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Corporate Social Responsibility
usage by
business-to-business companies in the oil and gas industry
Author: Wouter Reinier Ligterink Student ID: 10453768 Supervisor: DR. A.E. Kourula
Final version: 29/6/2015 MSc. In Business Administration – Strategy track Universiteit van Amsterdam; Amsterdam Business School!
Statement of originality
This document is written by Student Wouter Ligterink who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Table of contents
ABSTRACT ... 4
1. INTRODUCTION ... 5
2. LITERATURE REVIEW ... 8
2.1CORPORATE SOCIAL RESPONSIBILITY ... 8
2.2CSR IN A BUSINESS-TO-BUSINESS ENVIRONMENT ... 9
2.3HOW COMPANIES USE CSR ... 12
2.4CSR IN THE OIL AND GAS INDUSTRY ... 14
2.5BUSINESS-TO-BUSINESS COMPANIES IN THE OIL AND GAS INDUSTRY ... 17
2.6THEORETICAL FRAMEWORK ... 18 3. METHODOLOGY ... 20 3.1RESEARCH DESIGN ... 20 3.2DATA GATHERING ... 21 3.3DATA ANALYSIS ... 22 3.4QUALITY EVALUATION ... 23 4 EMPICRICAL FINDINGS ... 25 4.1HOW IS CSR USED ... 25 4.1.1 Within-case analysis ... 25 4.1.2 Cross-case analysis ... 30 4.2WHY IS CSR USED ... 36 4.2.1 Within-case analysis ... 37 4.2.2 Cross-case analysis ... 43 4.3ADDITIONAL FINDINGS ... 51 5. DISCUSSION ... 55 5.1HOW IS CSR USED ... 55 5.2WHY IS CSR USED ... 59 5.2.1 Internal reasons ... 59 5.2.2 External reasons ... 62 5.3RESEARCH CONTRIBUTION ... 65 6. CONCLUSION ... 67 6.1SUMMARY ... 67 6.2MANAGERIAL IMPLICATIONS ... 68
6.3LIMITATIONS AND FUTURE RESEARCH ... 69
REFERENCES ... 72
APPENDIX 1 INTERVIEWS ... 83
APPENDIX 1.1 ... 83
APPENDIX 1.2 ... 85
APPENDIX 2 CODING SCHEME ... 87
Abstract
Over the years corporate social responsibility (CSR) has become an important issue, which has to be taken into account by every company that wants to sell something to consumers. These well-known companies use CSR in order to improve their
reputation and gain a positive image. Because of the importance of CSR for these companies, research has focused primarily on business-to-consumer companies. However this exploratory research looks at why and how CSR is used by business-to-business companies. Ten in-depth interviews were conducted with different people and companies in the oil and gas industry to answer the research question. For additional data website information and CSR reports were used.
This research finds that the business-to-business companies in the oil and gas industry mainly have CSR initiatives focused on environmental issues, charity, and local community development. Local community development and environmental issues are a top priority with governments and are driven by rules and regulations. Therefore the business-to-business companies focus on these areas since they feel the pressure of clients and they want to do more than the rules and regulations require. Additional internal and external reasons are discovered for the use of CSR such as employee retention and pressure from other stakeholders such as non-government organizations (NGO’s) and banks, and for reputational reasons.
The majority of the interviewees agreed that using CSR certainly helps to distinguish the company and has multiple beneficial outcomes for the company. However it is not assumed that using CSR leads to a direct competitive advantage for the company.
1.
Introduction
The reputation of the oil and gas industry suffered the past decade due to negative publications about bad business practice and accidents. News articles, for example, published about Greenpeace occupying the Brent Spar to avoid it being dumped in the Atlantic Ocean (Kirby, 1998), or the Deepwater Horizon platform accident (BBC News, 2010). At the same time the world could not do without the oil industry, in 2006 the Netherlands alone was using over 1 million barrels of oil per day (“A Map of the Oil World,” 2007). The Dutch economy is also dependent on the Dutch oil and gas industry. The industry employed over 17.000 people in 2012 and was good for a turnover of more than 3.5 billion euro’s in the same year (Cleef, 2014).
Despite the negative publicity the oil and gas industry receives, oil companies try to enhance their company and industry reputation by supporting different social and environmental initiatives. These initiatives vary from community health programs such as BP’s initiative to get rid of malaria in Bintuni Bay Indonesia, to the Shell foundation identifying and resolving market failures in Asia and Africa in order to stimulate the economies of developing countries (BP, 2014; Shell Foundation, 2014).
Corporate social responsibility (CSR) has become more and more important over the years, companies use CSR initiatives in order to positively influence consumer loyalty and improve stakeholder relationships (Aguinis & Glavas, 2012). The popularity of CSR has not only grown among companies but among researchers as well. Trying to find cause and effect relationships in successful CSR initiatives, and identifying what factors affect and mediate CSR, are among the research agenda.
Previous research identifies multiple reasons why companies would, or should, engage in CSR activities. It is found that both business-to-consumer and business-to-business companies use CSR, however business-to-business companies report less on their CSR usage. One of the reasons for this is that
business-to-consumer and brand-name companies (companies which have the same name as the brand they are selling) are getting more media attention than business-to-business companies (Haddock-Fraser & Fraser, 2008).
The aim of this research is to enhance the current literature by researching the usage of CSR in business-to-business companies This will not only contribute
theoretically by giving in-depth insights into the reasons why CSR is, or is not used by companies, it will also have management applications by identifying how these companies are able to benefit from CSR usage, which in turn may lead to more and better cooperation between companies in order to achieve CSR goals. This research will focus on both how CSR is used by business-to-business companies, as well as why these companies use it. The research question is:
How and why do companies in business-to-business environments use CSR?
The how question is focused on the kind of CSR used by the company, for instance environment or charity sponsorship. The why part focuses on the motives behind using CSR. For example clients may pressure contractors into using CSR, or CSR usage may results in certain benefits.
Different researchers have defined CSR differently. The core characteristics being: voluntary, managing externalities, social and economic alignment, multiple stakeholder orientation, beyond philanthropy and practices and values, however not
all these characteristics are usually present in one definition (Crane, Matten, & Spence, 2013). In this thesis the definition of the European communities will be used, defining CSR as a voluntary concept whereby environmental and social concerns are implemented in the business operations of a company (Commission of the European Communities, 2006).
In the next chapter all relevant literature regarding CSR and the oil and gas industry will be reviewed. This will lead to the theoretical framework, forming the base of this research. The third chapter is the methodology, describing how data is gathered and analyzed. Next the findings will be described answering the research question. This section is divided into two parts in order to separately answer how and why business-to-business companies use CSR. The fifth chapter contains a discussion where explanations will be sought for the findings. The last chapter consists of the conclusion as well as the managerial implications and a guideline for future research.
