Global Reporting Initiative

Get Complete Project Material File(s) Now! »

Methodology

Research strategy and approach

Bryman & Bell (2011) explain research strategy as the way that data is collected and analyzed and he explains the two major strategies to choose from, qualitative and quantitative. The terms qualitative and quantitative are a way to differentiate data, both in collection and in analysis, where the biggest difference between the two is whether the data is numerical or non-numerical. Quantitative data is mostly used if the data the researcher is collecting or analyzing generates or uses numerical data and this data often have very little meaning in its raw form. For this data to be useful it needs to be quantified which can be done with analysis techniques as charts or tables. Qualitative data, on the other hand, can be said to be when the data generates or uses non-numerical data which can been seen as understandable at the first glance but in order to be fully understood it, it has to be analyzed (Saunders, Lewis, & Thornhill, 2009).
This report will use qualitative data since the majority off the data is text based and also because it is better applicable when doing a deeper study, as the purpose of this report requires. When using this kind of data one can use both an inductive and a deductive approach where the biggest difference is whether a clear theoretical position is developed before the collection of data, deductive approach, or if the aim is to develop a theory after the data is collected, inductive approach (Saunders et al., 2009). This study has a deductive approach as it is built on the discussion of the framework that discusses relevant literature as well as theories within the subject and the guidelines of sustainability reporting.
Numerical data will also be used in this report, but as this data already have been quantified and put together in way that is easy to understand, there where no need to implement any quantitative methods in the research. This because the companies use these charts and tables as a mean to give a better understanding to what is being stated in the text sections.
The analysis of the data in this report is considered secondary data analysis, which is “the analysis of data by researchers who will probably not have been involved in the collection of those data, for purposes that in all likelihood where not envisaged by those responsible for the data collection” (Bryman, 2012, p. 312). Since the timeline of this thesis is quite narrow, performing secondary data analysis saves both time and money (Bryman, 2012).
When analyzing the data a disclosure checklist was created to get an overview of the companies performance based on the indicators. An empty checklist, Table 1, can be seen below and it is based on the chosen aspects, with underlying indicators, from the GRI framework. The checklist shows what indicators the companies used each year where the boxes after the indicators will have a “Yes”, “No” or “Partially”, depending on how or if that specific indicator has been used. The checklist also covers if there has been an increase or a decrease of these indicators from the previous year. A few of the indicators have been explained by text in the sustainability report and as these indicators could not be measured with an increase or decrease these boxes have been marked with “In Text”.
Together with the checklist the content from the sustainability reports was thoroughly analyzed. However, as the reports alone did not give sufficient information to achieve the purpose of the thesis a decision was made to include information from published independent sources such as newspapers and articles. To get an as complete picture of the companies environmental performance as possible the information from the different sources was compared in the hopes of getting an unbiased view of the companies. To give aid in the analysis weather these companies where involved with greenwashing or not Delmas & Burbano’s (2011) definitions and terms of when greenwashing occurs was used.

Studied Companies

To manage the short timeframe of the study, a non-probability sampling was conducted where the starting point of our sample selection was the usage of the GRI-framework. The convenience and necessity due to language limitations pointed the report towards sustainability reports in English only. This type of non-probability sampling is called convenience sampling and while considered the most suitable for this particular study, it limits the opportunity of making general statements about the industry as a whole while reasonable assumptions can, however, still be made (Bryman, 2012).
The companies chosen for this study are some of the largest mining companies in the world. Since a lot of reading of sustainability reports is required in order to evaluate the companies’ claims, the list has been limited to four companies. Another criteria is that the companies chosen are all conducting their reporting based on the GRI G3 framework in order to make an accurate comparability and a fair interpretation possible. The four companies in the study were all chosen after market value in order to investigate the most relevant market players in the industry.
The four companies selected are organized based on market value from highest to lowest as follows: BHP Billiton, Rio Tinto, Glencore and Vale. These are all major corporations with high incentive to have a proper sustainability approach, which gave the possibility to exclusively examine properly prepared reports. For this reason, it was deliberately sought after to only examine companies considered as large and relevant as the chosen ones.
Initially, the study was aimed at Swedish mining companies. However, after careful consideration it was decided that the source of relevant companies for this particular study was to slim. The same conclusion was reached after expanding to all Scandinavian countries. Ultimately, after researching the matter, it was found that in order to accomplish this paper with the best possible outcome the focus needed to be changed to a global perspective.

