The Sustainable Oil
A study on Swedish fuel and petroleum companies on how they ensure legitimacy through their CSR communication.
Authors: Mohamad Omar Farazj (960914), Susanne Croona (861026)
Autumn Term, 2020
Business Administration, Master thesis, 30 Credits Subject: Business Administration
Örebro University School of Business Supervisor: Kristian Kallenberg Examiner: Tommy Borglund
Abstract
Date: 14th January 2020
Course: Business Administration, Master thesis, 30 Credits
Authors: Mohamad Omar Farazj, Susanne Croona
Tutor: Kristian Kallenberg
Title: The Sustainable Oil. A study on Swedish fuel and petroleum companies on how they
ensure legitimacy through their CSR communication.
Purpose: This study aims to describe and analyze how companies in the Swedish petroleum and
fuel industry ensure legitimacy in their organization through CSR communication.
Research Questions: How do petroleum and fuel companies build and ensure their legitimacy
through CSR communication? How do petroleum and fuel companies communicate their CSR work towards their stakeholders? How have laws and regulations had an impact on petroleum and fuel companies' way to communicate their CSR work towards their stakeholders?
Theoretical Framework: The theoretical framework consists of previous research, Legitimacy
theory, Corporate Social Responsibility (CSR) and Institutional theory before the chapter concludes with a summary on how these theories will be used.
Method: To answer the purpose, the choice has been made to use a qualitative method by
reviewing companies’ sustainability and/or financial reports.
Results: This study concludes that the studied companies had different ways of building and
retaining their legitimacy. The studied companies are trying to curb this through various liability measures by implementing it in the organization as this shows what the company stands and strives for. This is done through what is right in relation to the moral system of the environment and they are striving for a better future by communicating about their sustainability work to ensure legitimacy.
Keywords: Sustainability, Legitimacy, CSR, CSR Communication, Fuel and petroleum industry,
Table of contents
1. Introduction ... 1
1.1 Background discussion ... 1
1.2 Problem discussion ... 2
1.3 Purpose and research questions ... 4
1.4 Limitations ... 4 2. Theoretical framework ... 5 2.1 Previous research... 5 2.2 Legitimacy theory ... 6 2.2.1 Creating legitimacy... 7 2.2.2 Maintaining legitimacy ... 7 2.2.3 Pragmatic legitimacy ... 8 2.2.4 Moral legitimacy... 8 2.2.5 Cognitive legitimacy... 8 2.3 CSR ... 9 2.3.1 Economic ... 9 2.3.2 Social ... 10 2.3.3 Environmental ... 10 2.4 CSR Communication strategy ... 10
2.4.1 The stakeholder information strategy ... 10
2.4.2 The stakeholder response strategy ... 11
2.4.3 The stakeholder involvement strategy ... 11
2.4.4 Four criteria for sustainable CSR communication ... 11
2.4.5 First criteria... 12 2.4.6 Second criteria ... 12 2.4.7 Third criteria ... 12 2.4.8 Fourth criteria ... 12 2.5 Institutional theory ... 13 2.5.1 Neo-institutional theory ... 13 2.5.2 Normative isomorphism ... 14
2.5.3 Coercive isomorphism ... 14
2.5.4 Mimetic isomorphism ... 14
2.6 Theoretical framework connection... 15
3. Method ... 16 3.1 Methodological approach ... 16 3.2 Method selection ... 16 3.3 Content analysis ... 17 3.4 Data collection... 17 3.5 Coding manual ... 18 3.6 Quality criteria... 19 3.7 Method reflection ... 20 4. Empirical data ... 22 4.1 Empirical introduction... 22 4.2 Preem ... 23 4.2.1 Preem 2010 report ... 23 4.2.2 Preem 2015 report ... 24 4.2.3 Preem 2019 report ... 26 4.3 OKQ8 ... 28 4.3.1 OKQ8 2010/11 report ... 28 4.3.2 OKQ8 2015/16 report ... 29 4.3.3 OKQ8 2019/20 report ... 31 4.4 Statoil/Circle K ... 32 4.4.1 Statoil 2010 report ... 33 4.4.2 Statoil 2015 report ... 34 4.4.3 Circle K 2019 report ... 36 4.5 St1... 37 4.5.1 St1 2015 report ... 37 4.5.2 St1 2019 report ... 38 4.6 Summary ... 40 4.6.1 Preem 2010-2019 ... 40