2. Literature review
2.1 Corporate Social responsibility
CSR, in the form that we know it today, finds its roots in the 1950’s, although back then it was known as social responsibility (SR). The most important development was that companies became more aware of their surroundings and felt more responsible towards their environment (Crane, McWilliams, Matten, Moon, & Siegel, 2008; Marrewijk, 2003). In the 70s CSR was already commonly used, especially in bigger companies. The companies focused on very different activities than today. The top three activities were minority hiring, ecology, and minority training (Eilbirt & Parket, 1973). After the 70s CSR became a building block for the development of different research and theories (Husted, 2000). Research focused on the relationship between the usage of CSR and the financial performance of the company (Griffin & Mahon, 1997).
Research nowadays does not only focus on the financial relationships with CSR, it also tries to uncover the reasons and pressures of companies to use CSR (Aguinis & Glavas, 2012; Blombäck & Wigren, 2009). According to Bansal and Roth (2000), there are 3 reasons why firms engage in CSR activities; 1) because a high placed individual in the company, such as the CEO, finds it important and uses his influence, 2) a company is motivated because there is a competitive advantage to be gained by using CSR, or 3) the industry as a whole is concerned with CSR initiatives and try to ‘beat’ each other by doing better. Studying the meta-analysis conducted by Aguinis and Glavas (2012), finds that 5/7 variables that predict CSR usage and 10/15 variables that acts as mediator or moderator for the outcome of CSR usage are firm
purely on the firm itself, its financial situation, structure, and personnel. This would mean that CSR could be useful in both consumer and
business-to-business industries, however specific business-to-business-to-business-to-business variables are not identified, where specific business-to-consumer variables are.
Apart from researching which variables influence the success of a CSR activity, researchers are also interested in finding which kind of CSR activities have the greatest impact on a firm and society. It is found that CSR should not be a zero-sum game, instead both the company and society should benefit from CSR in order for it to be sustainable. A company should analyze the effect of its actions on the environment around them. Then it should identify which effects they are best able to resolve, which actions would serve society best, and which actions would hold the greatest financial benefits for the company (Porter & Kramer, 2006). When looking at the financial gains for the company research also finds that bigger companies are more concerned with the pay-offs earned today, instead of those earned tomorrow. Companies are thus more concerned with risk reduction and their reputation in the present than investing in innovation and the future. However, sustainable value needs time to develop, therefore companies should focus more on tomorrow instead of only looking at today (Hart, Milstein, & Caggiano, 2003).
2.2 CSR in a business-to-business environment
Research finds that consumer pressure is one of the most important reasons for companies to use CSR (Christmann & Taylor, 2006; Sen & Bhattacharya, 2001). It is found that the chance of a company proactively engaging in CSR and environmental responsibility depends, among other factors, on its value chain position. The closer a company is to the end consumer, the higher the pressure of consumers is to be
environmental proactive (González-Benito & González-Benito, 2006). However this research also finds that because the pressure of consumers becomes higher as the company moves up the supply chain, in some industries companies at the end of the supply chain demand environmental commitment from their suppliers. This pressure could explain why using CSR has a positive effect on the performance of a company in a business-to-business environment. Important to note is that this study only focused on the perception of the buyer in regards to CSR usage and corporate reputation, not at actual reputation and CSR usage (Lai, Chiu, Yang, & Pai, 2010).
The same conclusion was drawn in a different study, finding that CSR reputation was positively related to trust and philanthropic CSR reputation is positively related to customer-company identification in a business-to-business setting. Trust and customer identification are in turn positively related to the loyalty of the customer, which naturally enhances the firms performance (Homburg, Stierl, & Bornemann, 2013; Pai, Lai, Chiu, & Yang, 2013). The reputation of a business-to-business company rises further when 1) a higher level of CSR integration is achieved within the purchasing and marketing of the company, 2) the supplier is able to
safeguard the buyers reputation by using supplier-oriented CSR activities, and 3) image building campaigns are based on hard facts (Leppelt, Foerstl, & Hartmann, 2014). This research further finds that overstating a supplier his own CSR capabilities will improve his reputation, however when these inconsistent signals prevail over a longer period, the chances of the overstatement being detected and having negative effects on the reputation grows as well. CSR usage is thus an important factor for the reputation of a company. Brand name and reputation are in turn key assets for
business-to-business companies, having a positive relationship with customer confidence, customer value, customer loyalty, service & product quality, marketing
and financial performance (Cretu & Brodie, 2007; Michell, King, & Reast, 2001; Miles & Covin, 2000).
The marketing literature also states the importance of CSR usage in every link of the supply chain. Sustainability is described as part of the super phenomena of marketing, stating that in order to use sustainable marketing, sustainability should start with the first shackle of the chain (Achrol & Kotler, 2011). In order to gain a competitive advantage, companies should rethink their whole supply chain instead of just optimizing small parts along the chain. By working together to optimize the supply chain the companies do not only benefit from cost reductions, but also help to enhance the industry reputation as a whole. (Lee, 2010; Roberts, 2003).
CSR is not only used for enhancing the performance of a firm directly; it also influences the commitment of the employees (Brammer, Millington, & Rayton, 2007; Glavas & Kelley, 2014). This commitment grows stronger when the employees are participating in the companies CSR activities (Kim, Lee, Lee, & Kim, 2010). Participating in these activities does not only have a positive effect on employee commitment but also on their assisting behavior towards colleagues, and the value they attach to the company and their colleagues (Bartel, 2001). Roeck & Delobbe (2012) further found that CSR influences employees in controversial industries, such as oil and gas. CSR has a positive effect on employees trust in the organization in these industries, which in turn positively influences the organizational identification of employees. This explains why employees are the most important stakeholder group to which societal expectations are managed (Bielak, Bonini, & Oppenheim, 2007).
Another way in which CSR benefits companies indirectly is risk management (Godfrey, Merrill, & Hansen, 2009). CSR usage and its reporting enhances the reputation of a company, which in turn adds to the legitimacy of the organization.
CSR can thus be used in order to manage the reputational risk of a company in a controversial industry such as oil and gas (Bebbington, Larrinaga, & Moneva, 2008). CSR can be used for this purpose in two ways, CSR recovery, CSR initiatives are used in order to recover from incidents, and CSR enforcement, CSR used proactively to enhance the company’s reputation (Vaaland & Heide, 2008). A case study among oil companies shows that the proactive use of CSR in human rights and environmental policies helps to mitigate risk (Williams, 2008). Using CSR also lowers the chance of being targeted by shareholder activist groups, which primarily target visible, business-to-consumer companies. However working in a controversial industry raises the chances of being targeted (Rehbein, Waddock, & Graves, 2004). The CSR efforts expected from a company depend on the social and cultural norms of the local community where the company resides, the regulative rules and laws the company is bound to, and whether it is active in a controversial industry (Bertels & Peloza, 2008; Marquis, Glynn, & Davis, 2007).
