Sustainable is among the largest diversified chemical companies

Sustainable
Development: SABIC

The natural resources of
the planet Earth are finite and mostly non-renewable which means that they
cannot renew itself fast enough to ensure their sustainable extraction. The
countries of the world have adopted a plan for sustainable development the
purpose of which is to eradicate poverty, save the planet from degradation, and
achieve peace and prosperity through partnership and mutual assistance among
all nations (UN General Assembly, 2015, pp. 2/34-2/35). There were many
attempts to define sustainable development, and there is no unified one.
However, the primary minimum condition for the sustainable development is “the
requirement that the natural capital stock should not decrease over time” (Pearce,
Barbier, and Markandya, 2000, p. 1). Thus, all
people, organizations, and nations must develop in such way that next
generations will have the required resources in sufficient quantity. SABIC
(Saudi Basic Industries Corporation) is a manufacturing company specializing in chemicals, polymers,
agri-nutrients, metals, and specialties,
and it is committed to the sustainable way of doing business (“Products”,
n.d.). SABIC is among the largest diversified chemical companies in the world
operating in 50 countries and employing more than 35,000 people (“Annual Report
2016,” 2017, p. 3). The sustainability strategy of the company is concentrated across the five most material
sustainability issues: resource and energy efficiency, innovation and
sustainability solutions, EHSS and product safety, human capital development,
and the supply chain (“Sustainability Report 2016,” 2017, p. 01).

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Sustainable development
is at the core of SABIC’s corporate values, and
the company moves steadily towards the achievement of the set goals including cleaner
and more efficient manufacturing. The newest global Energy Policy at SABIC is
complementing the company’s management system and encouraging innovation,
education, and the increased exploration of renewables (“Sustainability Report
2016,” 2017, p. 05). The set of efforts and activities aimed at establishing a
steady movement towards sustainable development includes several projects. These
projects include the gradual reduction in the use of coal in plants belonging
to the company. Hundreds of efficiency projects,
construction of the CO2 utilization plants, reduction of flaring,
the use of olefin-cracker coke in SABIC’s steel operations as a carbon source
are aimed toward the common goal – to ensure that the world’s resources are
used as wisely as possible (“Sustainability Report 2016,” 2017, p. 05). However, the vision of sustainable development
at SABIC includes more than that and concerns
the use of all resources, natural, human as wisely as possible to create a
better future for everyone. Thus, the company is aware of the challenges of global markets which inform its strategy and continues to declare sustainable development
as a core value at SABIC.

SABIC issues annual
sustainability report which covers extensively all of the company’s efforts
aimed at the increased efficiency, pollution
reduction, utilization of harmful
materials, and more. However, there are different thoughts about such corporate
reporting. Today, sustainable development is an increasingly
popular topic in the media coverage and has gained a substantial political and public authority. However, corporate actors
often arguing in favor of sustainable
development are acting in a completely different manner. Thus, one of the most
wildly used sustainability reporting practice is
based on the triple bottom line (TBL) framework which is among the most
problematic concepts in the sustainability context (Milne, Ball, and Gray,
2005). The TBL framework allows corporate entities to publish almost any data
they decide is relevant to stakeholders. Thus, at a glance, such companies may seem committed to a goal of sustainable
development and instead “the natural environment and social equity might be
sacrificed in their profit-making and business growth process” (Barkemeyer,
Holt, Preuss & Tsang, 2011, p. 6).

According to Holden,
Linnerud, and Banister (2016) sustainable development goals set by the United
Nations are vague, weak and meaningless, and moreover, they do not distinguish
between the primary and secondary ones. Moreover, sustainable development
should be based on the three pillars such
as social equity, human needs satisfaction, and respect for environmental
limits. SABIC is a responsible company, and as a UN Global Compact (UNGC) member,
it implemented the principles of the organization.
These ten principles of sustainable development include the fundamental
responsibilities of the company in the areas of labor,
human rights, anti-corruption and environment (“Sustainability Report 2016,”
2017, p. 15). To ensure human rights are respected in any part of SABIC’s global
supply chain, the company puts every supplier through a risk model to assess the human-rights situation in the supplier’s
country of operation (“Sustainability Report 2016,” 2017, p. 15). Moreover,
those suppliers identified as high- or medium-risk during this model are put under
the audit to ensure that they do not participate
in human rights abuses, do not use forced
labor and child labor. Such audit also assesses the general working and living
conditions of the workers at the sites of the risky suppliers.

To control and ensure that the company operates
within the principles of sustainable development,
SABIC utilizes unique sustainability governance structure. Sustainability Council
is leading the efforts toward better
sustainability of operations of SABIC and reports to the Board of Directors on sustainability progress (“Sustainability
Report 2016,” 2017, p. 16). The council develops sustainability goals which
have to be reached until a certain
period. Thus, in 2016 the company reduced greenhouse-gas emission intensity, reduced
the loss of materials, increased employee training programs quantity, and significantly
reduced the release of the hazardous substances (“Sustainability Report 2016,”
2017, p. 16). SABIC continually aims to
improve the efficiency of their operations so that the company could become
more resource and energy efficient and produce less waste. Innovations occupy
an essential role in this process. The
development of the new process technologies or
improvement of the existing ones provides new opportunities for sustainable
development at SABIC.

SABIC analysis shows that
the company is committed towards the goals of sustainable development and makes
significant progress in accordance with
their sustainability strategy. However, according to Ihlen and Roper (2011) “few
corporations engage with the problems and dilemmas that a sustainability
strategy would entail” (“Conclusions”, para. 5). Moreover, the authors of the “Corporate
Reports on Sustainability and Sustainable Development: ‘We Have Arrived'” argue
that organizations in specific industries cannot meet the demands
that they should be ecologically sustainable and that the environment has to be
privileged (Ihlen & Roper, 2011, para. 5). Thus, such industries, and oil industry
in particular, still emphasize economic
responsibility before environmental and social responsibilities. SABIC is no exception,
and therefore, there is still room for improvement. Thus, the efforts aimed
toward reaching a goal of sustainable development should be intensified. Moreover, SABIC’s extensive use
of natural resources is still the number one issue
and ensuring the extraction of the natural stock which allows their full natural
reproduction should be the number one goal of the company.

 

 

 

 

 

 

 

 

 

 

 

References

Barkemeyer, R., Holt, D., Preuss, L., & Tsang,
S. (2011). What happened to the ‘development’ in sustainable development?
Business guidelines two decades after Brundtland. Sustainable Development,
22(1), 15-32. http://dx.doi.org/10.1002/sd.521

Milne MJ, Ball A, Gray R. 2005. From soothing
palliatives and towards ecological literacy: A critique of the Triple Bottom
Line. Working Paper. Department of Accountancy and Business Law, University
of Otago. (Unpublished)

Pearce, D., Barbier, E., & Markandya, A.
(2000). Sustainable development: Economics
and environment in the third world.
Washington, DC: EarthScan.

Products. Sabic.com. Retrieved 30 January 2018, from
https://www.sabic.com/en/products

SABIC. (2017). Annual report 2016. Sabic.com.
Retrieved 30 January 2018, from https://www.sabic.com/assets/en/Images/SABIC_Annual-Report_2016_English_tcm1010-6151.pdf

SABIC. (2017). Sustainability report 2016.
Sabic.com. Retrieved 30 January 2018, from https://www.sabic.com/assets/en/Images/SABIC_Sustainability%20Report_2016_English_tcm1010-5614.pdf

UN General Assembly. (2015) Transforming our world: the 2030 Agenda for sustainable
development (A/RES/70/1). New
York.