{"id":23447,"date":"2017-11-15T06:49:38","date_gmt":"2017-11-15T11:49:38","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\/"},"modified":"2017-11-15T19:53:04","modified_gmt":"2017-11-16T00:53:04","slug":"disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\/","title":{"rendered":"Disclosing Carbon Disclosure Data is Chevron\u2019s Way Forward in Mitigating Environmental Risk"},"content":{"rendered":"

Numerous companies have attempted to redesign their processes to adapt to climate change. However, earlier in the journey of building momentum, the Carbon Disclosure Project, a UK-based organization, sought to provide the world with information about companies and their relative environmental impact. Essentially, the work in mitigating the risks of climate change for a given company is much harder if adequate information about what the company is doing is not provided. As countries and international governmental organizations such as the United Nations start to make critical decisions about the trajectory of environmental policy and regulation, companies, like the one below, can offer meaningful data to better target emission reduction goals. In fact, literature suggests that environmental management will continue to be hampered until environmental accounting measures with meaningful data are put into place<\/a>[1]<\/a>. Now reporting carbon emission data\u00a0 is a key fixture in the Chevron supply chain of drilling for energy products (upstream) and delivering it to customers (downstream).<\/p>\n

By signing up for this commitment, companies are then expected \u201cnot only to measure and disclose their own greenhouse gas (GHG) emissions as well as those in their broader supply chain, but also asks them questions about their climate change risks, strategies, and actions<\/a>[2]<\/a>.\u201d According to CDP, they now collect data and coordinate information sharing about environmental accounting for approximately 81% of the largest companies in the world. Even more, 69% of Fortune 500 companies are experiencing increased demand from consumers for lower carbon products<\/a>[3]<\/a>.<\/p>\n

Chevron, one of the largest energy companies, has worked intensively and closely with the CDP to better understand its environmental impact. Management has identified that the medium and short-term goals are inextricably linked to one another.<\/p>\n

Short-Term Actions<\/em><\/p>\n

In the shorter term, Chevron has committed to become more aggressive in their reporting in partnership with the CDP. Chevron like many energy companies is comprised of inordinately sized capital projects. With the help and direction of the CDP, Chevron now does the following:<\/p>\n

    \n
  1. Estimate a (capital) project\u2019s incremental emissions profile<\/li>\n
  2. Assess the potential financial impact of GHG regulations<\/li>\n
  3. Examine the emissions reduction options<\/a>[4]<\/a><\/li>\n<\/ol>\n

    This according to the company has enabled transparency internally and externally\u2014allowing them now to pinpoint the source of their carbon disclosures and associated pricing. Management has now determined that the \u201cprimary sources of our GHG emissions are combustion of fuels and, in some locations, flaring and venting of the natural gas (methane) that is extracted along with crude oil<\/a>[5]<\/a>.\u201d Due to their partnership with CDP, Chevron can now state that in 2016, they produced 66 million tons of CO2<\/sup> equivalent[6]<\/a>\u00a0.<\/p>\n

    Medium-Term Actions <\/em><\/p>\n

    Now in consideration of the medium term, Chevron has now begun to engage intendent auditing groups to provide more substantive review of Chevron\u2019s work. They contracted the services of Ernst & Young to more thoroughly review the inventory that Chevron held in GHG emissions. To solidify their work for the longer term, they\u2019ve used this information both from EY and CDP to implement technological and process based innovations to more precisely minimize their production of GHG emissions without harming the financial viability of the company. First, they\u2019ve reformed the work of the inspections team to devise formal programs to inspect facilities for leaks. Second, Chevron now more efficiently tracks \u201cfugitive emissions\u201d by installing cameras embedded into machinery to identify more precisely leaks<\/a>[7]<\/a>.<\/p>\n

    In a fairly robust analysis of what industry players have done with the CDP and subsequent actions they have taken, author Marc Epstein identifies that there are three classifications of subsequent actions:<\/p>\n

      \n
    1. Opportunities directly related to core operations<\/li>\n
    2. Opportunities not directly related to core operations<\/li>\n
    3. Operations that cannot be unambiguously classified<\/li>\n<\/ol>\n

      Chevron references the significant gains it has made in reducing GHG emissions in partnership with CDP and internal operations as a function of existing core operation improvements. Given Chevron\u2019s immense size and scope, Chevron should also<\/em><\/strong> pursue option 2 above. For example, Chevron\u2019s analysis of its ongoing investment in India and Nigeria requires more significant investment in infrastructure<\/a>[8]<\/a>. Subsequently, Chevron should measure and mitigate the environmental risk associated with those infrastructural developments.<\/p>\n

      Chevron\u2019s alignment with sustained involvement with CDP practices is still debatable. For the moment, CPD\u2019s practices have unlocked opportunity for companies like Chevron to realize ways of:<\/p>\n

        \n
      1. Appealing to consumer demand for more sustainable practices<\/li>\n
      2. Saving money by reducing leakage<\/li>\n
      3. Improving processes at facilities that provide all elements of the oil and gas production (upstream, midstream, and downstream)<\/li>\n
      4. Unlocking access to meaningful data to better make decisions regarding climate change<\/a>[9]<\/a>.<\/li>\n<\/ol>\n