4.6.2 OKQ8 2010-2019 ... 43 4.6.3 Statoil/Circle K 2010-2019 ... 45 4.6.4 St1 2010-2019... 47 5. Analysis... 50 5.1 Analysis method ... 50 5.2 Strategy... 50 5.3 Stakeholders ... 51 5.4 Environment ... 52 5.5 Discussion ... 54 6. Conclusion ... 58 6.1 Study conclusions ... 58 6.2 Contribution ... 60
6.3 Implications and future research ... 61
7. References ... 63
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1. Introduction
____________________________________________________________________________ The first chapter of this study provides a background discussion of the challenges petroleum and fuel companies face. This is then followed up by a problem discussion on how these companies communicate to ensure legitimacy. The chapter ends with the purpose and limitations of the study. ____________________________________________________________________________
1.1 Background discussion
Oil has been an important resource for the modern economy (Sällh, D., Höök, M., Grandell, L. & Davidsson, S. 2014). Carbon dioxide emissions have been increasing since the 20th century. This increase has mostly been due to the combustion of fossil fuels that has increased the number of transports, production, and a growing population (Ekonomifakta, 2020). Sweden lacks its own oil production and has therefore been dependent on its import. Sweden has a large refinery capacity which means that more oil is being imported than consumed (Sällh et al., 2014). The oil companies in Sweden with largest market shares today are Preem, OKQ8, Circle K and St1 (Drivkraftsverige, 2019).
Since the 1970's Sweden has decreased its dependence on fossil fuels. This has largely been due to the sudden increase in oil prices on the world market, but also due to the production of biofuels which started to gain popularity around the 1980’s (Ekonomifakta, 2020). Consumption of oil based products such as; fuels for motor vehicles, boats and aircraft has been cut in half since the mid-70’s and today accounts for around 30 percent of the country’s total energy consumption (Drivkraftsverige,n.d). Yet the biggest reason for lower carbon dioxide emissions lies in the carbon dioxide tax introduced 1991 in Sweden (Naturvardsverket, 2004). The most difficult sector to find environmentally friendly alternatives to oil has been the transportation sector where approximately 80 percent is still being used today (Drivkraftsverige, n.d.). Furthermore, climate change is without a doubt one of the greatest challenges of our time. This change is largely driven by increased carbon dioxide emissions into the atmosphere (Drivkraftsverige, n.d.).
Today companies express their commitment to their stakeholders through their sustainability work. Due to digitalization, globalization and greater environmental awareness the sustainability reports have become a more exposed information channel (Frostenson, Helin & Sandström, 2015). People are becoming more environmentally aware, and they care more about where their products and services come from (Kanji, 2010).
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According to Deegan (2002), sustainability issues have become a recurring topic that is of great importance where good sustainability work can result in increased legitimacy. It is claimed that companies that ignore CSR work will risk their existence on the market (Conesa, Soto-Acosta, & Palacios Manzano, 2016). It is important for a company to be objective when choosing what information, they are to convey to the entire world (Hahn & Lülfs, 2014). Legitimacy is therefore essential for a company as it affects their reputation and the impression they leave on their stakeholders (Suchman, 1995). Legitimacy is described by Suchman (1995) as following:
Moir (2001) claims that consumers require companies to not only maintain sustainability and green thinking but also greater responsibility within ethics, environment, and human rights which the author refers to as CSR. Companies need to formulate sustainable strategies and work on sustainable issues to effectively communicate with their stakeholders.