2.3 How companies use CSR
There is an ongoing debate concerning the definition of CSR (Dahlsrud, 2008). Having the right definition is key since it defines which activities can be labeled as CSR. Despite disagreement on the definition, there is a stream of research indicating how companies use CSR. Matten and Moon (2008), categorizes CSR activities in two broad categories, implicit and explicit CSR. Implicit CSR are the norms, values and rules used by the company to enact with their environment in a responsible manner. These actions are most often driven by society or industry standards and therefore little action is needed from the company itself. Explicit CSR are activities actively
undertaken by the company in order to be socially responsible, for instance sponsoring an event or social cause.
A longitudinal study by Welford (2005), researches what the most important elements of CSR are to companies in different parts of the world. The elements are categorized in four categories: internal aspects (e.g. human rights, non-discrimination, and vocational education), external aspects (e.g. labor standards, local protection, and supplier development), citizenship (e.g. social campaigns and education), and
accountability (e.g. reporting). Internal aspects were found to be the most important, in Europe these aspects focus mainly on being a fair employer by giving equal opportunities and fair wages. Reporting and local protection also were found important in Europe.
Other research finds that CSR is used in order to retain employees. This research shows how high-profile companies turn to CSR in order to be a more attractive employer for the talent they are looking for (Bhattacharya, Sen, &
Korschun, 2008). Sponsoring charity is one of the most basic CSR activities, cases of charity sponsoring date back to the late 1800s. For this reason sponsoring charity is used as an example in numerous articles, regardless of the CSR definition (Crane et al., 2008; Heald, 1970; Smith, 2003). Finally, environmental causes are high on the agenda for big multinational companies, and this is not different for oil and gas companies. Examples range from unused oil platforms in the Gulf of Mexico being transformed into artificial reefs to education to students and teachers about habitat and wildlife preservation (Rondinelli & Berry, 2000).
2.4 CSR in the oil and gas industry
The oil and gas industry is generally not the first one coming to mind when thinking of an industry being good for the environment or society in general. This image might be true when looking back at the 80s and 90s where malpractice was common in relation to human rights and the environment, however oil companies now use CSR in order to enhance the reputation of their companies, the industry and to legitimize their existence (Du & Vieira, 2012; Utting & Ives, 2006). The controversy surrounding the oil and gas industry makes it a test case for many CSR researchers (Watts, 2005).
Oil companies operate in development countries, which brings forth a whole set of new challenges and roadblocks compared to doing business in western
countries. Research finds that one of the main hurdles of doing business in development countries is getting past the corruption within governments (Frynas, 2010). A solution might be to focus on the reporting and transparency aspect of CSR. By being transparent about the revenue streams going to the government for
extracting oil in their country it is harder for the government to demand bribes. Research also finds that the CSR initiatives of these companies should not focus on micro-level projects but on macro-level projects. A case study of oil companies in Azerbaijan shows that oil companies should not focus on small, local, projects such as building a school or hospital, which serve only a small number of people
(Gulbrandsen & Moe, 2007). Instead they should focus on bigger challenges, such as preventing corruption by being transparent about the money paid to the government. In Azerbaijan, for example, these revenues went to the president and benefited only him and his allies. The need to focus on macro-level challenges was found in other parts of the world as well. Research about oil companies in the Niger Delta concludes that for CSR and CCR (corporate community relation) initiatives to work, they have
to address the root of the problems; in the case of Nigeria this is providing a socio-economic infrastructure. An adjacent study found that oil companies used partnership strategies with the local community and government to achieve successful community development projects. These projects focused on building local infrastructure and were found to be most successful and efficient when they were driven bottom-up instead of top-down (Idemudia, 2007).
The oil and gas industry is used for a lot of case studies to draw lessons from for other companies. Most CEO’s believe that society has higher expectations of oil companies than it did 5 years ago and the companies should look for win-win
situations where both society and the company benefits (Anderson & Bieniaszewska, 2005; Bielak et al., 2007; Frynas, 2009). Not only the expectations of society went up, they also expect a different CSR agenda from companies working in development countries. The main issues, which should be focused on, are safety, health, social, and environmental causes (Raufflet, Barin Cruz, & Bres, 2014).
Despite all the knowledge about CSR and how to use it, some CSR initiatives still fail. This is not only the case in the oil and gas industry, NGO’s and companies in other industries fail as well in development countries. The main reason is that they focus on micro-level projects instead of addressing the macro-level challenges (Frynas, 2005; Idemudia & Ite, 2006). Because of the difficult circumstances in these countries one might assume that oil companies collaborate in order to enhance the local situation. However case studies in Azerbaijan and Kazakhstan show that although there are co-operative forums, addressing the social issues in both states, there is little collaboration. Two reasons for the lack of collaboration are that 1) it proves difficult for the companies to agree on a project to work on, and 2) not
everyone believes that collaboration would produce collective goods in these countries (Gulbrandsen & Moe, 2005).
Not all research agrees on the course of action oil companies should take with their CSR strategies. Analyzing the CSR strategies of six oil companies, Du & Vieira (2012), conclude that oil companies should abandon CSR as public relations and instead should focus on minimizing the externalities of their business operations. For example a case study of BP entering the new market of the Faroe Islands shows contradicting. Although the literature finds that CSR has a positive influence on the chances of successfully entering new territories, the CSR reputation of BP did not make it more likely for them to be employed in the Faroe Islands (Anderson & Bieniaszewska, 2005). This would mean that using CSR is not a win-win situation since it did not aid BP in achieving its goals. These researchers would also suggest that instead of focusing on doing something for the community, companies should focus on managing the negative consequences of their business practices.
Other researchers doubt if CSR is capable of filling the void between regulation and legal requirements. It is argued that CSR removes the pressure on companies to meet certain requirements by putting trust in the companies to do it voluntarily (Spence, 2011). Watts (2005), further elaborates on this point by stating that oil companies primarily do business with failed states, which are not able to develop oil fields on their own. In these failed states the main issues are
environmental rights, human rights, bribery, and corruption, he argues that it is hard to see how these issues can effectively be addressed through voluntary self-regulation.
Despite the disagreement on which CSR initiatives firms in the oil and gas industry should focus on in order to gain maximum results, researchers do agree that
these companies should pursue CSR activities. Acting on CSR initiatives, especially making the way of doing business transparent, is positively related to firm
performance in controversial industries such as oil and gas (Cai, Jo, & Pan, 2011).
