Meeting the economical issues and corporate social responsibilities of a company - the case of shell

Abstract

Corporate social responsibility (CSR) has been a key business issue for long time already. Laws and regulations have been created to activate companies to take part in sustainable development. One of the key drivers for the corporate social responsibility has been the change in society’s values: companies are expected to work in a way that is not necessarily its business, i.e. companies can not anymore focus on just creating profit; they have to take into consideration also environmental, social, political and ethical issues. Thus in the future, companies’ profitability and access to the markets will be more dependent on how good and how fast they are able to react to changing political and social environments. The challenge for the companies is to understand market properly and also to be able to interpret possible changes. India is the world’s second largest country in terms of population with 1.095 billion people1 and seventh largest country measured by the area. Its economy is one of the biggest in the world with a GDP of $ 691 billion in 2005, and one of the fastest with annual growth rate of 7 to 7.5 percent2. India is largely rural but it has very large and fast-growing urban population. It has been estimated the population in India will be nearly 2 billion by 2050. While the population has grown rapidly, infrastructure of the country has not kept pace - sanitation system, transport, water and electricity supply and coverage being major concerns. At the same time international companies have shown their interest in investing in India. One of the key issues in terms of sustainable development, climate change and economic growth is India’s energy challenge: how to meet growing energy demand with limited resources in a sustainable way? Taken into account the fact that India’s energy demand is growing at the rate of 9 percent per year, the energy supply needs to find new resources. Energy challenge is not an issue only for the government – oil companies have also a significant role in guaranteeing energy supply in a sustainable way and determining the future energy forms. Surveys reveal that in the future especially for oil companies corporate social responsibility will be more part of the business strategy and it will be key factor for long-time survivor. That is the case in India as well. In this paper we want to find out how Shell, one of the biggest oil companies in India, is meeting the economic issues and corporate social responsibility. More specifically, we are trying to determine how Shell is meeting the energy challenge of India in a sustainable way and at the same time meet the needs of its shareholders.