An effective approach for companies to stand out amongst their competitors and differentiate their products is by including advertising messages such as “eco”, “green” and “sustainability” (Chen & Chang, 2012). It has made companies invest and increased their work with sustainability issues, but the risk is that they present themselves as more environmentally friendly than they are. This has developed the term “Greenwashing” which refers to a company creating an environmentally friendly image, spreading misleading information about their positive impact on the environment, society, and the sustainability of their products (Bretcu & Bosânceanu, 2017). The Chen & Chang (2012) study showed that consumers in Taiwan are greenwashed, they take risks when buying products marketed as environmentally friendly with labels such as “eco”, “green” and “sustainable”.
1.2 Problem discussion
The United Nations has formulated sustainable development goals that the world needs to uphold and fulfill until 2030. In the report, The United Nations has conducted 13 different goals aimed at all the countries in the world (FN, 2020). One of these goals is eliminating carbon dioxide emissions. According to the United Nation (2020), every country in the world must act and responsibility to make it easier for all people to use renewable energy sources.
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A worthwhile mention in relation to United Nations sustainability goals is the popularly known Paris agreement. This agreement formed a law in 2015 with the goal of preventing global warming and adjusting the unsafe impacts of environmental change more effectively. Every country in the European Union has to decrease its emissions by 40% by 2030 and 63% by 2045. Moreover, Sweden has its own goal to reach net-zero emission by 2045 in sectors such as transport, agriculture, housing, and waste (Naturskyddsföreningen, n.d.). An ongoing topic in Sweden’s government is the phasing out of fossil fuels. Fossil fuels are mostly used in construction machinery and transport. Construction machineries include industries, forestry and agriculture. Domestic transportation includes shipping, train traffic, road traffic and aviation. The most frequently used fossil fuels in Sweden are diesel, petrol and natural gas. These three fossil fuels have approximately the same emission intensity, emission per energy used and thermal output. Therefore, the transition from one type of fossil fuel to another fossil fuel cannot sufficiently reduce greenhouse gas emissions. A third of the fossil fuel emissions in Sweden come from construction machinery and transport. This means that the emissions are not decreasing at the right rate to reach the government's objective. For Sweden to achieve net zero emission by the year 2045, the use of fossil fuels in domestic transportation and operating machinery must be reduced to zero (Regeringen, Dir. 2019:106).
In other words, the oil industry is forced to move in a different direction. Sustainability has to become the pinnacle of their entire business model. There is not only pressure from the consumers but also organizations such as the United Nations, The European Union and the other countries that these oil companies operate in. Laws and regulations are forcing these industries to either adapt or shut-down their business. This in turn challenges the legitimacy of oil companies with the largest market shares in Sweden.
Deegan (2002) mentions the importance of high legitimacy for an organization's survival where the organizations constantly need to be in line with the norms and expectations of the society to not lose their legitimacy. Previous research has also shown that companies emphasize activities in their sustainability report to satisfy stakeholders and create higher legitimacy (Liu & Taylor, 2008). Alternatively, companies can manipulate and distort their reports in various ways in order to retain the legitimacy of their company (Deegan, 2002). Grafström, Göthberg & Windell (2015) discusses the importance of communication through CSR, as it increases the transparency of the company. Suchman (1995) defines legitimacy as actions deemed desirable by the society following the expected norms, beliefs and values of that society’s system. This theory is elaborated and discussed further by Burlea Schiopoiu & Popa (2013) and they mention that an organization can be severely sanctioned and even shutdown if not respecting the society’s moral values. Moreover, they point out that the organization must justify their existence by acting legitimately socially and economically to not jeopardize their existence. The oil and petroleum industry needs to portray themselves as sustainable to retain their legitimacy. The dilemma that arises in such a severely
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regulated industry is how these companies communicate their CSR work to their stakeholders and the world, because of their negative impact on the environment.
1.3 Purpose and research questions
The purpose of this study is to describe and analyze how companies in the Swedish petroleum and fuel industry ensure legitimacy in their organization through CSR communication.