Data collection

The data has been collected from companies using sustainability reports based on the GRI framework and these reports have been gathered from the GRI database. Doing so enables a certainty that the reports contain the GRI indicators and provides an assurance to find the data searched for. In the reports, the Chairman´s letter and the CEO statements of the different years have been examined in order to see what their focus has been and if their vision for the future has been followed up. Furthermore, the sustainability reports have been studied, with the focus on the information under the environmental aspects, in order to locate information that could benefit the research. To achieve an understanding whether the companies have improved, a comparison between the statements and the indicators chosen have been made with the same statements and indicators from former years. Additionally to this, different media, newspapers and databases containing news articles have been examined. This was done in order to find published information regarding the companies environmental related work as the information disclosed by the companies was found, in some cases, to be insufficient or nonexistent.
Since the companies in this study have operations all around the world, direct contact with company-representatives was deemed difficult. However, because of the importance of sustainability reporting for large companies and the fact that the purpose has a stakeholder-oriented scope, it was considered reliable to trust the information provided by the sustainability reports.

Credibility check

In order to reduce the risk of ending up with false answers from analyzing false data, ensuring the credibility of the data collected is of grave importance. This can be done by inspecting the rationality and the validity (Saunders, Lewis, & Thornhill, 2009). Testing the rationality can, according to Saunders et al. (2009), be performed by asking the following three questions:
1. Will the measures yield the same results on other occasions?
2. Will similar observations be reached by other observers?
3. Is there transparency in how sense was made from the raw data?
Since the raw data exclusively consists of publicly available information in the form of released reports and statements, there is little to none room for what Saunders et al. (2009) calls participant errors where, for example, interviewees may answer differently depending on mood. Because of the fact that we merely examine these kinds of raw data, the three questions above can be answered positively without hesitation.
Additionally there is validity, which concerns if the findings are in fact what they seem to be and that conclusions are drawn with integrity (Saunders et al., 2009 & Bryman, 2012). It is important to be certain about whether or not there is clear causality between the data, the purpose we use it for and the conclusions we reach when analyzing it.

Findings/Empirical findings

BHP Billiton

BHP Billiton is the world’s largest mining-company based on market value in 2015 (Statista, 2015). According to the their website, their purpose is to create long-term shareholder value through the discovery, acquisition, development and marketing of natural resources.

Information in Sustainability reports

Information in CEO-statement

Throughout the different sustainability reports in the 3 years of examining, the CEO-statements constantly focus a lot of attention towards health and safety of their workers, calling it paramount. They have a continuing goal of zero fatalities in their operations every year, which they however did not accomplish in 2012 with 3 fatalities, nor 2013 with another 3. 2014 was a fatality-free year for BHP Billiton. The CEO also reports that in 2012 they did not reach two of their health metrics. There was no reporting of health metrics in 2013 while 2014 was reported as a year with record-low amounts of injuries. When fatalities and large amounts of injuries have been reported in the CEO-statement there is regularly mentioning’s that they learned a lot from their mistakes and that these accidents have occurred despite improvements in injury trends.
When it comes to the environmental issues of BHP Billiton’s operations, the CEO-statements repeatedly explain how they continuously strive to reduce and eliminate environmentally harmful events and minimize the environmental footprint of their operations. The CEO statements mention various environmental achievements where in 2012 states that BHP Billiton failed to achieve their goals for land rehabilitation to beat the baseline of 2006; in 2013 their greenhouse gas emissions were lower than the 2006 baseline, keeping them on route for achieving the goal of staying below the baseline until 2017; in 2014 the CEO again stated that the greenhouse gas emissions stayed below the base line of 2006.
Overall there seems to be a continuously great majority of focus on health and safety towards their own opposed to environmental safety in the CEO-statements.