2.5 Business-to-business companies in the oil and gas industry
The articles described so far mainly focus on the CSR strategies, and the impact of these strategies, of major oil companies, which are generally well known by consumers. However there is some research analyzing CSR usage of smaller oil companies, finding that smaller companies are less likely to disclose information voluntarily (Wang, 2014). This research however focuses, just like the previously mentioned articles, on oil companies. The oil and gas industry consists of a lot more companies which could be influenced, and have effect on, the reputation of the oil and gas industry. These companies deliver a variety of products and services such as oil/gas field exploration, engineering and manufacturing of equipment and heavy lifting services for platform installation and removal. The IRO, the Dutch association for suppliers in the oil and gas industry, already represents 430 different companies. A recent example of how these companies effect the industries reputation is Allseas; who has changed the name of their new vessel, the Pieter Schelte, after a 10 year during campaign of the Centre for information and documentation on Israel. The president of Allseas named the ship after his father Pieter Schelte, which resulted in a outcry of several groups because Pieter Schelte was a convicted Nazi war criminal (Allseas, 2015; Odell & Stacey, 2015). Another example is the American oil field service company Halliburton that has been in the news receiving bad press multiple times. Examples are the accusations they received regarding winning contracts from the American government where only they could bid on and the settlement they paid
for the Deepwater Horizon disaster (“BBC uncovers lost Iraq billions,” 2008; Gilbert, 2014). These examples show what impact business-to-business companies have on industry reputation.
2.6 Theoretical framework
In this thesis the CSR definition of the European commission of communities is used, as mentioned in the introduction; CSR is a voluntary concept whereby environmental and social concerns are implemented in the business operations of a company
(Commission of the European Communities, 2006). This definition is in line with the CSR dimensions of Dahlsrud (2008), who analyzed 37 different CSR definitions to find the underlying dimensions. These dimensions are: environmental, social, economic, stakeholder and voluntary. A CSR initiative thus regards itself with positively influencing the environment, society, or economical development, while interacting with the stakeholders of the company and doing this on a voluntary basis.
From the literature review it can be concluded that there are multiple ways and reasons for companies to use CSR. The ways of using CSR differ from environmental issues and charity to risk management and reputational reasons (Crane et al., 2008; Godfrey et al., 2009; Heald, 1970; Lai et al., 2010). The different ways of how companies use CSR can be found in figure 1.1. The broad categories as produced by Matten and Moon (2008), and Welford (2005), are left out of figure 1.1 since they are to broad, however the elements within these categories are taken into account.
A short description of each category in figure 1.1 will follow. Environmental
issues, activities focusing on the environment. Sponsoring and charity, activities such
as sponsoring charities. Equality, activities securing equality for employees such as no discrimination or use of child labor. Supply chain optimization, activities focusing on
motivating suppliers and clients to use CSR. Transparency, activities focusing on business reporting, not withholding information. Local community, activities focused on the local community of the company.
Figure 1.1: Categories of CSR used by companies
Besides how CSR is used by companies, the literature also identifies reasons why CSR is used at all. A broad distinction can be made between two broad categories, engaging in CSR because of external reasons and engaging in CSR because of internal reasons. These broad categories both hold multiple reasons why a company uses CSR, consisting of both pressures that force the company into using CSR, as well as benefits that can be gained by using CSR initiatives. Figure 1.2 summarizes the different reasons for companies to engage in CSR as found in the literature.
Figure 1.2: Pressure on, and results of CSR usage. (Reasons for companies to use CSR)
This exploratory research is interested in the kind of CSR used by business-to-business companies and the reasons why they use CSR at all.
CSR!Categories!
• Environmental!issues! • sponsoring!and!charity! • Equality! • supply!chain!optimization! • Transparency! • Local!community!External!
reasons!
• Client!pressure! • Consumer! pressure! • Activist!groups! • Company! reputation! • Industry! reputation!Business!
to!
business!
company!
Internal!
reasons!
• Risk!management! • Employee! retention! • Cost!reduction! • increased! company! performance!3. Methodology
The research question will be answered by researching business-to-business companies in the oil and gas industry. As indicated, the oil and gas industry has served as an example for CSR research. The controversial nature of the industry and the fact that oil companies, which are generally well known to consumers, invest a lot in CSR makes it the perfect industry for answering this question (Anderson &
Bieniaszewska, 2005; Bielak et al., 2007; Frynas, 2009). The high investments of the oil companies show that CSR plays an important factor, which suggests that the necessity of using CSR is pushed down the supply chain (González-Benito &
González-Benito, 2006; Roberts, 2003). Although generalization of the findings will be limited since this research focuses on a single industry, this research serves as a first step in research regarding CSR usage in a business-to-business environment.
The methodology section is divided into four sections; research design, data gathering, data analysis, and quality evaluation.
3.1 Research design
Qualitative research in the form of multiple case studies was used to answer the research question. Qualitative research is chosen because this enables the answering of both how and why a phenomenon is happening and not only if the phenomenon is happening (Rynes & Jr., 2004). Case studies are the best way of answering why and how questions in contemporary events. This approach is also particularly useful in new research topics where there is inadequate prior research that can be used
(Eisenhardt, 1989; Yin, 2014). Woodside and Baxter (2013), further elaborate on the usefulness of case studies, finding that they give more in-depth information and
keeping this information in its original narrative. By using multiple cases instead of a single case study allows for better theory development and also enables the research question to be studied from multiple views by different companies and employees, which in turn may find different reasons for using CSR (Eisenhardt, 1991).
3.2 Data gathering
Semi-structured interviews were conducted with a variety of people and companies within the oil and gas industry. Ten interviews were conducted with an average length of 45 minutes. The interviews were held with different companies holding different positions along the supply chain such as platform operators, heavy lifting contractors, consultants, and equipment manufacturers. Eight of the ten interviews were conducted with business-to-business companies, one with a consultant, and one with a platform operator. The interviewees held different position within the companies such as business development director, QHSE manager, and managing director. Due to the sensitivity of the interviews and the demand of some of the interviewees, the
companies and people will not be identified throughout the thesis. In order to identify which quotes came from which interviewee, all interviews were numbered. Each quote will be labeled with the corresponding number, e.g. interview 1. The majority of the interviews were conducted in English, however some interviewees requested for a Dutch interview since they felt they would be able to explain themselves better.
The semi-structured form of the interviews ensured that the same topics were covered in the different interviews, while at the same time left room for new/different questions depending on the answers of the participants (Saunders & Lewis, 2012). The interviews were, with permission of the participants, recorded. At the same time the author took notes to summarize the most important parts of the interview (Berg,
2009). Secondary data was gathered in the form of CSR reports and website
information. A total of twenty websites were analyzed, five of major oil companies and fifteen of business-to-business companies in the industry, and eight CSR reports, five reports from major oil and gas companies and three from business-to-business companies. The smaller number of business-to-business CSR reports resulted from a lack in availability of these reports in business-to-business companies.
