University of Vaasa - Vaasan yliopisto

opportunities; environmental sustainability as the capacity to preserve quality and
reproducibility of natural resources (Bevacqua & Casciani 1999).
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This shift is demonstrated, among other indicators, by the remarkable growth in
corporate codes of conduct and social reporting. “Oil companies have also embraced
major international CSR initiatives such as Kofi Annan’s Global Compact and the
Global Reporting Initiative” (Frynas 2005: 581).
Furthermore, oil companies have initiated, funded and implemented significant
community development schemes. According to one estimate, global spending by
oil, gas and mining companies on community development programs in 2001 was
over US$500 million. The biggest world oil and gas companies spend well over
US$100 million on community investments every year (Frynas 2009). Nowadays oil
and gas companies help to build schools and hospitals, launch micro-credit schemes
for local people and assist youth employment programs in developing countries.
They participate in partnerships with established development agencies such as the
US Agency for International Development (USAID) and the United Nations
Development Program (UNDP), while using NGOs to implement development
projects on the ground (Frynas 2005; Frynas 2009).
It is often assumed that the rise of CSR within oil and gas companies can be traced
directly back to globalization and a concomitant expectation that firms would fill
gaps left behind by global governance failures, while at the same time it became
easier for NGOs to expose corporate behavior in far-flung corners of the planet. In
this way oil and gas companies have been pressurized to do something about the
environment, community development or global warming. However, it is possible to
assert that the oil and gas firms’ motives for social engagement are much more
complex than simply a response to external pressure. These motives greatly limit the
positive developmental potential of corporate social engagement. Frynas (2005)
identifies four important factors impelling firms to embark on community
development projects:
� obtaining competitive advantage;
� maintaining a stable working environment;
� managing external perceptions;
� keeping employees happy.
In order to analyze current trends in corporate social responsibility practices carried
out by the nine major international oil and gas companies in developing countries,
this study presents a benchmark analysis 7 based on the sustainability reports the
companies involved published during the last reporting year (2007). By means of the
benchmarking it is possible to identify the common CSR practices carried out in
local communities by companies, the most innovative approaches and tools applied
and used, and the best practices undertaken. The benchmark analysis may be used as
an effective tool to improve company performances (IPIECA & API 2005) and to
7 FEEM has gained a solid knowledge on sustainability dynamics and corporate social responsibility practices
within the oil and gas sector during the last five years. Since 2004 FEEM has been actively supporting the Eni
Sustainability Department working on the analysis and development of sustainability communication and
reporting tools and strategies, with particular attention to CSR issues.