Based on the research done by KPMG (2015), companies in the oil and gas sector are likely to publish Corporate Responsibility information along with their financial report. However, this does not mean that they are having an integrated report. Royal Dutch Shell does not have an integrated …show more content…
Therefore, Royal Dutch Shell is working with different types of supply chain. To create value along its supply chain, Royal Dutch Shell must exceed the value of aggregate inputs on a sustainability basis. Most of the Royal Dutch Shell projects are highly capital intensive and risky, thus the company usually partner up with host government as well as other oil companies. In term of economic value, Royal Dutch Shell helps the local people by creating working environment and building good infrastructure. Three major directives of Royal Dutch Shell’s social support include providing an access to energy; encouraging local enterprise by, for example, training for jobs in the oil and gas industry; and by promoting road safety. However, when it comes to the environmental value creation, the company is still depleting the natural …show more content…
However, the world will need more energy with less CO2 emission. For this reason, Royal Dutch Shell is having a new strategy called “Let’s Make the Future” to invest more in renewable energy that could serve the demand while also reducing the CO2 emission. It is the ambition of Royal Dutch Shell to improve company’s capital efficiency while creating new strategies to reduce the carbon emission in the future.
Conclusion and Recommendation
A step from doing business, Royal Dutch Shell also creates value for the society. As mentioned before, the company has a directive to help the local society and creating economic value. However, in most of the practice, the company does not really care about the society but more in making profit. The case in Nigeria is one of many other examples that proof the Royal Dutch Shell to be the company that only maximizing profit rather than create share value.
If the company could realize the new strategy, there is a potential that Royal Dutch Shell could improve its capital efficiency by reducing half of their spending in the next several years. Especially since the last merged with BG, the company could reduce the number of staffs while increasing the