s low-energy products when more than 96% of the company’s expenditure is on oil and gas. Moreover, ExxonMobil, another significant player in the industry, has also been accused of greenwashing. While the company supports the Paris Agreement, most of its operations remain focused on fossil fuels. Correspondingly, ExxonMobil only spent 0.2% of its capital expenditure on sources of low-carbon energy like solar and wind between 2010 and 2018.

In summary, despite some energy companies genuinely implementing meaningful CSR policies to address environmental concerns, the majority of the players in the industry engage in greenwashing. Statistically, many of the largest world players in the sector have been found guilty of the vice. This includes Chevron, British Petroleum and ExxonMobil, and Shell. To determine if CSR policies are effective, there is a need to evaluate the specific policies and actions of individual companies. For example, ExxonMobil only spent 0.2% of the capital expenditure on solar and wind energy only despite reiterating its commitment to contributing to a clean environment (Client Earth). Some of these actions do not match the CSR initiatives of many of the companies. Hence, many energy companies engage in greenwashing.

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Works Cited

“A World Finance Report: Corporate Social Responsibility in the Energy Sector.” Reports Worldfinance, reports.worldfinance.com/corporate-social-responsibility-in-the-energy-sector/.

Gigauri, Iza, and Valentin Vasilev. “Corporate Social Responsibility in the Energy Sector: Towards Sustainability.” Energy Transition, 2022, pp. 267–288., doi:10.1007/978-981-19-3540-4_10.

The greenwashing files - exxon (no date) ClientEarth. Available at: https://www.clientearth.org/projects/the-greenwashing-files/exxonmobil/#:~:text=The%20truth%20behind%20the%20greenwashing&text=The%20Climate%20Action%20100%2B%20Net,targets%20which%20cover%20its%20emissions. (Accessed: January 25, 2023).