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What is the state of Corporate Sustainability in the Western Canadian oil & gas industry and how can junior and intermediate producers improve it?

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What is the state of Corporate Sustainability in the Western Canadian oil & gas industry and how can junior and intermediate producers improve it?

Rechten: Alle rechten voorbehouden

Samenvatting

When the United Nations World Commission on Environment and Development (WCED)
issued the often quoted Brundtland report in 1987, which first coined the term ‘sustainable
development’, they inspired a multitude of sustainability related ideas and concepts. One of them
is the idea of ‘Corporate Sustainability’.
This bachelor thesis sets out to examine what Corporate Sustainability is and explores to what
extent it is manifested in the junior and intermediate oil & gas companies in Western Canada.
First, it will begin exploring what the state of current research on Corporate Sustainability is
and which differences and similarities it has to other concepts such as the ‘triple bottom line’ or
‘Corporate Social Responsibility’. Secondly, a brief overview will be given of the Western Canadian
oil & gas industry to set the context for the later analysis which is centered around junior and
intermediate companies in that sector. The thesis will then end in recommendations on what these
companies can improve to become more sustainable corporations.
The outcome of the research is that Corporate Sustainability is mainly split into three dimension,
a social, an environmental and an economic one. This is significant because many companies only
focus on their economic performance whereas NGO’s mostly focus on the environmental performance and
many people from the younger generation care about having a good workplace that not only
appreciates them but also gives back to the community. Therefore, to be a truly sustainable
corporation all three aspects have to be taken into account. To determine how sustainable a
corporation is, it will be evaluated with the Sustainability Phase Model and financial data from
annual their audited annual financial
statements.
In addition to that, the ‘Social License to operate’ concept will be examined for its relevancy to
the oil & gas industry. The social license to operate is a rather new term which was created in the
late 1990s and was targeted towards resource development companies in the oil & gas, mining,
precious metal and forestry industry who have their main operations in the developing world. The
reason why this term gained in popularity is because many people believe there is a discrepancy
between the legal license these companies obtain from the appropriate authorities and the way they
conduct business. This is particularly relevant in Western Canada as many stakeholders, such as
First Nations, oppose oil & gas infrastructure projects such as new pipeline construction.
Apart from these social aspects, companies often realize that there are many climate related
opportunities and threats to their operations. Therefore this research paper will list some of
the most important risks and opportunities in this regard and state how juniors and

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intermediates are coping with them. Interestingly to note here is that oftentimes a risk is also
identified as an opportunity, if the company manages to stay ahead of its competition, for example
when the emission reporting obligations change and the corporation already does more than what was
required of them. Most industry professionals interviewed for this research agreed that these
reporting requirements will only get stricter over time.
After applying this concept to junior and intermediate oil & gas companies in Western Canada it is
found that they are on a path to becoming sustainable organizations in the social dimension of the
Corporate Sustainability model. However, they are only considered to be compliant in terms of their
environmental performance and need to become more environmentally friendly to be considered
sustainable corporations. Recommendations to improve their environmental performance include, but
are not limited to, capturing flare gas and use it to power equipment, trim down land disturbance,
reduce overall GHG emissions and participate in emission trading schemes. By implementing these
steps companies can find better and environmentally friendlier ways to extract resources also move
beyond the compliance phase and towards becoming a more efficient and sustainable corporation. But
for now it can be said that junior and intermediate oil & gas companies are not headed
towards becoming sustainable corporations.

Toon meer
OrganisatieHZ University of Applied Sciences
OpleidingInternational Business & Management Studies
InstituutAcademie voor Economie & Management
PartnersSunesis
Gepubliceerd in
Datum2015-02-11
TypeBachelorscriptie
TaalEngels

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