The role of Environmental, Social and Corporate Governance criteria: A case study of the 2010 Mexican Gulf oil spill

Abstract

As years have passed, is clear how society has been evolving. The discovery of new technologies in many different industries has helped them evolve and become more important. Many of these industries, because of its expansion and aggressive approaches, have become harmful for our environment, who right now is at major risk. When thinking about industries or firms that harmed the most our planet and our people, the energy industry makes the t top three most pollutants sectors, because of how delicate and difficult some of the projects related to the extraction of oil are. The impact that these industries is having within society has been increasing, as people are becoming more concerned about that damages that these practices can have in our planet and society. It is why Corporate Social Responsibilities has developed into a very important part of businesses, as it combines both the successful management of a company with the care of society and environment. How can firms from the energy sector avoid oil spills and other accidents? Why do they happen, if many precatives measures are taken? From a first glance it might seem that accidents in the oil industry are due to engineering or environmental problems, but tin fact it is clear how a wrong management of a firm’s departments, structure and projects can lead to such issues. Due to the extreme importance that the safety of our environmental and people require, the purpose of this paper is to study the relationship between Environmental, Social and Corporate Governance (ESG) criteria and how they can make an impact in firms from the oil industry, and to shed some light to the ESG theory and practice and its limitations. By conducting a case study analysis, relying in both financial and ESG methods, my research shows significant relevance between a firm. From the oil industry performances and the ESG factors. Moreover, from the analysis it can be deducted how the Environmental, Social and Corporate Governance criteria can contribute to financial and non-financial value creation.