Shell U.K., with warts and all

David Knott
London
[email protected]

Shell U.K. Ltd. published its first Report to Society on May 21, following the lead of the overlords at Royal Dutch/Shell (OGJ, May 4, 1998, p. 54).

The report is a direct response by Shell U.K. to the public criticism the company has met over the Brent spar dumping plan and allegations of close links with the brutal government of Nigeria.

Announcing the new report, Chris Fay, chairman and chief executive of Shell U.K., recalled former U.K. Prime Minister Margaret Thatcher's famous remark that there is no such thing as society.

"At Shell U.K.," said Fay, "we prefer to think that, on the contrary, society is very much alive and kicking. And this poses enormous challenges and opportunities for a company the size of Shell U.K."

The report sets out Shell U.K.'s business principles and, like the RD/Shell report, takes the first steps towards benchmarking not only financial and operating results but also environmental and social performance.

Company's role

The report reflects Shell's enlightenment and its conversion from an oil company to an energy company promoting sustainable development.

While it emphasizes the belief that a company cannot divorce itself from what is happening in the communities where it operates, Fay is wary of Shell being seen as a "corporate nanny," taking on government's caring function.

"Shell U.K. cannot provide all the answers to major social and environmental concerns," said Fay. "It would be entirely inappropriate for us to do so.

"Issues such as air quality and the future of transport policy in the U.K., for example, pose serious challenges to us all: government, local authorities, manufacturers and consumers."

Naturally the report charts Shell U.K. successes: more than a 40% reduction of gas flaring in exploration and production since 1992 and 50% less flaring at Shell Haven and Stanlow refineries, for example.

Duty to disclose

"Equally however, we have a duty to disclose statistics that may make for less than comfortable reading," said Fay.

"This is the warts-and-all approach. No one would believe us if we claimed that everything in the garden was rosy. We've never done this in the past, and we're not about to start now.

"In the year's report, you will see that we have missed our target for oil spills. Throughout the early 1990s, we were able to report on steady improvements, with total spills falling to 7 metric tons by 1995.

"The 1997 figure of 111 tons, including two incidents amounting to more than 72 tons, is therefore completely unacceptable. I have already taken steps to ensure that further resources are devoted to addressing this issue."

Fay said that the oil industry has passed the point for excuses and that concerns over the environment, health and safety, and broader social goals are not "optional extras" for companies. "Changes will inevitably take time," said Fay. "If anyone expects a Big Bang, they're going to be disappointed. Long-held assumptions and working practices will need to be challenged and then challenged again."

Fay said Shell has some way to go before its own sustainable development plans are integrated into daily business: "But we can no longer say to society, 'Trust us.' Now it's a 'show me' society."