The interviewed companies were chosen in order to gain a heterogeneous sample of business-to-business companies in the oil and gas industry. The author has different contacts, which enabled excess to the different companies. Despite the limitations of using a convenience sample, it ensured access to the companies needed for the research (Saunders & Lewis, 2012). The interview protocol can be found in appendix 1.
3.3 Data analysis
After the data was gathered the interviews were transcribed in order to code and analyze them. If there were parts in the recording that could not be transcribed, the author used his summary to recover as much of the details as possible. These parts were marked to ensure they would not be quoted. Although there were cases where a part could not be transcribed the main topic or argument was never influenced. The coding was done by the author instead of a third party in order to take the narrative of the answers into consideration (Pratt, 2009).
Before coding started eight broad categories were produced in order to cover the different subjects and themes of the interview. The broad categories consist of different sub-categories, which are based on the answers of the interviewees. Each interview was first analyzed separately in order to categorize the different quotes,
statements, and arguments into the different categories. The first analyzed interviews produced the majority of the sub-categories, after that relatively few sub-categories were produced until the last couple of interviews that produced no new
sub-categories. All broad- and sub-categories can be found in appendix 2 along with a brief description of each category and the coding scheme.
After the interviews, the secondary data was categorized. The secondary data did not contain information about why CSR is used, only how it is used. Therefore only the CSR aspects category, and sub-categories were used. The subcategories of the interviews were sufficient to categorize both the websites and CSR reports.
After transcription and coding the interviews were analyzed by using a pattern building technique (Yin, 1981). The categories were analyzed in order to find how the different quotes of the interviewees compared to each other and to find the most common reasons for using CSR.
3.4 Quality evaluation
The variety in companies and personnel interviewed ensures that different points of view can be taken into account, which adds to the reliability of the findings. To further increase the reliability of the research, an operator and consultant were interviewed as well, controlling for differences in what the contractors perceive and the intentions of the oil companies (Yin, 2013). Despite these actions to increase the reliability the sample size is to small to generalize the findings, this research therefore serves as an exploratory step into a relatively new research topic. It also has to be noted that all the interviewees came from Western Europe and are also stationed there.
The validity of the research was increased by using triangulation, multiple data sources are used in order to control for the answers of the interviewees (Yin, 2013). Anonymity assurance made sure the interviewees were able to talk freely without restrictions. Despite anonymity the author observed that interviewees were reluctant to use the names of their clients, however this had no impact on the interview since the interviewee would refer to the client as ‘client A’ or ‘a client’.
Finally, the data sample used is a convenience sample, not all companies in the oil and gas industry were asked for an interview. The data set only consists of people located in Western Europe, most of which are based in the Netherlands. Entry to some of the interviewed companies was ensured by the use of contacts of the author in the industry. Therefore it has to be taken into consideration that the author could have biases towards the oil and gas industry or the interviewed companies.
4. Empirical findings
The research question consists of two parts, how business-to-business companies in the oil and gas industry use CSR and why these companies are using it. In the first part the how question will be addressed by looking at which elements of CSR are used by the companies. In the second part the why question will be answered by looking at the internal and external reasons, and pressures for using CSR. Both parts will start with a within-case analysis in order to describe the findings of each
interview in its own narrative. Then a cross-case analysis will be used in order to find patterns, similarities, and differences between the cases. In the final paragraph the additional findings will be described.
4.1 How is CSR used
This section will start by analyzing each case individually in order to find how CSR is used. This analysis will focus on the definition and aspects of CSR used. In the
second phase the cases will be compared in order to find patterns in the answers across the different interviewees. In the cross-case analysis the secondary data will be taken into account as well, comparing the interviews with data from the websites and CSR reports.
4.1.1 Within-case analysis
Interview 1. CSR is described as consisting of two different components, an internal
and external part. “Social responsibility for your employees, so that is the internal part (…) External responsibility is how you treat your clients, not only clients but also your contractors” (interview 1). Although the external part is first described as being focused on clients and contractors, the interviewee later adds donating to charity as a
CSR initiative as well, “We also do sponsorships for children (…) who need to have a chance to have swimming courses” (interview 1). The difficulty of giving a clear definition is recognized by the interviewee as well “I find it a bit difficult to describe to be honest” (interview 1). Another way of how CSR is used is safety, “Safety is one of our core issues in our company, towards our own personnel but also towards personnel we hire” (interview 1). Safety is the most important use of CSR according to the interviewee, branding it a core issue. Charity on the other hand is “not high on the agenda for our business” (interview 1). Thus despite sponsoring a variety of different charities, it is not a core issue for the company.
Interview 2. CSR is defined as the moral responsibility from the company towards its
surroundings and environment. CSR is further described, as another thing companies have to do. “This is sort of a trend we see that might turn into a whole new business that we need to comply with” (interview 2). The most important parts of CSR are part of the QSHE (quality, safety, health, environment) program “I think the things most important are already in place. Again referring to our QSHE department” (interview 2). Other CSR aspects described are: sponsoring charity “we sponsor the Dutch rescue society” (interview 2), green business “we work in the renewables” (interview 2), employee focused “we have perfect employee schemes”, and local community “we have to hire local people” (interview 2). CSR is considered in a broad sense, consisting of every action taken by the company that benefits society.
Interview 3. The interviewee describes CSR as “being positive to the outside world
and show what you find important in this aspect” (interview 3). The focus lies on making sure the company is as little of a burden on its local environment as possible,
“people who live here should not suffer from our presence” (interview 3). The CSR initiatives are focused on safety, environment, charity, local community, and transparency. The sponsorship of charity serves a dual role. “Employees come up with the initiatives and ask us for a contribution” (interview 3). By doing so the company is binding employees to the company, and at the same time helping a cause employees personally believe in. Transparency is described as an important aspect, “the public is not held back by the lack of information” (interview 3). Therefore the interviewee argues that a company has to be open about what they are doing and talk with their stakeholders to find solutions to problems.
Interview 4. CSR is defined as “Doing business in a sustainable way” (interview 4).
The extent of CSR usage is argued to be dependent on the size of the company “given the size of the company we should seek it relatively close to our product and our supply chain” (interview 4). This could indicate that smaller companies engage in less aspects of CSR, this will be controlled for in the cross-case analysis. The interviewee indicates several CSR aspects used by the company: charity, local community, and transparency. Although the company does use CSR, it is not considered as very important “it is not a topic which features relatively high on the agenda. It has not featured at all apart from the face on isolated initiatives” (interview 4). Health, safety, and environmental (HES) issues are said to be high on the agenda, however this is not considered as CSR “for me it [CSR] is not even that relevant for HSE” (interview 4). So HSE seems not to be part of CSR because it is not about giving back, but about not being bad.
