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Acentuando la ética

Accentuating ethics

Demand is on the increase for companies to behave responsibly, by making not only financial criteria but also environmental aspects and respect for human rights an integral part of their culture. This process means looking beyond the short term, and is also the responsibility of states, investors and civil society.
Repsol has presented its sustainability plans for 2013-2014, incorporating new social concerns such as reductions in the time suppliers have to wait for payment and the promotion of diversity.


"The era in which companies allotted a certain sum to philanthropy" without a sustainable business model behind them "is over", suggests Maria Bernarda Zapata, one of the figures responsible for administering Corporate Responsibility at Repsol. A better-informed and "much more demanding" society calls on companies to integrate within their strategy a preventive focus to avoid the potential negative impacts of their operations, along with mechanisms to deal with them. A responsibility which the more advanced sector of the business world sees as a voluntary aspect, going beyond the legal requirements, while being linked to the ethical values of the surrounding context.

In September this year Repsol published its 2013-2014 sustainability plans at the corporate level and for the eight countries where it has its most significant operations: Spain and Portugal, Bolivia, Brazil, Ecuador, USA, Peru and Venezuela. Each plan includes between 30 and 80 specific initiatives, with measurable indicators, intended to provide a response to the expectations of stakeholders, from investors to consumers, in fields such as governance, human rights and employment practices. Issues which "have a clearly positive influence on a company's bottom line, but cannot be seen from one year to the next".

Protect, respect, and rectify

Veleta
The Guiding Principles for companies and rights proclaimed by the United Nations and unanimously adopted in 2011 establish the behaviour expected of enterprises and states with regard to internationally recognised human rights. Principles which served "finally to establish a common language for civil society, companies and governments. And which clearly defined the obligations of each party". These principles are not legally binding, but Repsol has taken them on board as a central plank of its responsibility policy. Standards which establish first of all the duty of states to protect these rights.

Companies have a responsibility to respect them, without violating third-party rights, while redressing any consequences which their activities may generate. A responsibility which must also be shown in commercial dealings with suppliers, contractors and partners. "It is essential" that companies exercise their influence "above all when working in countries where, for example, employment legislation is much laxer than in Europe". Repsol has begun to undertake "specific ethics and human rights audits of our suppliers" and is incorporating clauses setting out a commitment to respect such rights in the operational contracts signed with partners. These plans also include positive selection practices which will reward those contractors offering the highest safety standards, and Special Employment Centres which employ differently abled people in Spain.


Companies have a responsibility to respect them, without violating third-party rights, while redressing any consequences which their activities may generate. A responsibility which must also be shown in commercial dealings with suppliers, contractors and partners. "It is essential" that companies exercise their influence "above all when working in countries where, for example, employment legislation is much laxer than in Europe". Repsol has begun to undertake "specific ethics and human rights audits of our suppliers" and is incorporating clauses setting out a commitment to respect such rights in the operational contracts signed with partners. These plans also include positive selection practices which will reward those contractors offering the highest safety standards, and Special Employment Centres which employ differently abled people in Spain.

Companies with fair practices

Prácticas justas
"Transparency is a fundamental issue, above all at companies like ours which operate in different countries". Transparency which is also seen as including the fight against corruption and bribery. An aspect in which mining and hydrocarbons companies "have always been more in the spotlight, because we make use of the resources which exist in a country. And the money that generates should go to those communities". Repsol is a founding member of the Extractive Industries Transparency Initiative (EITI), which scrutinises the taxes and royalties paid by companies to states. This initiative has supervised more than 800 million euros of public revenue in 34 countries rich in natural resources. Within its corporate plan, Repsol has reinforced its Standard of Ethics and Conduct, "including a description of the behaviour expected of employees", which will also be applied to contracts with distributors in Spain and Portugal.

Repsol likewise aims to respond to another of the fundamental expectations within this sector, namely environmental safety and oversight of its exploration and production (E&P) activities, incorporating undertakings to develop less pollutant lubricants, to improve water management and the protection of biodiversity in its E&P projects. It is likewise committed to energy efficiency policies such as the incentives programme in Peru to promote "changes in energy consumption among the population to adopt cleaner fuels".


Repsol's sustainability policy likewise impacts on the need to work with local communities, since "it is not enough simply to have the required public permits; what matters is to achieve agreement and collaboration". This is what is known as social licence to operate, a task which, if it is not performed, ultimately "generates an operational cost, in terms of delays, strikes or blockades". The plans list actions which range from the signature of agreements with the indigenous Kichwa and Waorani peoples in Ecuador to support for social and cultural initiatives in towns nearby its refineries in Spain.
Repsol's sustainability policy likewise impacts on the need to work with local communities.

Ethical criteria for investors

Pintura mural
In supporting ethically responsible companies "investors are the first parties capable of exerting an influence". A change in mentality is still needed in the marketplace, although "an increasing number of investors take an interest in ethical, social and environmental issues, and not simply the financial performance of a company". The world's largest investment fund, the Norwegian Pensions Fund, played a pioneering role in this field when it decided to exclude from its portfolio companies manufacturing nuclear weapons and cluster bombs, and to include among its investment criteria respect for the rights of children and climate change policies. So-called "shareholder activism" is also increasingly frequent: institutional investors presenting motions at AGMs to promote sustainable performance.


Sustainability indices are another tool available to the market to evaluate companies. These include in particular the Dow Jones Sustainability Index, "given its global significance". Repsol has been the leading company in its sector on this demanding index, which has admitted only 15 of the 125 oil companies analysed. The EU is now working towards a Non-Financial Reporting Directive which will force all European companies with more than 500 workers to present in their annual report significant information on their environmental, social and employment policies. An initiative which "will help bring non-financial performance onto the radar screens of many investors".
The EU is now working towards a Non-Financial Reporting Directive which will force all European companies with more than 500 workers to present in their annual report significant information on their environmental, social and employment policies.

Increasing social demands

Alongside companies, investors and states, social responsibility also needs citizens to play their part in "taking purchasing decisions which are not simply economic, so as to define what we want our companies to be". A civil society which, through consumer organisations or trade unions, conveys concerns such as compliance with supplier payment terms, a problem which "at the corporate level does not bother investors, but does worry the society around you". Among measures to support a life/work balance, Repsol will be extending its teleworking programme to employees in other countries such as Bolivia.

The rise in Internet campaigns and platforms addressing the issue of corporate reputation likewise reflects the fact that the populace "is increasingly questioning us about more issues". The sustainability plans aim as far as possible to align the company's performance with these expectations, alongside an awareness that "there are some which are at loggerheads with our business, where we will not be able to offer a response". Ultimately the important factor to bear in mind is that "it is one thing to abide by the law, and another to be an ethically responsible company," concludes Zapata.
Last updated: December 2013

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