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case study: Shell Malaysia
Sustainable Development Report 2002
The Company
Sustainable Development Report 2002
The Business Case
Shell Malaysia is an integrated energy company engaging in three main business sectors: Exploration and Production, Oil Products, and Gas and Power. The company has invested over RM70 billion in Malaysia over the last four decades and is today, the country 's largest foreign direct investor (FDI) . Shell has a commitment to invest RM2 billion annually from 2003 - 2007 and spent RM2.9 billion on capital expenditure in 2002.
"As a very large business, the success of Shell is intimately linked to the welfare of society," comments Jon Chadwick, Chairman. The company spends over RM10 million each year on social development and community care programmes. By focusing on sustainable development, Shell can integrate the economic, environmental and social aspects of its business in order to achieve a long-term position as a top performer in energy.
Shell's work in promoting best practices for sustainable development runs the gamut from pollution control to resource conservation to employee empowerment. In the process, Shell has implemented innovative projects that benefit both business and society.
Example : w w aste steam and waste flue-gases from refining operations have been harnessed to generate power. Excess electricity is injected into the Malaysian national grid through a landmark power purchase agreement signed with national utility company Tenaga Nasional Berhad. "This is a very significant achievement for sustainable development in the country and is Shell Malaysia's positive contribution towards optimizing power re-generation and energy conservation," explains Chadwick.
Shell's new flare system has also successfully reduced greenhouse gas emissions caused by flaring and venting - which are, respectively, the burning of combustible gases and the release of gases to the atmosphere without burning. Continuous venting in Shell's upstream activities has been eliminated following the commissioning of the new flare system at the South Furious and Barton fields in North Sabah waters in November 2002. Shell had set targets to eliminate gas disposal by continuous venting on 1 January 2003 and to eliminate flaring on 1 January 2008 .
To strengthen human resources, Shell is embracing a diversity and inclusiveness policy aimed at attracting and nurturing diverse talent. Women benefit from specific targets on gender diversity; Shell aims to increase women in senior positions to 20% by 2006 from the current 2% and to increase the number of female fresh recruits to 30% from the current 20%. "We are the first major multinational company in Malaysia to implement a Sexual Harassment Code," adds Chadwick. Family-friendly policies such as tele-working and flexi-hours have been implemented to enable all employees to achieve a "work-life balance " in fulfill ing family duties without sacrificing performance or career advancement.
Process and Reporting
Shell Malaysia has been reporting for 5 years; its Sustainable Development Report 2002 won for Best Environmental Report at the inaugural ACCA Malaysia Environmental Reporting Awards (MERA) 2002.
The report communicates Shell's progress across a wide range of indicators from greenhouse gas emissions to oil spill records. Shell incorporated two new elements in its report for 2002 - case studies and testimonials from stakeholders.
"The case studies highlight the successful efforts in technological innovation or efficiency in a particular leadership initiative or approach to break new ground," explains Chadwick, "while the testimonials reflect the uncensored compliments and critique from various business partners, community leaders, customers and academia."
However, finance-related data, including its environmental investments, is lacking in what is otherwise a highly comprehensive report.
People and Credibility
Stakeholder engagement is an ongoing process at Shell, which communicates regularly with government heads, regulatory bodies, neighbouring communities, and non-governmental organizations. "Public consultation and the importance of community relations are at the heart of the social aspects of our sustainable development," explains Chadwick.
Transparency, openness and accountability are core values in stakeholder communications; Chadwick states frankly: "You will recognize that there are areas in which we still need to improve." Hydrocarbon spills are a tangible weakness. In 2002, equipment and human failure resulted in four hydrocarbon spills with a total volume of 4.7 tons versus a zero target. Appropriate remedial measures were taken and lessons learnt shared among Shell's operations personnel to prevent similar incidents in future.
"We are steadfast in our goals to help meet Malaysia's economic and energy needs as well as satisfy the environmental and societal expectations of present and future generations of Malaysians " Chadwick asserts.
Appropriate remedial measures were taken and lessons learnt shared among Shell's operations personnel to prevent similar incidents in future. "We are determined to keep on striving to protect people from harm from our products and our operations," Chadwick asserts.