The Struggles of Working Towards a Low Carbon Future

Riley Lam

University of Manitoba

GMGT 1010: Business and Society

December 6, 2020

Howard Harmatz
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The Struggles of Working Towards a Low Carbon Future

Over the past few decades, greenhouse gas emissions have skyrocketed astronomically

and because of this, many governments and firms aim to regulate this. According to the United

States Environmental Protection Agency (EPA), global carbon dioxide emissions have increased

by an estimated amount of 90% since the 1970s. Because of this increase and the threatening

effects of global warming, many firms today are implementing various plans for sustainability.

However, just as many companies fail or struggle to do the same. One of said companies is

British Petroleum, or more popularly known as BP. BP faces many struggles in moving towards

a low carbon future. Through the analysis of BP’s scope emission and lack of stakeholder

inclusivity, the problems BP poses today, and the responsibility BP holds, will prove how BP

and companies alike struggle to solve issues of the past or current in terms for a low carbon

future.

What are Scopes and Who do They Affect?

Ever since its foundation in 1908 (British Petroleum), BP though under a different name

back then, has had various impacts across the world. At first glance, BP seems to be regular

energy producing company according to their business model, “Investing in innovative companies

across our value change to help accelerate and commercialize new technologies, products and

business models that we believe can benefit BP and global energy systems”. They supply energy,

gas, and oil worldwide, creating stakeholders everywhere. Fuel companies have three types of

emissions known as scopes and all stakeholders can be categorized within these scopes. What is

important here are scope 3 emissions. According to the GHG Protocol Corporate Standard, these

emissions are “all indirect emissions that occur in the value chain of the reporting company” (GHG

Protocol). This includes outsourced activities, waste disposal, employee commuting, everyday
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consumers, etc., and usually makes up the majority of emissions produced from a company. While

the BP’s website does provide different sources containing annual reports about their gas emissions,

it does not necessarily include Scope 3. This is because the energy industry “has no standard

definition of scope 3 emissions” (Rathi, 2020), allowing for companies to define it however they

want. Rathi’s article suggests that since BP does not include scope 3 emissions in their reports, BP

does not claim responsibility for any scope 3 emissions.

The Exclusion of Scope 3 Emissions

There are a few reasons why the choice to leave out important data such as the scope 3

emissions makes it difficult for firm to move towards a low carbon future. This is exclusion ignores

a large majority of stakeholders for BP and making the annual reports misleading. According to

BP’s CEO Bernard Looney announcement in February 2020, he states scope 3’s emissions to be

over one billion metric tons (British Petroleum), which is more than scopes 1 and 2 combined.

However, the statistics for Scope 3 are not included in the annual reports. The exclusion of such an

important statistic creates the misconception that BP is producing less emissions than they actually

are, and BP may even believe that themselves. If the company itself does realize how much gas

emissions they are responsible for, people who lie within the category of scope 3 will not realize the

effects and consequences they are having on the Earth due to their ignorance. The lack of

stakeholder inclusivity does not serve the interests of all stakeholders as the majority of them are

ignored. The interests of stakeholders in this scenario are to sustain the environment so that they can

continue the lives they live.

The Threats Associated with BP

Energy and oil companies have always faced various adversities in terms of environmental

control. From oil spills to high gas emission levels, there never seems to a proper solution. This may
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be because companies like BP do not want to work towards a low carbon future. Afterall, the less

they are tied down to environmental control regulations, the more they can produce and sell. BP’s

problems have come to light due to them being one of the leading companies in their industry. Not

only that, but they are quite infamous for the 2005 explosion in Texas, Deepwater Horizon oil spill

in 2010, and a few other incidents. BP by no means is new to the spotlight, as there are previous

cases of the corporation causing incidents, nothing is stopping them from creating future incidents.

The Deepwater Horizon Oil spill for example, is the largest oil spill in American History. By 2019

most of the oil had been recovered, the surrounding ecosystems had not (Ma, 2019). Local

stakeholders such as fishermen, local communities, and tourists were affected as well, both directly

and indirectly (Brennan, 2013). Though BP has paid off its repercussions and did their best to clean

up after themselves, the company cannot make up for the destruction leftover. BP may provide

solutions to their problems, but whether they actually have an effect is a different story.

Are BP’s Solutions Really Solving Anything?

The solutions BP provides actually have a few flaws in them. In recent years, BP has

suggested various solutions to their high carbon emissions. In February 2020, Looney announced

that the company will aim to cut its greenhouse gas emissions to net zero by 2050. BP is not the

only company aiming to do this, Shell and Total also announced that they will cut their emissions to

net zero by 2050. At a glance, this may seem like a good thing. These companies are attempting to

work towards a low carbon future. However, Looney states that BP does not expect progress to be

linear in his speech at the ambition launch on February 12th, 2020 (British Petroleum), meaning

emission levels can fluctuate up and down or no progress could be made until later. BP also intends

to invest more money into their reforestation plans in Kenya and Tanzania hoping that it will

“mitigate the negative impact of deforestation on greenhouse gas emissions” (British Petroleum).
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This only acts as a loophole to allow BP and other companies that do the same to continue large

volumes of gas and oil and may pose other threats as well. According to the Intergovernmental

Panel on Climate Change (IPCC), most Carbon Dioxide Removal (CDR) plans could have

significant impacts on land, energy, water or nutrients if deployed at a large scale (IPCC, n.d., p.

