Fundamentals of Risk Management

Reputation and the business model 
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with the CSR obligations, organizations should then look at the opportunities that 
are available. For example, it is now commonplace for supermarkets to offer goods 
that have been procured on a ‘fair trade’ basis and gain additional sales from offering 
this range of products.
Corporate social responsibility is an area of concern where it is likely that public 
opinion will be ahead of the thinking within many organizations. CSR issues there-
fore represent a great opportunity for an organization to develop corporate social 
responsibility plans and actions that respond to public opinion. Treating the CSR 
agenda as a dynamic, proactive set of issues will enable the organization to gain 
reputational advantage.
Many organizations have stakeholders that they do not necessarily want. This is 
certainly the case for several energy companies. Exploration for oil, coal and minerals 
is carefully scrutinized by environmental pressure groups. Even if they are ‘unwanted 
stakeholders’, environmental pressure groups are valid stakeholders in these organ-
izations and can bring a considerable influence to bear on their activities. Environ-
mental pressure groups have demands that are firmly within the CSR agenda.
The list of issues in Table 20.1 provides an indication of the stakeholders who are 
likely to have an interest in the CSR agenda. Employees, customers, suppliers and
the general community are the key groups that are stakeholders in the CSR agenda 
of an organization. For CSR issues associated with the environment, it is fair to
say that everybody is a stakeholder in the behaviour of organizations when that
behaviour impacts the environment.
An example of the impact that a pressure group can exert is demonstrated by the 
following report on the website of the environment action group Greenpeace. This 
report relates to the proposed disposal by Shell of the Brent Spar oil storage facility 
in the mid-1990s.
In 1995, Greenpeace activists occupied the Brent Spar oil storage facility in the North Sea. 
Their purpose was to stop plans to scuttle the 14,500-tonne installation. The action was part 
of an ongoing campaign to stop ocean dumping and pitted Greenpeace against the combined 
forces of the UK government and the world’s then-largest oil company.
Spontaneous protests in support of Greenpeace and against Shell broke out across Europe. 
Some Shell stations in Germany reported a 50 per cent loss of sales. Chancellor Kohl raised 
the issue with the UK government at a G7 meeting. But despite the UK government’s refusal to 
back down on plans to allow the Spar to simply be dumped into the ocean, public pressure proved 
too much to bear for Shell and in a dramatic win for Greenpeace and the ocean environment, 
the company reversed its decision and agreed to dismantle and recycle the Spar on land.
The decision led to a ban on the ocean disposal of such rigs by the international body 
which regulates ocean dumping. Before the Brent Spar campaign, a number of oil companies 
had been planning sea-dumping of obsolete installations, such as oil storage buoys (like 
Shell’s Brent Spar) and oil rigs. Greenpeace’s action and the support of people throughout 
Europe ensured that no such structures have been dumped to this day.
shell Brent spar

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