Interview 5. CSR is defined as “being socially responsible to the world and in the
countries that you operate” (interview 5). HSE is not considered as CSR “CSR is something completely different (…) HSE concerns itself with no child labor, no pollution and those kind of things” (interview 5). CSR is considered as the aspects used by a company in order to be a good corporate citizen, HSE however concerns itself with not being a bad corporate citizen. CSR is used in the forms of sponsoring charity, employee focused, local community, and transparency. Transparency is said to be one of the most important aspects “we use our own norms and values if we operate somewhere (…) transparency is one of the most important things, you need to show what you believe in” (interview 5).
Interview 6. The definition of CSR focuses on the awareness of the company’s impact
on its surroundings “You have to be aware of the impact of your activities on your surroundings, and in particular how you deal with this” (interview 6). CSR is defined as a broad theme, therefore a wide range of CSR aspects are identified: safety,
environment, charity, green business, local community, and transparency. It is argued that sustainable business and quality are CSR because, “In our product development we focus strongly on how we can bring the impact of our products down to the minimum” (interview 6). Safety is one of the most important CSR aspects “Safety is one of the subjects which should be embedded in the companies DNA” (interview 6).
Interview 7. The interviewee indicates safety, environment, charity, employee
focused, and transparency as CSR aspects used by the company. CSR is defined as “being responsible towards your surroundings, the environment, your people, and in general” (interview 7). The interviewee goes further by stating that CSR is not only
doing good to your surroundings, but also “not doing bad” (interview 7). Although some safety matters are considered as CSR, the interviewee does indicate that other parts of safety are part of redundancy, “A part of safety overlaps with exterminating danger, this again lies close to redundancy” (interview 7). Drawing a clear line of what is considered CSR and what is not proved to be difficult.
Interview 8. CSR is defined as “the different rules and processes inside the company
that drives the way we can conduct business with respect of the environment, people, and all consequences of the projects we are developing” (interview 8). The indicated aspects focus on environment, employees, and the local community. The interviewee further elaborates on how the company makes sure their code of conduct is
maintained, “a way for the people is to call this number and to raise any concerns they have which could breach the code of conduct” (interview 8). CSR focuses particularly on environmental issues, developing local projects in the countries the company operates and empowering employees to raise concerns when something seems wrong.
Interview 9. This interview was conducted with a consultant working in the oil and
gas industry. The answers are based on his experience in different companies within the industry. CSR is defined as focusing on the safety, environmental, and social aspects. “Whichever company you work for, they are all pretty much the same with the main focus on safety, environment, and social standards” (interview 9). The ranking of importance for the different aspects is very clear, “Well I would say safety is the number one and close behind it environment” (interview 9).
Interview 10. This interview was conducted with a platform operator; therefore the
answers might differ from those of the business-to-business companies. CSR is defined as “being responsible for the surroundings of the company (…) the whole HES spectrum fits within CSR” (interview 10). Besides these aspects the company also sponsors charities as a form of CSR. However the HES spectrum is the most important “the HES aspects always stay in place, whatever the cost” (interview 10). The other CSR aspect, donating to charity, is, “dependent on the financial position of the company” (interview 10).
4.1.2 Cross-case analysis
The interviewees have different definitions for CSR, as shown in the within-case analysis. One interviewee recognizes “I find it a bit difficult to describe to be honest” (interview 1). This is no surprise since scholars themselves are not able to agree on a single definition (Dahlsrud, 2008). The biggest differences are whether CSR is about doing good or also about not doing bad, and related to this point, whether health and safety is part of CSR. One interviewee would say, “Well I would say safety is the number one” (interview 9), while another interviewee sai, “no CSR is something completely different” (interview 5). This issue will be further discussed in the corresponding paragraph below.
Environment
Environmental issues are the most common use of CSR indicated by the interviewees. All the interviewed companies have HSE (health, safety, and environment) programs in place in order to monitor their environmental impact. Environmental issues are also frequently stated on websites and in the CSR reports of both business-to-business
companies as well as oil companies. These projects concern themselves with making sure the company’s activities will not cause pollution, “we are morally obliged to make sure we don’t cause soil pollution since this may harm future generations” (interview 3), and on the other hand developing the products so they are friendlier to the environment and the people working with the equipment. As one interviewee put it “Our product development is strongly focused on minimizing their impact on the environment” (interview 6). Environmental issues were not only indicated as an important aspect of CSR by the business-to-business interviewees, but also by the operator. The same results were found when analyzing the secondary data, nearly all analyzed data stated environmental issues one way or another.
A reason why environmental issues are a much-used form of CSR in the oil and gas industry might be because of its bad reputation towards the environment. “The oil and gas industry is very controversial, you take something out of nature so you are bad by definition” (interview 3). Another interviewee stated “some aspects of CSR, such as safety and environment are more important” (interview 6). These companies thus could be compensating for their bad environmental reputation. Another explanation is that the government imposes strict rules and regulations on environmental issues. This point will be further elaborated in part 4.2.2.2 about why CSR is used.
Social projects
Social projects and sponsoring charity is another aspect of CSR used by the companies. Although both the operators and the business-to-business interviewees mentioned the use of this aspect, their websites tell a different story. The websites of oil companies are full of examples how they support charity; the business-to-business
websites however contain far less cases. The interviewees of the business-to-business companies explained that they focus on charities, which are close to the corporate business. For example an offshore contractor said: “[we sponsor] the KNRM [Dutch royal rescue association], that is not really directly our business, but it is touching our business” (interview 1). Another interviewee explained they are focusing on issues close to their employees “We have our own social fund (…) the purpose is that
employees come with initiatives (…) for a charity or other social cause” (interview 3). A reason why business-to-business companies report less often on their
contribution to charities could be because they are not doing it for reputational purposes. One interviewee commented, “You do it because it is the right thing, you are not going to add a page to your website that highlights all the CSR things you do” (interview 7). Although the interviewees recognize the importance of reputation, it is the reputation within the industry that counts, “[how important is reputation in the industry?] We think it is very important” (interview 1).
A reason for the use of this CSR aspect might be because it is simple to use. Sponsoring charity requires little effort; except for the money donated the company does not have any obligations. An additional reason is that employees of the company might feel better because their company sponsors charity, “let’s be honest, a reason because you sponsor charity is because it gives you a good feeling” (interview 6).
Local community
Local community is the third CSR aspect often used by the interviewed companies. Local community refers to CSR initiatives taking place where the company is based as well as where the company operates and executes its projects. As the interviewees put it, “Operators and contractors are, now a days, required to develop local [content].