17). The large-scale afforestation BP has in mind, “may compete with other land uses and may

have significant impacts on agricultural and food systems, biodiversity, and other ecosystem

functions and services.” (p. 17). These so-called solutions that BP and other oil companies

pledge to maintain do not actually solve anything. They only aim to work around the problem or

are wishfully thinking that the problems will go away. BP will only receive results after three

decades and their current state can worsen during that time, their reforestation plan only allows

them to continue producing gasses and oils under the pretense carbon emission reduction when it

can actually pose further problems. The company struggles to solve problems because they do

not address their difficulties directly.

Responsibilities

BP and companies alike hold many responsibilities. However, it is debatable whether or not

they have upheld all of them. For the most part, BP has upheld their ethical responsibility. They

provide an honest product and deal with suppliers fairly. Complying with environmental laws,

industry best practices, and ensuring reasonable levels of workplace health and safety is something

they find difficulty with. For example, their previous incidents like the oil spills and explosions,

have sparked interest in the company’s corporate social responsibilities, ethics, and government

control (Robinson, 2016). Safety has always been an issue within the company, it remains critical

that proper environmental and employee safety is practiced along with government monitorization.

Those instances become a social responsibility once it affects society directly or indirectly. For
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example, in 2018 BP was given permission to start drilling for oil off the coast of Nova Scotia,

Canada. Had something gone wrong like the Deepwater Horizon Oil Spill, the effects would be

heavily detrimental to the Canadian economy on the east coast as fisheries makeup a large majority

of the economy there. According to the Government of Canada, fishing contributed to $1.7 billion

to the Atlantic Canadian economy in 2017, which was equal to 1.6% of Gross Domestic Product

(GDP). The marine life and ecosystems would be destroyed, and Canada would lose out on over a

billion dollars. Therefore, it is BP’s responsibility to ensure proper safety measures are in effect

because their actions do not only affect themselves, but also the people and area they operate in.

Taking Responsibility

Only after analyzing their lack of stakeholder inclusivity, problems the company has, and

previous incidents, can BP really begin to take responsibility for their actions. If BP becomes

inclusive of their Scope 3 emissions, they can truly realize the gravity the amount of carbon

emissions they contribute to global warming. This is not meant to target BP, but to shed light on

what they lack and need to fix. Just like BP, plenty of other companies are doing the same as them,

like Shell and Total, and need to re-evaluate their methods. These companies need to prevent the

issue before it even becomes a problem. What BP plans to do for the future is by no means bad at

all, but the company needs to do more if they wish for a low carbon future. It is easy for Looney to

make these decisions and public announcements while he is CEO now. The previous CEOs have

terms each lasting up to 10 years (BP). It is quite difficult to believe that Looney will last until 2050,

30 years later. By then, he will no longer be in power and no longer hold any responsibility. BP and

others in the industry need to look at more immediate solutions now for the future.
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To Conclude

BP’s lack of stakeholder inclusivity, past and current endeavours, and responsibilities are all

reasons why the company struggles to work towards a low carbon future. The company’s exclusion

of scope 3 emissions misleads readers to believe that the current situation is not as bad as it actually

is. It is crucial to present true statistics so that readers can understand the magnitude scope 3

emissions have. The company still struggles to deal with past and current problems because of the

long-lasting consequences they have such as the destroyed ecosystems or lives that were lost in

accidents. Lastly, the difficulties BP has with holding responsibility over their actions are not up to

par. Dealing with all of this is by no means an easy task. However, when BP can overcome their

adversities, is when they can truly work towards a low carbon future.
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REFERENCES

Brennan, K. (2013, November 29). A Stakeholder Analysis of the BP Oil Spill and the

Compensation Mechanisms Used to Minimize Damages. Usf.

https://www.usf.edu/business/documents/undergraduate/honors/thesis-brennan-

katelyn.pdf

British Petroleum. (2010, July 27). BP CEO Tony Hayward to step down and be succeeded by

Robert Dudley. BP. https://www.bp.com/en/global/corporate/news-and-insights/press-

releases/bp-ceo-tony-hayward-to-step-down-and-be-succeeded-by-robert-dudley.html

British Petroleum. (2020, February 12). Reimagining energy, reinventing BP. BP.

https://www.bp.com/en/global/corporate/news-and-insights/speeches/reimagining-

energy-reinventing-bp.html

British Petroleum. (n. d.). Our Strategy. BP. https://www.bp.com/en/global/corporate/what-we

-do/our-strategy.html

Government of Canada. (2018). Sectoral Profile – Fishing and Fish Processing: Atlantic Region

2018. Government of Canada. https://www.jobbank.gc.ca/content_pieces- eng.do?

cid=14950

Greenhouse Gas Protocol (n. d.) FAQ. Ghgprotocol.

https://ghgprotocol.org/sites/default/files/standards_supporting/FAQ.pdf

Intergovernmental Panel on Climate Change (n. d.). Special Report: Global Warming of 1.5°C,

Summary for Policymakers. IPCC. https://www.ipcc.ch/sr15/chapter/spm/

Ma, A. (2019, April 19). Nine Years Later, the BP Oil Spill’s Environmental Mess Isn’t Gone.

Mother Jones. https://www.motherjones.com/environment/2019/04/deepwater-horizon-

bp-oil-spill/
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Rathi, A. (2020, February 25). BP’s “net zero” climate plan doesn’t quite add up. World Oil.

https://www.worldoil.com/news/2020/2/25/bp-s-net-zero-climate-plan-doesn-t-quite-add-

up

Robinson, R. (2016, November 28). BP: A Lesson Learned on Social Responsibility. Wordpress.

https://russiarobinson.wordpress.com/2016/11/28/bp-british-petroleum-a-lesson-learned-

on-social-responsibility/

United States Environment Protection Agency. (n. d.). Global Greenhouse Gas Emissions Data.

Epa. https://www.epa.gov/ghgemissions/global-greenhouse-gas-emissions-data