Chevron tells an engaging story by putting case studies at the heart of its report, but the company remains opaque in important areas

“We’re not in the business of making cookies.” This is a common refrain in the oil industry, an apparent reference to the inherently dangerous business of extracting, transporting and refining crude oil into energy sources that power the world.

It is indeed a dangerous business (think BP explosion), and the oil industry uses a rigorous and methodical approach to managing its safety and environmental risks. It is one that is focused on the minutest of details, geared towards ultimately achieving “zero incidents”.

As important as they are, however, management and process safety systems make for dry reading. Companies want to report on their accomplishments, but how do you bring something like the “Operational Excellence Management System” to life for the reader?

It seems that Chevron, the fourth largest privately owned oil company, may have found a way.

In most reports, case studies – snapshots of specific company programmes – are woven intermittently through the main narrative to illustrate the side of the company that exists beyond its corporate speak. Chevron upends this format by using case studies as the main narrative vehicle to showcase its accomplishments in a given area (process safety, environment, economic development, and others.) Each case study is separated by a brief overview of the company’s approach to the specific issue, and all statistics and charts are consigned to the end of the report.

The case study approach allows Chevron to use stories to bring the company’s operations and accomplishments to life. For example, in Chevron’s unhurried case study on the Gulf of Mexico, written to demonstrate its approach to process safety (preventing fires, releases and explosions), the company also discusses how it has helped turn decommissioned oil rigs into artificial reefs that provide a habitat for marine organisms.

Gulf focus

By focusing on the Gulf of Mexico (a deliberate choice given the BP incident), Chevron is able to show its safety systems in application, instead of bogging the reader down in an onerous explanation of process safety across its global operations. Similarly, the company uses its operations in Bangladesh to talk about its approach to personal injuries, its joint venture in Kazakhstan to discuss environmental stewardship, its Angolan operations to showcase conservation efforts, and its work in Australia to talk about economic development.

In addition to drilling down on the application of Chevron’s systems, the case studies also discuss each operation’s unique challenges. For example, Bangladesh – a country not especially known for workplace safety – provides a wonderful conduit for discussing how Chevron’s safety focus has helped change safety standards in the community.

Brief section overviews lay the context for the issue discussed within each case study. In addition, Chevron’s website addresses governance and provides more detail on the company’s approach to specific issues, allowing the case studies to focus exclusively on the projects and their challenges.

This approach distinguishes Chevron from its peers – and most of the reporting world. While there are some wrinkles that need ironing out, overall it serves the company well.

Beyond the case study

It isn’t all good news. Chevron does not fully take advantage of its unorthodox format; the stiff and formal copy relies much too often on industry jargon to explain processes. The report also includes unnecessarily detail – for instance, a constant reference to distances (Project A is X miles (Ykm) from B) that undermines the main message.

Chevron’s reliance on location-specific case studies also prevents it from discussing the company’s global performance in any depth. Peppered with piecemeal examples, the brief section summaries fail to provide a comprehensive overview of Chevron’s operations. Because policy statements (eg climate change) are housed on Chevron’s website, there is little context to understanding the company’s environmental operations. The brief section on GHG emissions is inadequate, with no context provided on the metrics or on Chevron’s climate-change programme.

Chevron also fails to discuss how or why it chose the material issues covered by the report, and how it deals with these issues on a global scale. Other than a GHG emissions target, hidden in the text, and the much stated “zero-incidents” goal, there are no goals or targets, and no explanation for why Chevron chooses not to have any. Finally, there is no mention of Chevron’s most public issues – the Brazilian oil spills (involving a reported $17.5bn settlement) or the Ecuadorian litigation – opening the company to charges of a lack of transparency.

Chevron’s case-study approach goes a long way towards giving readers an insight into its operations, converting dry copy on systems to actual stories of how these systems are applied to improve performance. The report would benefit from a more robust discussion of Chevron’s global programmes and performance as well as its targets and goals.

Snapshot

Follows GRI?                 GRI index included.

Assured?                        External assurance: Lloyd’s Register Quality Assurance.

Materiality analysis?   No

Goals?                             On some issues.

Targets?                         Only on GHG emissions.

Stakeholder input?      Not obvious.

Seeks feedback?         Yes

Key strengths?              Using a case study approach.

Chief weakness?         Stiff copy and lack of global context.

Pleasant surprise?      The use of case studies as the main narrative.

Aarti Ramachandran is a senior consultant at the Context Group.

Chevron  CR Reporting  sustainability reporting