Which means we have to hire local people” (interview 2) and “[our production] causes disturbance in the surroundings, this can be ignored by the company, (…) however I think it is important that you are conscious about it and involve the local community” (interview 6). Although the government of the host country obliges the companies to do something in the form of local content development it is still
considered as CSR by the interviewees. As one interviewee put it “It is voluntarily to the extent that we can choose to bid on the contract or not” (interview 4). Analyzing the secondary data shows how this demand of the host country flows down the supply chain. All data analyzed from oil companies consist of CSR focused at the local community of where the oil company operates. From the business-to-business companies, significantly less information regarding this CSR aspect could be found.
The reason for using this aspect of CSR is thus because the companies are obliged to do so when taking on certain contracts. One could therefore argue that this aspect is not really CSR since it is not entirely voluntary. However as the above quote points out, bidding on a contract is voluntary.
What the company needs to do when winning the contract can also be to the company’s own assessment, “I have seen some tenders where they openly ask you what you are going to do and not tell you what you should do” (interview 5). This aspect is closely related to sponsoring charities, especially when looking at quotes regarding sponsorship of where the company is based. For example “for sponsorship we also look at what we can do here locally” (interview 3) and “we invite the
children’s city council to come to our company” (interview 7). However because these initiatives often go further than just sponsorship, they require more effort from the company involved and they are focused on where the company is present, it is regarded as an additional CSR aspect.
Health & Safety
The last major CSR aspect, which the majority of the interviewees talked about, was health and safety, which is also part of the HSE programs within the companies. All corporate websites and CSR reports dedicated attention to safety and health programs. Some examples are “we are extremely active in safety programs” (interview 2), “safety is one of our core issues in the company” (interview 1) and “I would say safety is the number one” (interview 9). Safety is thus one of the most important aspects in the oil and gas industry. However when looking at the definitions of CSR, the interviewees do not agree whether safety is CSR or not. Some interviewees define safety as CSR because it is taking care of your employees and the people working with the equipment you produce. Other interviewees state however that, “safety and health is something different which exists besides CSR (…) I would not say safety falls under CSR” (interview 5). In the Netherlands there is legislation about work safety (Ministerie van sociale zaken en werkgelegenheid, 2015). Companies are bound by law to create a safe working environment for their employees. The
voluntary definition of CSR is thus violated and therefore these safety programs are, by definition, not CSR.
Some interviewees talked about additional safety and health initiatives; they offered employees voluntary health check ups. These initiatives are labeled as CSR; it is an additional service for the wellbeing of the employees. Although there were some interviewees claiming their company took care of its employees “We have perfect employee schemes, people working for us do not only have a very good salary but also all kinds of perks” (interview 2), there was only one interviewee who focused specifically on health and safety benefits for its employees “The company provides annual health checks with third party doctors (…) there are no consequences attached
or anything” (interview 10). Health & safety is thus a very important issue within the companies of the oil and gas industry, however health & safety as a CSR aspect seems to be less important.
More CSR aspects
Other CSR aspects, which were less often mentioned during the interviews, are transparency, employee focused, and green business. Transparency concerns itself with reporting and being open about the way the company does business. Corruption and bribes are not uncommon in the oil and gas industry and as Frynas (2010), uncovered, transparency helps to fight this problem. For the interviewed companies this is one of the reasons for being transparent, “anti corruption is something we work really hard on” (interview 6), and “we do not pay bribes or anything although this is normal in some countries” (interview 7). Another reason for being transparent is because it is found important to show what the company believes in. “It is important to show what you are doing, being transparent” (interview 3), and “I think one of the most important things is to show what your believes are as a company” (interview 5).
Although employee well-being is an important reason for using CSR, which will be further explained in chapter 4.2.2.1, there are relatively few initiatives focused on employees. As mentioned earlier companies take care of their employees by having good employee schemes, health checkups, and by taking care of their foreign employees, “we are unconsciously working on being a good employer (…) we build houses abroad for our employees working at our factory” (interview 7; Interview 2 & 10). Most initiatives however are focused on external issues. As mentioned in the within-case analysis, there is one case where this is combined by having employees
come up with causes to sponsor that are close to them, however this was only one case (interview 3).
Some interviewees mentioned green business as part of their CSR usage. Green business has different implications such as product development to make products more sustainable or working in a green industry such as the renewables industry. “There is also a lot of social responsibility in the company (…) we work in the renewables industry” (interview 2). “In our product development we focus strongly on how we can bring the impact of our products down to the minimum” (interview 6). In the secondary data green business was recurring as CSR as well. This aspect of CSR is mainly occurring at major oil companies and bigger business-to-business companies. A reason might be that investments are high and since it was found that sustainable value needs time to develop, smaller companies may not have the means to invest (Hart et al., 2003).
As validly mentioned by an interviewee, the aspects of CSR used might be influenced by the size of the company (interview 4). However analyzing the interviewed
companies indicate that this is not the case, size did not influence the amount, or aspects of CSR used by the company. It could well be that the CSR initiatives undertaken by bigger companies are of a larger scale. However sicne this data is not collected this question cannot be answered here.
4.2 Why is CSR used
The interviewees described both internal and external reasons for using CSR. Although there were more external reasons than internal reasons for using CSR, the interviewees talked just as much about the top two internal reasons as the top two
external reasons. This section will start with a within-case analysis, looking at the reasons for using CSR in each interview separately. The second part will be the cross-case analysis consisting of two parts, the internal and external reasons for using CSR.
4.2.1 Within-case analysis
Interview 1. Two reasons were indicated why the company engages in CSR. The first
reason is because of client pressure. “We recognize that indeed [CSR helps to get a better rating by oil companies]” (interview 1). Thus because the company uses CSR, they are rated better by oil companies, which means the company should have a better chance of winning contracts. However it is also recognized that CSR is only a small portion of how they are rated, “if they rate tenders, 70% is price, 20% is local content, and 10% is techniques and ethics etc.” (interview 1). The second reason for using CSR is because of the norms and values of the company. The company is thus using CSR, not to get anything in return, but because it is the right thing to do. “You have an ethical relationship with people, so you treat people with respect” (interview 1). Although using CSR helps to some extend with the business of the company, the main reason for using it is because of the company’s own norms and values.
Interview 2. The first reason for using CSR is because of the rules and regulations in
place. “We do have some CSR that we are obliged to do in order to do the work we are doing” (interview 2). Whether this can be considered CSR will be discussed in chapter 4.2.2.2 Rules and regulations. The second reason for using CSR are the norms and values of the company. As put by the interviewee, “It is common sense and normal to live your life and your working life in a socially responsible manner. We are not animals” (interview 2). Thus although the company is forced to use CSR, it is
also the normal thing to do, “it is the way we are” (interview 2). Although there are no further reasons given for using CSR, the interviewee does recognize that it helps with employee retention, “it helps everywhere, having employees or keeping employees” (interview 2), reputation, and client favorability “the clients will like you more, of course that does not hurt” (interview 2). Using CSR thus holds multiple benefits for the company, while at the same time being the right thing to do and required by rules and regulations.
