Case Study from Shell Petroleum on Environment Principle
Supporting a precautionary approach to environmental challenges

Name of Company: Shell International Ltd.

Background & situational context 

The example submitted by Shell to the Global Compact in 2002 focuses on the precautionary nature of its approach to biodiversity in the context of new projects. Shell has identified biodiversity as being a key driver in its decision-making process regarding new projects and investments. 

Shell International Ltd. has operations in 145 countries and employs over 115 thousand people worldwide. Similar to other major private oil and gas companies, Shell produces more than 3.5% of global gas and approximately 3% of the world’s oil. They also produce 13% of the world’s solar panels. 

Problem 
As the search for new oil and gas reserves expands into even more sensitive environments, 
Shell has recognised that its activities have the potential to impact biodiversity adversely and believes that, by operating responsibly with respect to biodiversity, it can ensure that the integrity of an area is maintained and also avoid damage to its reputation. 

Actions taken 
Shell’s activities began with a workshop involving key international conservation organisations at which three key areas for the company were identified: 
* Communication of a consistent position on biodiversity for the complete Royal/Dutch Shell 
   group of companies, 
* To “operate responsibly”, and 
* To work with others to make a positive contribution to global biodiversity. 

Shell's actions in these areas are summarised below: 
1.   Shell has published a formal Group-wide biodiversity standard and has appointed a Group Biodiversity Adviser to translate the standard into guidance for Shell operations. 
2.   Shell responded to the call for “operating responsibly” by developing a GIS “Early Warning System” to provide biodiversity information for use in consultations with stakeholders on new business activities in sensitive environments. Data on protected areas – such as World Heritage Sites, UN-listed areas (IUCN Categories I-VI) and Ramsar sites – as well as sensitive environments – such as the WWF Global 200 Eco-regions, and Conservation International's “hot spots” – are included in the system. Potential impacts on biodiversity are also being integrated into Shell’s Environmental and Social Impact Assessments (ESIAs), which are carried out prior to new projects or important modifications. Shell is working with the World Conservation Monitoring Centre (UNEP-WCMC) to make this information available within the public domain. 
3.   Shell has established a number of relationships that are aimed at building trust so as to resolve operational issues as well as to make a positive contribution to conservation. The Camisea Project and the Energy and Biodiversity Initiative (EBI) demonstrate how business and NGOs can work together effectively 
4.   The Shell Foundation contributes to the Energy and Biodiversity Initiative (EBI) along with three other companies (BP, ChevronTexaco, and Statoil) and five conservation NGOs (Conservation International, Fauna and Flora International, IUCN, the Smithsonian Institution and The Nature Conservancy). The EBI is looking to integrate biodiversity into business decision-making by developing a business case for biodiversity, establishing biodiversity conservation practices and metrics, and designing a decision-making framework to guide the site-selection process. 
5.   Shell Prospecting and Development - Peru (SPDP) performed an appraisal and exploration operation in the Camisea region, an extremely sensitive area adjacent to the Manu National Park in Peru. Shell carried out extensive consultation with local and international NGOs and the indigenous Machigenga people, and ran the appraisal campaign with restricted access for visitors – no roads were built and barges, hovercraft and helicopters were used for operations. SPDP worked together with the Smithsonian Institution to conduct biodiversity assessments and the information was used in the business decision-making process for the location of a gas process plant and the routes of pipelines. Following the Camisea Project, the Shell Foundation funded the Smithsonian Institution to carry out a 5 year study on the impacts of oil and gas operations in sensitive environments. 

Results 

Shell has been able to build relationships of trust to better resolve operational issues, improving its stakeholder relations and corporate reputation. It has supported improved maintenance of environmental integrity and avoided possible liabilities associated with negative environmental and societal impacts. 

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UN Global Compact Resource Package