The purpose will be fulfilled by answering the following research questions:
● How do petroleum and fuel companies build and ensure their legitimacy through CSR communication?
● How do petroleum and fuel companies communicate their CSR work towards their stakeholders?
● How have laws and regulations had an impact on petroleum and fuel companies' way to communicate their CSR work towards their stakeholders?
1.4 Limitations
The authors have made several limitations to this study in order to fulfill its purpose. The study is limited to and focused on petroleum and fuel companies with the largest market shares in Sweden which are; Preem, OKQ8, Circle K and St1. This study analyzes and compares these companies between the years of 2010, 2015 and 2019; how their CSR communication has improved over the years, specifically their CSR communication strategies. Furthermore, how these companies adapt to laws and regulations within that period of time, where the focus lies on neo-institutional theory.
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2. Theoretical framework
____________________________________________________________________________ The second chapter presents the study's theoretical framework. Previous research provides a short introduction to the theories which is then followed up by a thorough presentation. Legitimacy Theory, Corporate Social Responsibility (CSR) and Institutional Theory are then described before the chapter concludes with a summary.
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2.1 Previous research
Back in 2010, the market was all about oil prices and its development. Moreover, the prices and the consumption of complements to oil such as ethanol and biofuel. The financial crisis was still affecting Sweden and investments in renewable energy sources were put on hold. Renewable energy was a small topic when looking over the oil and biofuels industry in 2010. Even in those days, the oil industry had pressure from laws and regulations, one specifically relevant back then made in 2009 was RED (Renewable Energy Directive). This directive meant that 20% of energy consumption would have to come from renewable energy sources in the entire European Union by 2020. In addition to that, 10% of the transport sector would have to be on renewable energy sources in all countries for the European Union by 2020. During that period, Sweden’s goal was to run on 50% renewable energy sources by 2020 (Drivkraftsverige, 2010).
In 2020 some of the biggest oil and biofuel companies in Sweden, Preem, Circle K, OKQ8, and St1 came together with politicians, governments and organizations to make Sweden climate neutral, reaching net-zero emissions by 2045. The most important goal was to heavily reduce the use of fossil fuels. Sweden wanted to have a leading role in their neighboring countries in the European Union as well as globally when making the necessary climate changes within the oil and petroleum industries. The RED II act was initiated in 2018 which goal was to run the European Union on 32% renewable energy sources by 2030 (Drivkraftsverige, 2020). Furthermore, the goal for the transport sector was to run on 14% renewable energy in the European Union by 2030. Sweden’s goal was to run on 49% renewable energy sources by 2030. What is more is that Sweden’s parliament wanted to decrease greenhouse gas emissions by 70% within domestic transport and air travels by the year 2030 compared to 2010. By 2040 the goal for Sweden is to run on renewable energy sources, and by 2045 the goal is to be completely climate-neutral reaching net-zero emissions of greenhouse gas emissions (Drivkraftsverige, 2020).
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The enormous progress towards broader digitalization, environmental awareness sustainability acts, and sustainability reports have made these companies more exposed. Their CSR commitment is more open and public than ever (Frostenson et al 2015). Previous studies suggest that a major incident can lead to an entire industry increasing their CSR reporting (Patten, 1992; Deegan, Rankin, & Vought (2000). In Patten (1992) the author examines how an oil spill in Alaska affected the American oil companies and how it led to a significant rise in the CSR reports. Deegan et. al (2000) made a similar study to Pattens (1992) and found that company-specific incidents cause other companies within the same industry to increase their reporting of CSR.
