BP is an international oil and gas company operating in over 80 countries and employing 85,700 people. BP Australia has been operating since 1919 and currently employs 7,700 people (plus contractors) and operates in all states and territories. BP Australia is engaged in both exploration and production of oil, natural gas and liquefied natural gas as well as the refining, transportation and marketing of petroleum and lubricant products. BP Australia also runs a network of 1,400 service stations; BP Marine, supplying large container and tanker shipping companies; Air BP, supplying jet fuel; and BP Shipping product carriers. The company exited its solar photovoltaic operation in 2011-2012.
BP Australia’s fifth sustainability report is titled Building a stronger, safer BP which is the same theme as the BP global Sustainability Review 2012. This title reflects a number of the highly material issues, in particular ‘personal and process safety’ and ‘business changes as a result of the Gulf of Mexico accident’. BP Australia is moving toward calendar year reporting to better align with BP global and, as such, the report covers 18 months of data in this cycle (1 July 2011 – 31 Dec 2012).
BP Australia employs a robust process for determining material issues and provides a detailed explanation of this process in the report. The materiality process adopted by BP Australia is also included in the scope of the external assurance. However, in my opinion, there should be more detail on the full suite of issues identified and what sorts of issues were ranked high, medium and low in the materiality matrix. A summary of the key areas of concern for external stakeholders is included in the report under the headings ‘Safety’, ‘Energy future’, ‘Social impact’ and ‘How we are changing’ along with a brief statement on BP Australia’s response and where full details are included in the report and online. While this is a useful reference, it could be much more comprehensive and cover the range of material issues.
The report focuses on ten high priority issues but this doesn’t appear to be the full list of highly material issues determined by the materiality process, nor is there a link to further discussion around the additional issues. However, the report does provide a comprehensive overview of most of the issues identified, with the business improvements in safety and risk management themes understandably dominating the report narrative. The Gulf of Mexico incident is covered early, thoroughly and with a high degree of transparency.
Two areas where coverage is less rigorous are community investment (part of the ‘community support and investment’ issue) and indigenous support. Given these are listed as highly material issues, greater coverage could be expected. The issues are, by nature, strongly regional with policies and disclosures likely to be the subject of BP Australia’s reflections than BP global. Consideration of the needs of the local community appears to be part of BP Australia’s standard project management approach with screenings undertaken pre-project to assess the needs of the indigenous people and broader community needs. It can be assumed that tailored community investment and indigenous support programs are developed as part of these projects. More detail on this approach and how community investment and indigenous support reflect local community needs would create a richer picture within the report and provide more Australian specific context.
BP Australia’s report is well structured and easy to navigate, making use of hyperlinks, diagrams, graphs and images to good effect. A high level of detail is provided in a number of the sections (in particular ‘Update on the Gulf of Mexico’ and ‘The energy future’) including background and context setting information. The report is 49 pages, an appropriate length, though some sections could benefit from a slight edit. An ‘In this section’ overview included at the beginning of each section and the heading structure, enables easy scanning for areas of interest.
Overall there is a good balance between qualitative and quantitative information and data is well presented and accessible. The sustainability mapping tool, for example, is a well-constructed data tool. Links to additional data online are provided throughout the report however in some areas where the reader expects links to Australian specific data, the links navigate to BP global information. More clarity around local and group level data would be useful.
The language is clear with hyperlinks to online content - the website includes further detail on environmental, social and safety performance with additional data, commentary and case studies.
There are references to BP’s ‘strategy’ and a section entitled ‘Our strategy and sustainability’, however it remains unclear as to whether there is a dedicated sustainability strategy guiding the organisation’s goal, ‘… to create value for shareholders and supplies of energy for the world in a safe and responsible way.’ A selection of key performance indicators are reported in graphical format with a reference to the ‘BP in figures’ data table for the full suite of safety, environment, people and performance KPIs. High level goals are also included in some sections of the report however the relationship between the strategy, goals and KPIs is not well articulated.
Overall the report provides a good level of detail and quantitative data to back up statements and assertions. Trend data is provided at the end of the report in the ‘BP in figures’ table which runs from 2008. The upfront statement in the report about ‘working to enhance safety and risk management and earn back trust’ in reference to the Gulf of Mexico incident sets the tone for the report.
There is no indication that the report has been prepared against a globally accepted reporting framework such as the Global Reporting Initiative (GRI). The BP global report references GRI to A+, IPIECA and the UNGC. Adherence to a framework may help to increase disclosure, coverage, transparency and comparability with other organisations. However, given that BP Australia’s report represents 18 months worth of data this time, it is likely that even more alignment with BP’s global reporting efforts and use of standards is planned.
The report received a limited level of assurance over its sustainability disclosures in accordance with ASAE 3000.
- Provide a full list of high, medium and low materiality issues (either in the report or online) and more detail on where each of the highly material issues is covered within the report.
- Reference the ‘strategy’ in more detail and how it flows into the goals and KPIs that are included in the report.
- Report against a globally accepted reporting framework such as the Global Reporting Initiative (GRI) to increase disclosure, coverage and transparency and comparability with other organisations
Alison Raymond is a Senior Associate at Net Balance, a sustainability advisory services firm with offices in Melbourne, Sydney, Brisbane, Hobart and London. www.netbalance.com