Standardized CSR and Climate Performance: Why is Shell Willing, but Hydro Reluctant?

FNI Report 4/2007. Lysaker, FNI, 2007, 26 p.

This report aims to contribute to the ongoing discussion concerning whether CSR merely serves to streamline company rhetoric or also has an influence on actual efforts. We discuss the tangible effects of CSR instruments on the climate related rules and performances of the two differing oil companies Hydro and Shell. First we explore whether similar CSR instruments lead to similar climaterelated rules and practices in the two companies. Both Hydro and Shell adhere to the Global Compact (GC), the Global Reporting Initiative (GRI), the Carbon Disclosure Project (CDP) and the Global Gas Flaring Reduction Public–Private Partnership (GGFR). The report concludes that the GC has not rendered any tangible effects in either of the companies. Concerning the other instruments, Hydro has only followed the instrument requirements that fit their initial approach, and refrained from all deviating requirements. Shell has been more malleable, but we have noted few effects on the actual emissions and business portfolio resulting from the instrument adherence. 
Second, we assess how the differing results of the similar CSR-portfolio may be explained. The reluctant attitude of the leaders in Hydro and the strong CSR motivation of Shell’s executives result in significant differences. Hydro executives are able to constrain the effects of the instrument adherence. With Shell we note the opposite pattern: its leaders promoted the instruments to be translated into internal rules, but a general lack of hierarchical structures hinders them from governing the conduct of various sub-organisations. The very diversity of the Shell culture helps to explain why the efforts of its executives have resulted in limited impact. The strength of the Hydro culture makes the corporation resistant to the instruments. Moreover, Hydro is strikingly shielded by virtue of its strong position in Norway. In contrast, Shell is more strongly affected by the global field of petroleum and the global field of CSR. While the former hampers the instruments in rendering effects, the latter contributes to explaining why the two companies decided to adhere to the instruments in the first place.