While climate change is not a major incident, it is a major problem. It can be seen how the companies’ CSR reporting and the results they achieve improve significantly as society as a whole is changing its direction towards renewable energy sources. CSR can be divided into three categories: economical, environmental, and social. The development of CSR and sustainability questions started in the early 1990s. Different types of environmental standards began to circulate for companies and environmental issues were to be included in their operations, on how they work to improve the situation. CSR commitment provides greater competitive advantages and also has a beneficial effect on the company’s performance. This in turn can provide improved customer satisfaction, a good reputation, a high degree of goodwill and long-term survival on the market (Lueg, Pedersen och Clemmensen, 2013). At the same time, it is claimed that companies that allegedly ignore CSR work are risking their existence in the market due to this behavior (Conesa et al, 2016). Companies have had to strengthen their legitimacy by developing corporate programs and policies that contribute to better sustainable development (Borglund, De Geer & Hallvarsson, 2009). O’Donovan (2002) mentions in his study that companies choose to report their sustainability work based on the theory of legitimacy. Stakeholders’ expectations are higher, and they demand more from the companies. Nowadays it is even more important to report CSR work towards stakeholders in order to uphold the company’s legitimacy.
2.2 Legitimacy theory
From a traditional perspective, profit maximization has been a central measure to see a company’s performance capacity (Deegan & Unerman, 2011). Early in the 80s a lot of researchers realized that companies' social commitment to the public had a big impact on the companies’ survival and therefore suggested several ideas on how companies could achieve a higher legitimacy (Deegan & Unerman 2011).
Legitimacy is a term that has been discussed among a lot of researchers and is today a well-researched subject. According to Suchman (1995), the core of legitimacy lies in how the environment forms its perception of a company or a particular organizational behavior. This means that the companies legitimacy depends on how they are perceived. Brown & Deegan (1998) argues
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that legitimacy theory is based on the idea that companies, organizations and governments need acceptance or legitimacy depending on where they operate. For example, a certain government is required to have legitimacy with its parliament and indirectly with the citizens in the country. A company can be multinational and have stakeholders across borders as well as be locally limited down to a single region as their entire market. The situations and conditions may be different, but the idea that companies must strive for acceptance and legitimacy in their business environment remains.
2.2.1 Creating legitimacy
According to Dowling & Pfeffer (1975), there are three strategies for creating legitimacy. The first strategy is to adapt to the already existing target groups within the organizations’ current environment. The second strategy is to choose between several environments until finding one target group that can support the organization's current practice. The third strategy is to try and manipulate the environment by creating new target groups and new legitimacy values. These strategies are explained by Suchman (1995) in more detail and add that by involving the environment in decision making and considering their needs, the organization can create an image and in turn create legitimacy. Companies can by being more environmentally conscious get an audience that appreciates their commitment. Thus, legitimacy can be achieved without any major changes. The manipulation strategy often occurs in the organization's marketing when they market themselves positively to gain society's trust.
2.2.2 Maintaining legitimacy
When companies have succeeded in establishing themselves and created legitimacy in society, they can take the next step, which is maintaining their legitimacy. According to Suchman (1995), it is easier to maintain legitimacy than to create or retain it. Suchman (1995) explains two different strategies for maintaining legitimacy which are, perceiving future changes and protecting past accomplishments. The first strategy, perceiving future changes, means that companies usually strive to strengthen their ability to predict problems that may arise in the future and feel the reaction of their stakeholders to not lose their trust.
The second strategy is to protect past accomplishments meaning that the organization strengthens their current legitimacy. Future goals and intentions help companies strengthen their acquired legitimacy. This can for example improve a company's internal processes to avoid errors and succeed. The company can start from three different categories. These are, to add more supervision around internal activities, put less focus on visible approaches to achieve legitimacy as well more on prudent techniques and developing attitudes, accounts and supportive performances (Suchman, 1995).
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According to Suchman (1995), companies can attain legitimacy through three different dimensions, pragmatic legitimacy, cognitive legitimacy and moral legitimacy. All these types of legitimacies spring from the idea that activities in an organization are desirable, proper or appropriate within a socially constructed system of norms, values and beliefs.
