Questions over BP sustainability review

20 April 2010

20 April 2010 | Nick Martindale

Auditors have questioned the ability of oil giant BP to include supplier working practices in its long-awaited sustainability review.

In the 40-page document, the energy company outlined its intentions to help address the issue of climate change but made no reference to involving external providers to reduce its carbon footprint.

Ernst & Young, which audited the report on behalf of the oil giant, said: “BP has highlighted ‘energy challenges’ but could also have described the issues that stakeholders consider to be emerging sustainability trends.

“These issues could include, for example, water management and reputational risks associated with supplier working practices, and how this may impact on the business.”

Instead, the business focused on its work in developing more efficient fuels and lubricants; promoting the use of natural gas; including a “cost of carbon” in investment appraisals for all new projects; and its investment in low-carbon practices such as biofuels, renewable energy and carbon capture.

BP added it was “seeking biofuel suppliers that were best able to meet a range of general and feedstock-specific sustainability legal requirements” and pledged to include contractual sustainability clauses in jurisdictions where legal standards were being established.

Direct greenhouse gas emissions, which had fallen from 78 million tonnes in 2005 to 61.4 million in 2008, rose during 2009 to 65 million. The company put this down to the start-up of its Tangguh liquefied natural gas project, which increased the use of flaring.

The business has also come under criticism from environmental protestors about its oil sands development project – which uses more carbon dioxide than conventional techniques – in Canada.

In the annual report, BP repeated its pledge made at last week’s annual meeting to minimise pollution by not using open-pit mining.

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