Sustaining oil and gas multinational operations through corporate social responsibility practices

Ama Twumwaa Gyane,Edward Kweku Nunoo,Shafic Suleman,Joseph Essandoh-Yeddu

doi:10.1007/s43621-021-00042-x

Abstract

The objective of this study is to provide empirical evidence from the perspective of prudent corporate social responsibility practices by oil and gas multinationals in emerging economies on how investments in and disclosure of the practices could enhance financial sustainability. Accounting-based measures on investments, financial performance, disclosures of activities and panel data set on company size (total assets) over a 10-year period (t) were analysed. Findings show that multinationals with interests in emerging economies take key aspects of their corporate social responsibility practices seriously. There was a significant positive relationship (p=0.0035 < 0.05) between investments in corporate social responsibility practices and sustainability of financial performance. No significant relationship (p=0.4409 > 0.05) was established between disclosure and financial performance. The paper concludes, by supporting the preposition with scientific data, that functional corporate social responsibility practices yield sustained dividend by presenting a stronger financial outlook for multinational oil and gas companies who engage in it. This is prudent for poverty alleviation initiatives and key to achieving the sustainable development goals and targets in emerging economies where they operate.

Highlights

Introduction and background to the studyThe oil and gas industry is seen to assert its operations towards business ethics that subscribes for the tenets of sustainability
The least corporate social responsibility (CSR) area of interest, was in the market place, which scored 31 points (6*, Sum = 31) out of 45. This may be due to historical antecedent of the oil and gas industry and sensitivity of their operations to the environment, communities where they operate and their workers. This outcome supports [39]’s assertion that one of the business entities that can make a strong claim to business ethics and or corporate socially responsible human rights, employee rights, stakeholder rights, environmental protection, community relations, transparency, environmental stewardship and sustainability principles is the oil and gas industry. [56, 59] collaborates this and notes that oil and gas multinationals are active and play leadership roles in developing and promoting good corporate business practices and codes of conduct in the workplace as they engage with different facets of society in which they operate
The analysis has shown that oil and gas multinational companies in emerging economies, especially, those with interest in Africa take all aspects of their CSR activities serious

Summary

Introduction

The oil and gas industry is seen to assert its operations towards business ethics that subscribes for the tenets of sustainability. Per the Global reporting initiative (GRI) and the United Nations’ Global Compact Report [4], oil and gas multinationals have demonstrated active leadership roles in developing good corporate business practices and codes of conduct in their work environment, leveraging different sectors of environment and society, where they have interest. The participation of ChevronTexaco, Exxon-Mobil, Shell, BP-Amoco, ENI, Occidental, Tullow and Total-Fina-Elf, all with interests and investments in emerging economies [4], attest to this.

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