2.2.3 Pragmatic legitimacy
Pragmatic legitimacy is based on companies’ stakeholders and their summed-up self-interest. This type of legitimacy can take place through an exchange between the organization and the stakeholders directly or with the help of social, political and economic factors to ensure their stakeholders well-being. This will make stakeholders review the activities of the companies to assess the practical consequences of them. In other words, this means that pragmatic legitimacy results in one kind of exchange legitimacy (Suchman, 1995). Palazzo & Scherer (2006) discusses that the company will hold on to pragmatic legitimacy as long as the stakeholders feel it has benefited from the company's activities. This could for example be a direct benefit as payments to the user or cost reductions. This could also be an indirect benefit as a positive impact a company has on the macroeconomic unit as a whole. Therefore, it is important for companies to inform their stakeholders of what they produce, their structure and their behavior to show their benefits.
2.2.4 Moral legitimacy
Moral legitimacy is the second way an organization can obtain their legitimacy. Suchman (1995) describes this as doing right towards the moral system which makes the organization be perceived as legitimate. The difference between moral and pragmatic legitimacy is that moral legitimacy is based on a broader social logic. An example of moral legitimacy in society is how people believe in the state and therefore accept its actions which in turn gives the state legitimacy. On the other hand, in countries with regimes, the situation may be the opposite as the regime rarely establishes any moral legitimacy. This is thus why moral legitimacy can look different depending on how the audience's value system looks (Suchman, 1995). Moral legitimacy is therefore according to (Bhattacharyya, 2015) based on how well an organization adapts to society's moral norm as people assess the organization according to its results and accomplishments. Some researchers argue that this type of legitimacy is the most common type of legitimacy in today's society and something global organizations strive for (Koppel, 2008).
2.2.5 Cognitive legitimacy
Cognitive legitimacy is the third type of legitimacy that Suchman (1995) mentions. The legitimacy theory is also based on public assumptions. The author means that cognitive legitimacy is achieved in an organization when it has become self-evident for the society's individuals, in other words when it has been institutionalized in the society. An organization that has been institutionalized means that it has been accepted by the people and perhaps even taken for granted which leads to
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that the organization is rarely questioned (Suchman, 1995). Within cognitive legitimacy, there are two forms of cognitive legitimacy, a comprehensible form and a taken-for-granted one. Within comprehensibility, the world is seen as chaotic which makes individuals feel a need for concrete approaches to understanding the world. Therefore, individuals structure their experiences to create a coherent structure for how this world works (Suchman, 1995). Companies can maintain cognitive legitimacy with the help of comprehensibility which is created when the company performs predictable, meaningful and inviting actions. Comprehensibility is hence about the company performing actions that individuals in the society understand. Suchman (1995) explains that cognitive legitimacy is expressed when the organization's activities correspond to the received reality of the stakeholders and give them the right impression of the communication.
2.3 CSR
Corporate Social Responsibility abbreviated as CSR is a term that has been defined in many ways in previous literature. Today CSR is seen as a part of the company strategy and companies are more committed towards CSR, as they are more obliged to report their social and environmental commitment than ever before.
There are many different reasons why companies choose to work with CSR and according to Grafström, et al (2015) it is the fear of being criticized in the media and losing one's legitimacy one of the reasons companies choose to work with it. Grafström et al (2015) defines CSR as the company's responsibility within the community. McWilliams, Siegel, Wright (2006) chooses however to describe CSR as a situation where a company goes beyond its interest. Pomering and Dolnicar (2008) on the other hand defines CSR as a company's commitment when it comes to sustainability and social responsibility.
The emergence of CSR has contributed to many positive changes, as it is nowadays required for most companies to actively work with sustainability issues. This is because today it is no longer profitable for companies to ignore CSR as it has been shown that it has a positive impact on consumer confidence (Swaen & Chumpitaz, 2008). According to Grankvist (2012) CSR can be divided into three different responsibilities, economic, social and environmental responsibility.