Information under the aspects sections

Air
BHP Billiton discusses that their operations and products are exposed to potential financial risks from regulations controlling greenhouse gas emissions and that they probably will see changes in the cost-arrangements at the operational sites with significant their greenhouse gas emission. According to BHP Billiton, all of their operations must assess and implement projects that reduce greenhouse gas emissions and they claim to have set a goal to maintain their total greenhouse gas emissions below FY2006 level, which they during the investigated time period have accomplished. They continuously discuss different ways of how they are in line with accomplishing their goals while keeping up the same or increased production by using new innovative production procedures. An example of this is their petroleum facility in Pakistan, which has optimized compression equipment to achieve lower discharge pressures, resulting in lower fuel consumption and thus reduced amounts of emissions in the air.
Waste
BHP Billiton states that a number of controls are used to handle, reduce and recycle drilling waste. They claim that their procedure for managing waste materials specifies the storage, transportation, disposal, and monitoring of the waste and contains a worker protection plan to minimize exposure.
Biodiversity
In 2013, BHP introduced new biodiversity targets. The first target focused on a core business requirement to develop land and biodiversity management plans that include controls to prevent, minimize, rehabilitate and offset impacts to biodiversity and ecosystems services. They also claim to have targets to “finance the conservation and continuing management of areas of high biodiversity and ecosystem value that are of national and international conservation significance”, where they work in an alliance with Conservation International (a leading no governmental organization). Some examples where they say they are working to preserve land are Cradle Mountain and Lake St Clair in Tasmania, Australia (11,000 hectares), the Los Rios region, Chile (50,000 hectares) and new Mexico Coal asset in the, USA.
Energy
“Efficiently using energy” is stated early when discussing BHP Billiton’s energy usage. They continuously explain their annually increasing energy usage with the increase in operations while they at the same time claim to search for new technology to constantly decrease their usage. This can be seen in the disclosure checklist.
Water
Environmental and economic values as well as expectations from stakeholders are mentioned as factors for the importance of water management. In 2014 it is explained that in order to reach sustainability within their operations it is crucial to manage water through appropriate quality/quantity and responsible/appropriate amount of usage. During 2011-2014 they developed over 500 projects to install leak monitoring and they also continued studies about water footprint. BHP discusses different risks associated with their different operational sites and how they implement quantitative water balance models to predict and support the management of water inputs, use and outputs and to enable timely management responses to water-related risks.

Scandals and controversies

Borneo coal mining controversy

Information in sustainability reports
There is no information in the sustainability report regarding this incident.
Published independent information
In October 2013, BHP Billiton encountered heavy opposition from JATAM (The Indonesian Mining Advocacy Network) when they were preparing to open seven coal concessions, which together would cover 3,500 km2 of rainforest in Borneo, Indonesia. Part of the operation is in the transnational “Heart of Borneo” conversation area, described as “The lungs of Asia” (London Mining Network, 2013). Coal mining operations in these areas were said to be disastrous for the local people as well as the environment and that it would cause health problems, pollution and human rights abuses. Among other statements, Hendrik Siregar of JATAM claimed, “BHP Billiton, backed by UK shareholders and investors, tells the world that it is resourcing the future. Local communities in Central Kalimantan are telling us that coal mining is destroying their future.” (London Mining Network, 2013)

George’s River pollution

Information in sustainability reports
There is no information in the sustainability report regarding this incident.
Published independent information
In 2012, Endeavour, a BHP Billion subsidiary was accused of releasing high levels of zinc, copper, nickel, arsenic and aluminum into Brennan’s Creek, which flows into the George’s River south of Sidney. The water in George’s River had, among other things, been used for swimming, fishing, watering veggie patches and leisure purposes but local communities were never notified if the polluted water could have a negative impact on health (ABC News, 2012). BHP Billiton, however, rightfully claimed they had license to distribute waste in the area (ABC News, 2012). There was a long going investigation about this matter, which in April 2013 resulted in Environment Protection Authority (EPA) conducting a license variation notice, basically giving BHP continued right to dump waste and pollute the river. At the same time, however, the EPA also added to the license that BHP Billiton were required to perform a program of works to achieve 95% species protection in Brennan’s Creek and the George’s River by December 2016 with the addition of ongoing controls (EDO NSW, 2013).

Rio Tinto

Rio Tinto is the world’s second largest mining-company based on market value in 2015 (Statista, 2015). They state that they collaborate with neighboring communities to seek a sustainable improvement for climate change, water & air.

Information in Sustainability report

Information in Chairman’s Letter

The focus of the chairman’s letter in 2012 was to gain the financial trust back as this trust was damaged due to of a number of events within the organization. The material events were the impairment of US$14.4 billion in the beginning of the year, a discussion of the management of capital and the executive remuneration linked to board effectiveness. Because of these events the former CEO stood down and was replaced.
In 2013, the focus was on Rio Tinto’s strong financial results and the restoration of the financial trust that was lost the previous year. It also focused on health and safety for the workers as a result of the three fatalities that occurred this year. The chairman also makes the statement: “We believe earning the trust of our host communities and governments is vital in creating sustainable shareholder value” (Rio Tinto, 2014).
2014´s chairman’s letter is the first of these letter that mentions the environmental impacts of the company and it states that as society’s expectations regarding this matter is increasing they strive to create mutual value. It also mentions that environmental investors seek strength, reliability and consistency and that the company will deliver sustainable returns to shareholders. In addition to the environmental issues they mostly write about their positive results, the increase in dividends and the addition of new board members.

