We want to play our part in addressing climate change... we joined with other oil and gas companies - through the Oil and Gas Climate Initiative and other activities - to support effective action on this critical issue.Bob Dudley, group chief executive, BP
Energy is a long-term business. Our projects often operate over many decades, delivering energy for growth, development and everyday life, as well as value for shareholders. A business that aims to be sustainable has to order its priorities accordingly. It has to make safety its top priority. It has to earn and maintain the support of society. And it has to take action to help safeguard the environment for future generations. So issues of sustainability are vital for the future of our business. As this report shows, across BP, all of our key measures of safety performance - process safety events, leaks, spills and other releases, and recordable injuries - were better in 2015 than in 2014, and indeed five years ago. However, while we continued to make progress, we sadly experienced one workforce fatality when a contractor died during renovations at a recently acquired retail site in Turkey. Our thoughts are with his family and friends and we are doing all we can to learn and apply the lessons from this tragic event. Our aspiration is to have no accidents, no harm to people and no damage to the environment - and that means we always have more to do.
To earn the support of society, we need to be a responsible operator that is prepared to recognize and help to resolve many different concerns - among them environmental issues, economic impacts and relationships with communities, suppliers, customers, partners and governments. With this in mind, the falling oil price has been a major challenge for the industry, with sharply reduced cash flow and earnings affecting the choices we can make. We have sought to address difficult choices in a way that is sustainable, showing resilience in the short term while continuing to invest in a disciplined way for long-term growth. And whatever adjustments we make, safety and risk management must not be compromised. Given the challenges, we have had to scale back our investments, lower our costs and reduce staff numbers. I recognize the personal cost this brings for those affected and their families. In these circumstances we seek to act fairly, treating people with respect in line with our well-established and supportive procedures. We are working with governments and suppliers to reduce costs and increase efficiency along the value chain - and to do so in a way that is also beneficial for others in our supply chain. We recognize that some of the countries where we operate are under economic strain - as they rely on oil and gas as their primary source of revenue. Our aim is to maintain as much activity as possible, where that can be done competitively. BP’s economic impact goes far beyond the products we sell and the people we employ. According to recent studies, BP contributes to around 300,000 jobs in its supply chain in the US and UK alone - around 10 times the number directly employed. In 2015 we paid $3.5 billion in taxes worldwide that help support public spending. We spent $67 million on community programmes, ranging from humanitarian relief efforts to investment in encouraging more young people to take up careers in science, technology, engineering and mathematics. Responsible operating also extends to our stance on human rights, demonstrated by our commitment to the UN Guiding Principles and by our work to introduce human rights clauses in our contracts with suppliers. Shortly after marking the fifth anniversary of the tragic accident on the Deepwater Horizon in the Gulf of Mexico, we reached agreements in principle to settle all federal and state claims arising from the incident. This includes $7.1 billion to address claims for natural resource damages, as part of our commitment to restore the economy and environment of the region. While this provides some closure and certainty in legal terms, we will always regret the accident and remember those who died.
The global energy challenge
The nature of our business means we can play a major role in the global issues of economic development and the environment. The energy we supply can help to improve living standards, power medical facilities and provide irrigation and sanitation. Our challenge is to fulfil this role while also building a business that can contribute to a sustainable environment in which greenhouse gas emissions are reduced. We want to play our part in addressing climate change, recognising that oil and gas are still projected to make up almost half of the world’s energy in 2040 under the International Energy Agency’s ‘450 scenario’. In 2015 we joined with other oil and gas companies - through the Oil and Gas Climate Initiative and other activities - to support effective action on this critical issue and help to enable oil and gas to play a constructive role in the transition to a lower-carbon future. Our board unanimously supported a shareholder resolution in 2015 that requested we report on how BP is preparing for a lower-carbon future. As a result, we have expanded our coverage on these activities in the energy challenge and climate change section in this report. In short, we are calling for widespread carbon pricing that would incentivize energy efficiency and all forms of lower-carbon fuel and power. We are increasing the proportion of natural gas in our portfolio - gas being a cleaner alternative to coal - everywhere, from the US and Europe to China and India. We are pursuing energy efficiency in our operations as well as providing advanced fuels and lubricants for customers. We are running renewable energy businesses in biofuels and wind and we fund research into climate change solutions at leading universities.
We operate in many countries with a range of political systems, regulatory frameworks and business cultures. One of our responsibilities as a global business is to act consistently with regard to values and ethical conduct, so people know exactly what they can expect of BP, regardless of where they are in the world. That’s why we put such emphasis on employee adherence to our code of conduct as well as our core values of safety, respect, excellence, courage and one team. There are many challenges in our industry, but for more than 100 years, through our values, business capabilities and relationships, BP has adapted and navigated through changing times. We will continue to do so, building a business that is sustainable in every sense. Thank you for reading this report.