Greenhouse Business Challenge and Carbon Footprint (Chevron Company in Australia)
The Chevron Company in Australia is one of the world’s greatest energy corporations involved in the production of oil and natural gas. Taking into consideration the nature of its operations, Chevron Company is most likely to be faced with carbon footprint challenge. “We focus on protecting the safety and health of people and the environment and conducting our operations reliably and efficiently” (Chevron, 2013). This indicates the management commitment from the company in ensuring liability of carbon and thus corporate response
Corporate Governance is about good decisions being made by the right person (Business.gov.au, 2013). The right decisions range from making operational decisions to long-term decisions on the implications a business has on the environment. It entails decisions that are aimed at reducing carbon footprint. There have been regulations aimed at addressing the issue of the greenhouse gas emissions and their contribution to climate change. The company operates in a manner that their business activities comply with various international, federal, state and local environmental, health and safety laws (Chevron, 2013).
The Chevron Company has included the regulation compliance cost in the normal business operating costs. The company governance is thus concerned with the protection of the environment. “In addition to the costs for environmental protection associated with its ongoing operations and products, the company may incur expenses for corrective actions at various owned and previously owned facilities and at third-party-owned waste disposal sites used by the company” (Chevron, 2013). Its policy on the green house issues requires that every employee takes it a responsibility to safeguard the environment while undertaking their duties. The company reports its green house performance to their shareholders though an annual report. It shows the measures put into action, the costs of environmental protection and the future plans on the issue. The shareholders are also informed on their corporate responsibility in the green house performance as partners to the company.
The Virgin Australia airline company has also practiced green house performance. The company contributes to the carbon footprint due to airplane fuel burn. According to Virgin Australia environmental statement: “We are committed to reducing our emissions and our impact on the environment as much as possible through combined approach of fuel efficiency, sustainable aviation bio fuel development and carbon offsetting” (2013). The airline transport aircrafts are fuel efficient and young with the mean age estimated at 4.9 years. The company also has established a renewal fleet program that ensures that it maintains its fuel efficient status (Virgin Australia, 2013). Virgin Australia established the first government certified airline carbon offsetting plan in the year 2007. The company also targets to adopt renewable aircraft fuels from biomass by the year 2020 reducing its green house effect significantly (Oecd.org, 2013).
The Chevron Company management has faced problems and concerns in the Management in addressing the green house environmental issue. The volatile worldwide demand and supply oil and natural gas as well as geopolitical environment affect the management decisions regarding greenhouse regulation (Mccahery, 2002). The unpredictability of the tanker charter charges impact on the shipping activities reducing the profitability and extending the impact on the green house performance.
The growing concerns over the long term impact of carbon emissions on climate change must be addressed considering effectively (Gore and Melcher, 2006). To continue its green house performance in reducing the carbon footprint, the company has to find a solution to the major challenge on the cooperate governance. The corporate governance decision process for the company comes into test during the low profitability times. In such a time the decisions made look into reducing operation costs and green house performance inclusion suffers a major cut in cost reduction efforts. According to Jungmann (2013), the most effective corporate governance must address the issues of the carbon footprint. The company should thus explore more oil potential areas so as to increase sales and consequently the green house performance will not be affected with increased profitability. The Chevron Company aims at managing itself within the legal framework of the areas operate both Downstream and Upstream.
References
Jungmann , C. (2013) The Effectiveness of Corporate Governance in One-Tier and Two-Tier Board Systems – Evidence from the UK and Germany. [e-book] Muenchen: University of Muenchen. p.470-474.
Business.gov.au (2013) Corporate governance. [online] Available at: http://www.business.gov.au/Howtoguides/Startingabusiness/Startinganewbusiness/HowdoIsetupoperations/Pages/Corporategovernance.aspx [Accessed: 13 May 2013].
Chevron (2013) Company Profile | About Chevron | Chevron. [online] Available at: http://www.chevron.com/about/leadership/ [Accessed: 14 May 2013].
Gore and Melcher (2006) An inconvenient truth: The planetary emergency of global warming and what we can do about it. . New York: Rodale Press.
Mccahery, J. (2002) Corporate governance regimes. Oxford: Oxford University Press.
Oecd.org (2013) Corporate affairs - Organisation for Economic Co-operation and Development. [online] Available at: http://www.oecd.org/daf/ca/corporategovernanceinrussia.htm [Accessed: 14 May 2013].
Virgin Australia (2013) Environment | Virgin Australia. [online] Available at: http://www.virginaustralia.com/au/en/about-us/sustainability/environment/ [Accessed: 14 May 2013].