Information in CEO Statement

In the 2012 CEO statement the newly appointed CEO Sam Walsh writes about Rio Tinto’s safety improvements and how it, despite these improvements, were fatalities within the organization. He continues with writing about the importance of achieving zero unnecessary cost and that the focus for him as a new CEO in the coming year will be on managing the business portfolio by exploring new potential operations and letting go of the ones with little or no future. Regarding the environment, he writes about the Oyu Tolgoi mine in Mongolia, which he mentions in the context of being a big part of Rio Tinto’s growth investments.
In 2013, the CEO put a lot of focus on the environment and that it is important to minimize the impact on the stakeholders to deliver long-term business value in order for Rio Tinto to uphold their social license to operate. Further in the statement, he mentions that they met their 5 year goal from 2008 to lower greenhouse gas emission by 10% and that new goals will be set in 2015. He further mentions safety and that Rio Tinto, despite their improvements in this area, still have much to do, that this is the focus of all employees and that nothing is more important.
In the beginning of the 2014 statement he once again talks about safety. He says that even if there has been improvement within this area there have still been fatalities, which is not acceptable in Rio Tinto’s organization. Due to this they have revised and refreshed the 2014 safety strategy. There is a small section covering environmental information where they state that their 2015 target for greenhouse gas emission that was met last year now have decreased by 18% since 2008. Moreover he writes that they have got awards related to environmental work for their sustainable development of 2014. He ends with saying that the focus for the coming year is both safety for the employees and the work for the environment and its surroundings.

Further information of interest

When creating value, one of the most important steps for Rio Tinto is to maintain their operations in the long-term and to achieve its legitimacy from society by how they handle the closedown and rehabilitation of operational sites. They mention Flambeau, Wisconsin in the USA as a former mine that is now a healthy mix of woodland, grassland and wetland. They also mention a former mineral sand mine near Punakaiki in New Zeeland which is currently being transformed into a corridor of native forest. In New Zeeland they are working with the government and voluntary organizations in order to restore the eco-system in a proper way.
Further on in the report Rio Tinto writes that during the whole value creation chain, from planning and development to operation and closure, they engage with stakeholders, as they believe that it is vital to face challenges in order to minimize the risk of operations and to capture upcoming opportunities. They write that maintaining a good relationship with stakeholders is crucial to maintain their social license to operate and to deliver a sustainable growth.
Under the environmental section in all sustainability reports during this time period they use statements as “Wherever possible we prevent – or otherwise minimize, mitigate and remediate – harmful effects that our operations may have”.

Scandals and controversies

2012 London Olympics and Bingham Canyon Mine, Utah

Information in sustainability reports
There is nothing to be found in the sustainability report regarding this issue, information that mentions the event can only be found on their webpage where Rio Tinto shortly describe what kind of metal the mine delivered for the Olympic medals.
Published independent information
One event that got Rio Tinto a lot of attention was when they where to deliver the metal for the Olympic medals to the Olympic games in London 2012. This was because the Olympics in London had the goal to be the most sustainable Olympics ever arranged, covering every aspect of the games. The critique given included thoughts related to Rio Tinto’s comment that participation in the arrangements of the games could show the world how sustainable they where. The critique was based on the thought that Rio Tinto used this as a way of providing a picture of the company as being sustainable when a lot of organizations and individuals did not share that picture, hence they got critique for greenwashing (Al Jazeera, 2012).
The mine in Utah that provided the metal for the medals faced a lawsuit for air pollution a year after the Olympics and had, according to doctors consulted in the article, polluted the air for at least five years in way equivalent to smoking 20 cigarettes a day for people in the surrounding areas. People had reacted to the statement the former CEO Tom Albanese made when they won the 2012 Olympics contract. In this statement he said, “Being ethically responsible is a thread that runs through everything we do. We aim to bring long-lasting positive change to the communities where we work, respecting human rights, bringing economic benefits and looking after the environment … we have rigorous standards for air quality, ecosystems, biodiversity, climate change, the use of energy, land and water and waste disposal“ (The Guardian, 2013).

Table of Contents
1 Introduction
1.1 Background
1.2 Problem Discussion
1.3 Research Questions
1.4 Purpose
1.5 Delimitations
2 Frame of references
2.1 Greenwashing
2.2 Impression Management
2.3 Sustainability Reporting
2.4 Global Reporting Initiative
2.5 Transparency and Disclosure
2.6 Stakeholder Theory
2.7 Legitimacy Theory
3 Methodology
3.1 Research strategy and approach
3.2 Studied Companies
3.3 Data collection
3.4 Credibility check
4 Findings/Empirical findings
4.1 BHP Billiton
4.2 Rio Tinto
4.3 Glencore
4.4 Vale
5 Analysis
5.1 BHP Billiton in the context of greenwashing
5.2 Rio Tinto in the context of greenwashing
5.3 Glencore in the context of greenwashing
5.4 Vale in the context of greenwashing
6 Conclusion
7 Discussion
8 Ethical Issues
9 References
GET THE COMPLETE PROJECT