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Corporate Social Responsibility in Oil and Gas
Karen Hennes (Steed School of Accounting, Price College of Business, University of Oklahoma) and Curtis Farnsel (School of Business Administration, University of Dayton) (Oil, Gas & Energy Quarterly, 2019)
The authors examine the values of indices of Corporate Social Responsibility (CSR) being emphasized throughout United States industry, specifically comparing the behavior of oil and gas companies and non-energy companies. The data examined are gathered from the commercial source that has become the focal point of both academic research as well as industry participants, the MSCI KLD Analytics database.
The authors find that U.S. oil and gas firms have lower average CSR scores than other firms in general based upon a comparison of averages. Some CSR concerns are inherent to the nature of the oil and gas industry, but the authors conclude that others can be improved upon.
The authors investigate how oil and gas firms may counter high CSR concerns with a focus on offsetting CSR strengths. They find that oil and gas firms actually have higher CSR strengths than firms in other industries in four of the six dimensions analyzed. Further, the authors find that oil and gas firms elect to use strengths in some areas to compensate for concerns in others.
Corporate Social Responsibility and the associated Environmental, Social and Governance ‘score card’ of companies have received increasing attention in recent years. This study brings to the fore how energy companies are tackling this difficult management problem in a way that both acknowledges the issue, but also seeks balance.