        But an outstanding question remains: what if this work conflicts with the fiduciary responsibility of maximizing shareholder value? Even more, if companies do not have an intrinsic motivation to use data for improving its environmental impact, there is no guarantee that companies will reform their practices.<\/p>\n

         <\/p>\n

        (800 words)<\/p>\n

        [1]<\/a> Epstein, Marc, \u201cImproving environmental management with full environmental cost accounting\u201d Environmental Quality Management<\/em>, Volume 6, Issue 1, September 1996, Pages 11-21<\/p>\n

        [2]<\/a> Blanco, C. et al. \u201cAn inside perspective on carbon disclosure\u201d Business Horizons<\/em>, Volume 60, Issue 5, September\u2013October 2017, Pages 635-646<\/p>\n

        [3]<\/a> Veslasquez-Manoff, Moises, \u201cCashing in on Climate Change,\u201d New York Times<\/em> Sunday Review<\/em>, December 6th<\/sup>, 2016<\/p>\n

        [4]<\/a> \u201cGreenhouse Gas Management,\u201d Chevron, https:\/\/www.chevron.com\/corporate-responsibility\/climate-change\/greenhouse-gas-management<\/p>\n

        [5]<\/a> Ibid<\/em><\/p>\n

        [6]<\/a> Ibid<\/em><\/p>\n

        [7]<\/a> \u201cChevron\u2019s GHG Reporting Protocol,\u201d Ernst and Young, January 2014<\/p>\n

        [8]<\/a> \u201cPeak Oil? Majors Aren\u2019t Buying into the Threat of Renewables,\u201d November 8, 2017, The New York Times<\/em><\/p>\n

        [9]<\/a> Blanco, C et al.<\/p>\n","protected":false},"excerpt":{"rendered":"

        Chevron and countless other companies are providing environmental interest groups, international government organizations, and civil society with data for improved decision making for reducing the risk companies pose to the environment. <\/p>\n","protected":false},"author":9811,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-23447","hck-submission","type-hck-submission","status-publish","hentry","hck-taxonomy-organization-chevron","hck-taxonomy-industry-energy","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\nDisclosing Carbon Disclosure Data is Chevron\u2019s Way Forward in Mitigating Environmental Risk - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Disclosing Carbon Disclosure Data is Chevron\u2019s Way Forward in Mitigating Environmental Risk - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Chevron and countless other companies are providing environmental interest groups, international government organizations, and civil society with data for improved decision making for reducing the risk companies pose to the environment.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\/\" \/>\n<meta property=\"og:site_name\" content=\"Technology and Operations Management\" \/>\n<meta property=\"article:modified_time\" content=\"2017-11-16T00:53:04+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\\\/\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\\\/\",\"name\":\"Disclosing Carbon Disclosure Data is Chevron\u2019s Way Forward in Mitigating Environmental Risk - Technology and Operations Management\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\"},\"datePublished\":\"2017-11-15T11:49:38+00:00\",\"dateModified\":\"2017-11-16T00:53:04+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Submissions\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Disclosing Carbon Disclosure Data is Chevron\u2019s Way Forward in Mitigating Environmental Risk\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/\",\"name\":\"Technology and Operations Management\",\"description\":\"MBA Student Perspectives\",\"potentialAction\":[{\"@type\":\"性视界Action\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Disclosing Carbon Disclosure Data is Chevron\u2019s Way Forward in Mitigating Environmental Risk - Technology and Operations Management","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\/","og_locale":"en_US","og_type":"article","og_title":"Disclosing Carbon Disclosure Data is Chevron\u2019s Way Forward in Mitigating Environmental Risk - Technology and Operations Management","og_description":"Chevron and countless other companies are providing environmental interest groups, international government organizations, and civil society with data for improved decision making for reducing the risk companies pose to the environment.","og_url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\/","og_site_name":"Technology and Operations Management","article_modified_time":"2017-11-16T00:53:04+00:00","twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\/","url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\/","name":"Disclosing Carbon Disclosure Data is Chevron\u2019s Way Forward in Mitigating Environmental Risk - Technology and Operations Management","isPartOf":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website"},"datePublished":"2017-11-15T11:49:38+00:00","dateModified":"2017-11-16T00:53:04+00:00","breadcrumb":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/d3.harvard.edu\/platform-rctom\/submission\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/disclosing-carbon-disclosure-data-is-chevrons-way-forward-in-mitigating-environmental-risk\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/d3.harvard.edu\/platform-rctom\/"},{"@type":"ListItem","position":2,"name":"Submissions","item":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/"},{"@type":"ListItem","position":3,"name":"Disclosing Carbon Disclosure Data is Chevron\u2019s Way Forward in Mitigating Environmental Risk"}]},{"@type":"WebSite","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website","url":"https:\/\/d3.harvard.edu\/platform-rctom\/","name":"Technology and Operations Management","description":"MBA Student Perspectives","potentialAction":[{"@type":"性视界Action","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/d3.harvard.edu\/platform-rctom\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/23447","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission"}],"about":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/types\/hck-submission"}],"author":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/users\/9811"}],"replies":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/comments?post=23447"}],"version-history":[{"count":0,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/23447\/revisions"}],"wp:attachment":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/media?parent=23447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/categories?post=23447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}