Can Companies in the Oil Industry Achieve a Competitive Advantage Through Making Contributions Towards Climate Change?

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Are the major oil companies putting their best foot forward on global climate change & the environment?

Climate change is a serious global concern of both the public and the governments. With the increase in greenhouse gases (GHGs), mainly carbon dioxide (CO2), and methane in the earth's atmosphere. There is a widespread view that this increase is leading to climate change, with adverse effects on the environment.

According to the IPCC official report website (2007):

“Warming of the climate system was “unequivocal” as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice and rising global average sea levels.” (2007)

Climate change is more serious now more than ever as the past six years has been our warmest years on record. Al Gore’s (2006) documentary ‘‘An Inconvenient Truth,’ concluded that: “Humanity is sitting on a ticking time bomb. If the vast majority of the world's scientists are right, we have just ten years to avert a major catastrophe that could send our entire planet into a tail-spin of epic destruction involving extreme weather, floods, droughts, epidemics and killer heat waves beyond anything we have ever experienced.”

For information on climate change and government responses please refer to appendix 1 for a full introduction from multiple references which was especially prepared for the purpose of this report.

Below is an image that Gray (1993) portrays in his book, as to why business accountants need to invest and address environmental issues. As businesses sole purpose of activity is to survive in their current market, Gray introduces the theory that there is a direct link between being social and business competitive.

Accounting for the Environment-Rob Gray with Jan Bebbington and Diane Walers (1993) pg.5

The image evaluates external factors...
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