Sustainability Challenges in the Gas and Oil Industry

Sustainability Challenges in the Gas and Oil Industry

Managing ethical risk starts with managing the risks to a company’s stakeholders. If a company protects its stakeholders, it is protecting itself against accidents. If an activity is determined to carry a high risk of injury or damage to stakeholders, it should be redesigned; safeguards should be put in place to lower or eliminate the identified risk. Lowering risk to stakeholders, lowers occurrence of accidents.

BP, Exxon and the fracking industry face many of the same risks, such as explosions, spills and environmental contamination. Each has a potential to greatly damage the environment and their stakeholders. BP and Exxon face a decreasing supply of resources; they may be more apt to take bigger risks in order to meet customer demand. The fracking industry faces customer uncertainty; no one is positive on the safety of these activities. All three also encounter the risk of a negative reputation; each must gain and maintain the trust of the public.

Leadership sets the tone for a company’s culture. If leadership makes ethical decisions and is committed to protecting its stakeholders, the rest of the company will follow. Policies and safety precautions will be carefully and followed throughout the company, if leadership models and enforces it. If an operation is deemed to have too high a risk, it will be redesigned or aborted before an accident has a change to occur. The oil and gas industry could benefit from leadership that is focused on protecting its stakeholders and the environment, instead of just focusing on the bottom line.