Interview 3. The interviewee indicated a range of internal and external reasons why
his company uses CSR. The internal reasons are employee retention, “you want to be social towards your employees” (interview 3), and cost reduction “in combination with the environment the opportunities for cost savings are very important” (interview 3). The external reasons are client pressure “it does help with winning contracts” (interview 3), reputation “ our (CSR) goal is to have a positive image” (interview 3), and other stakeholders “it also helps when talking to city hall or the government to be able to positively show what you are doing” (interview 3). Besides these reasons it is also recognized that the use of CSR is driven by rules and regulations. However as the interviewee puts it “it is a combination, we wanted to do it anyway” (interview 3), thus claiming that although they are forced to use CSR, they would do it anyway because of the other reasons.
Interview 4. The first reason for using CSR is because of the norms and values of the
company, “one would be a sense of doing good. Very simple, it is an ethical thought” (interview 4). Besides using CSR because it is ethical, stakeholders are increasingly demanding these initiatives “the outside world is increasingly demanding across all
industries that companies engage in these activities” (interview 4). It is further argued that this outside pressure is for a lot of companies the main driver for using CSR “I think a lot of companies do this because of the peer pressure (…) There are relatively view players that have a true genuine strategy in this” (interview 4). As a final point the interviewee points out that engaging in CSR is forced by clients in some instances, “We are looking at starting operations in Nigeria and it is required for doing business” (interview 4). Clients operating in Nigeria thus pressure their contractors to use CSR because they are bound to do so by the Nigerian government. Although this could also be seen as engaging in CSR because of the rules and regulations, the company is pressured by their clients to do so, therefore it is considered as client pressure.
Interview 5. One of the major reasons for using CSR comes from oil companies who
are obliged by governments to do some CSR when working in their country, “today, particularly in West-Africa, oil companies are obliged to produce some local content, which they then force on to us” (interview 5). The oil companies are thus pressured by local governments to use CSR and they in turn pressure their contractors. Another pressure comes from other stakeholders to the company such as consumers, investors and banks, “it is important to influence the public opinion by showing that you do certain things for big global companies in order to make sure investors, the public, and the whole chain, invest money in the company” (interview 5). Thus using CSR positively influences the reputation of the company, which in turn makes investors want to invest in the company. A positive reputation also helps with retaining employees, “[a positive reputation] means you possibly are able to choose better employees, or have a wider selection to choose from” (interview 5). Thus although pressured by clients using CSR also has favorable outcomes for a company.
Interview 6. The first reason for using CSR is rules and regulations “the moment we
talk about the sustainability of your product and your production processes it is directly related to laws and rules” (interview 6). Another reason is the pressure from stakeholders such as banks and the government who demand these activities, “we see this from the government in order to get insurance but also from financial institutions such as banks that more frequently demand this” (interview 6). The pressure to engage in CSR is also felt by clients, “the moment we bid on a tender we are asked what we do on CSR” (interview 6). Besides pressure to engage in CSR the company also uses it for employee retention, “it also helps with attracting new employees. The younger generation thinks it is more important to consider what kind of impact a company has” (interview 6). There is thus a reason for the company to use CSR on a more voluntary basis, however there are numerous outside pressures demanding CSR usage as well.
Interview 7. The most important external pressures come from the rules and
regulations and clients. Both these pressures are primarily focused on safety, “oil companies are afraid for a second Macondo disaster (…) therefore safety and
redundancy are very important” (interview 7), and “our products all have to meet very strict offshore rules and regulations (…) the safety standards are therefore very high” (interview 7). However as argued in chapter 4.1.2 safety is not considered CSR. Therefore pressure for high safety standards are not considered as pressure to use CSR. The discussion whether pressure from rules and regulations are CSR at all can be found in chapter 4.2.2.2 rules and regulations. The interviewee also indicated two internal reasons for engaging in CSR, because of the norms and values of the
think it is normal, that is the way you treat people” (interview 7), and for employee retention, “when you treat people well, they will be more attached to the company” (interview 7). The reasons for using CSR mainly come from inside the company, as described in the quote above the company does not use CSR to gain a better
reputation in the industry.
Interview 8. Client pressure is one of the major pressures according to the
interviewee: “You see it from the top of the chain to really the bottom [sic], the top being the driver, the oil and gas majors” (interview 8). It is argued that CSR usage is increased and every company pressures its contractors to increase their usage. Another driver are the rules and regulations, “I think the evolution of the rules and regulations are also giving a impact” (interview 8). It is further argued that CSR is more used because of the rules and regulations, as a company you do not want to just comply with the rules since you might slip up, therefore CSR usage is increased to fall well within the requirements. A benefit from using CSR is the increase in
reputation; “we have suffered very recently from big compliance issues that forced us in being very seriously with these elements” (interview 8). Another benefit comes from employee retention, “as long as you grow your CSR and you grow your ethical values and environmental values in the company, you grow your employee culture” (interview 8). There are thus multiple reasons for using CSR, on the one hand the company feels the pressure form the rules and regulations and their clients and on the other hand using CSR benefits the company by giving them a positive reputation and growing their employee culture.
Interview 9. This interview was conducted with a consultant in the oil and gas
industry. The answers are based on his experience from working with different companies within the industry. The interviewee was only able to give answers about external pressures on CSR usage, not about internal motives.
It is argued that bigger (oil) companies are very aware of the importance of a good reputation; therefore they invest relatively a lot in CSR. “Bigger companies are very conscious over their reputation in that area, so that probably has got a higher factor within their organization than in some, perhaps small companies or operators” (interview 9). The interviewee moves on by saying that because of this awareness these companies pressure their contractors to become more active in CSR as well, “Company A is at the top and has its values and standards, and he would expect that from any contractor working for them, that is the starting point” (interview 9). Thus contractors can always do more but have to do the minimum in order to be hired by the company at the top. The standards from the companies at the top of the supply chain are in turn driven by rules and regulation, “[did CSR become more important?] Yes I would say that, but more related to the environmental side as EU and
international standards are changing towards reduction of emission as they accelerate global warming” (interview 9).
Interview 10. This interview was conducted with an operator and therefore the
questions differ from those of the business-to-business companies. The questions focused on both the reasons for them to use CSR, as well their expectations from their contractors.
The interviewee explained that CSR evaluation plays a role in rating new contractors; this evaluation primarily focuses on the HES aspects, which are the most
