Assess the company's : Royal Dutch Shell (UK/Netherlands) external environment using three or more media sources to identify factors that are impacting their business model and take a stance on...

ENVIRONMENTAL ANALYSIS OF OIL CO. ROYAL DUTCH SHELL
ENVIRONMENTAL ANALYSIS OF OIL CO. ROYAL DUTCH SHELL
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ENVIRONMENTAL ANALYSIS OF OIL CO. ROYAL DUTCH SHELL
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Introduction
Shell is a very renowned global company that provides gas and petrochemical energy. Its
headquarters is located in Hague, Netherlands, and are one of the market leaders in oil
and gas industry in the world. Shell has its presence in more than 100 countries
worldwide with a good employee resource of around 1,00,000. Shell has a vision to
become a market leader in the domain of oil and gas exploration in the world for which it
follows two broad strategies like upstream strategy and downstream strategy. In upstream
strategy its aim is to explore the new and unexploited resources of energy by heavily
investing in those areas and using the advanced technology to take the most out of these
situations (Van Der Heijden, K., 2015). In downstream strategy company selects the
growing markets to enter into and then relies on its existing assets to explore these
markets and try to take up as much revenue as possible. The objective of this paper is to
discuss the environmental analysis of Shell.
PESTEL Analysis of Royal Dutch Shell
Political Forces-
There is a huge pressure on the companies like Shell from the EU and UN in the matters
like curbing the carbon emission and charging the penalties in form of the initiatives the
companies have to beer in for of the betterment of the government. There is increased
pressure on the oil and gas giants due to some of the political policies of major countries
like US that the oil and gas companies can only exploit new bio fuels but on the other
hand Shell is a oil and gas extracting company with an expertise in only this department,
and all its assets aligned towards it.
To curb some of the negative impacts, Shell has taken some of the progressive steps like
doing alliances with the Climate Action Partnership US which is an positive attempt of its
to position its name as a socially responsible company but because of its high emission of
the greenhouse gases it has to alliance with some of the other government agencies which
has less harsh gas emission regulations.
On the other hand in the less developed African countries like Nigeria, where people are
looking for good opportunities and the government is looking for some FDI from
companies like SHELL, it enjoys good control over the regulation besides being highly
greenhouse emitting business (J.M., 2016). These countries only expect a positive impact
on economy.
The free trade agreements also played a very crucial role in increasing the market of Shell
and other oil extraction company especially the free trade agreement between US and
Europe. From the inception Russia is the hub of big oil reserve and Shell took a good
advantage thereby extracting a good amount of oil with the help of its technology assets
and exporting it globally to meet the demands.
Symptoms: Due to the various political factors, the strategy of Shell is on a constant re-
engineering and is shaped according to region it is targeting. More and more alliances are
trying to be done, So that it eases the way of the Shell to carry on with its work of oil and
gas extraction. Many new technologies are being undertaken which are more
ENVIRONMENTAL ANALYSIS OF OIL CO. ROYAL DUTCH SHELL
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environmental friendly. New and innovative ways of oil and gas extraction form the non-
conventional sources are being worked out.
Environmental
Since over the time of almost 60 years the number of conventional resources of oil and
gas has been declining at a very rapid pace and Shell is investing a huge amount to find
new unconventional sources of oil and gas and till now it has been very successful in
doing that. But it comes with a huge cost of environmental degradation because the
carbon emission from these resources are much more as compared to the conventional
once, so this has made Shell one of the most carbon emitting companies in the world.
Symptoms: To curb the hazardous environmental impacts many new internal policies and
processes have been undertaken. So that the green house gases emission can be put under
control (Dummett, K., 2014). The new processes and mechanisms may be a little
expensive but the research and development is going on to make that sustainable. Newer
opportunities of exploring other forms of energy are being looked out keeping in mind
the limited amount of oil resources in world. Many new initiatives like planting carbon
consuming gardens in its every location so that the carbon emitted by the plants can be
consumed by the flowers and some percentage of the carbon emission is cut and the
balance can be maintained but still it has to carried out on a very big level.
Social
There is a huge social impact of the oil and gas production by shell not only on
environment but also on the society. The working conditions of the manufacturing plant
is very dangerous to the health of the people many a times leading to even death of its
employees. There are often new of release of the gas flares from the manufacturing plant
of Shell, but the management of reluctant of taking any steps to cut the cost and increase
the profit. Moreover they were also indulged in the controversy of negatively
manipulating the customers by...