2.3.1 Economic
Economic responsibility is mainly about companies using their own holdings and state funds in a responsible and good manner. This could for example include taking responsibility when paying out employee salaries or paying suppliers on time without any obstacles or delays (Frostenson et al, 2015). Companies need to be fair with their pricing, avoid monopolies and respect the market as well as make sure to not risk the survival of others over their own. This type of responsibility is
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in other words about the numerical part of a company such as their costs, results, income and assets (Frostenson et al 2015).
2.3.2 Social
Social responsibility consists of two parts, an internal and an external part. The internal part is about the psychosocial as well as the physical work environment at the job. This could for example be how a workplace is shaped and how the working hours are laid out depending on the type of company and which industry they operate within. The external part is about others outside the organization not being exploited or working in poor conditions as well as respecting human rights, offering good working conditions and a safe working environment for the employees. Human rights must then be followed in accordance with United Nations conventions and other organizations such as GRI guidelines (Frostenson et al 2015).
2.3.3 Environmental
The environmental dimension is a difficult and broad term to characterize. The purpose of this dimension is to eliminate threats to the environment, as it affects everything that has to do with the earth's ecosystem. Its focus is that companies shall run their business in a gentle manner for the earth as possible and take its limited natural resources in their work (Grankvist, 2012). This responsibility is mainly about protecting the environment and humans from different types of threats and it is also why this part is an important part of companies’ sustainability reports (Frostenson, 2015).
2.4 CSR Communication strategy
Morsing & Schultz (2006) introduced three different strategies regarding communicating CSR and these strategies change depending on how the company understands their stakeholder. The strategies are the stakeholder information strategy, the stakeholder response strategy and the stakeholder involvement strategy.
2.4.1 The stakeholder information strategy
The stakeholder information strategy is the company's CSR information communicated to their stakeholders. This type of communication is always one way from the organization to its stakeholders. This can be done through different methods for example leaflets, information brochures and press releases. The aim of this strategy is not to persuade their stakeholders but rather to give objective information about the organization. This includes sharing information about the company's good intentions and actions to the stakeholders giving them their support (Morsing & Schultz, 2006). According to Morsing & Schultz (2006) this one-way communication is not enough, and they suggest that companies develop a two-way communication instead. It also
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assumes that stakeholders take a stand through their habits, to consume, show loyalty and advocate for the company. It is necessary for companies to show their good actions, decisions and intentions to not be boycotted by their stakeholders as well as ensuring positive communication (Morsing & Schultz, 2006).
2.4.2 The stakeholder response strategy
The stakeholder response strategy is about the communication flowing from and to the stakeholders as well as increasing their identity within CSR and the company's different activities. This type of communication is based on a two-way asymmetric communication that is flowing from and to the public. Morsing & Schultz (2006) describe this as a way of influencing the attitudes and behaviors of external actors instead of changing the organization. The company wants feedback from its stakeholders about their communication as soon as possible. They achieve this by sending out polls and surveys to their stakeholders (Morsing & Schultz, 2006). Even though Morsing & Schultz (2006) describe this as a two-way communication where the stakeholders are providing feedback, they also stress that this model is rather sender orientated. Henceforth this strategy is based on the stakeholder’s responsiveness. This can be problematic when stakeholders are too passive, making the company only hear their own voice back which ends up in a one-way communication (Morsing & Schultz, 2006).
2.4.3 The stakeholder involvement strategy
The stakeholder involvement strategy is based on two-way communication where the stakeholders and the organization are trying to persuade each other. This leads to one of them eventually changing. This strategy rather than introducing a particular CSR initiative to their stakeholders, invites an intermittent negotiation with them to discuss and explore the company. By doing so the company ensures that it keeps in line with its stakeholders’ expectations and lets their opinions influence and change their company (Morsing & Schultz, 2006). This type of communication can be difficult to manage due to a large amount of stakeholders’ companies usually have. Therefore, companies need to have a clear structure for managing their stakeholders’ dialogues (Morsing & Schultz, 2006).
2.4.4 Four criteria for sustainable CSR communication
Font, Elgammal & Lamond (2016) have in their research developed four criteria that affect stakeholders. According to the authors, they should change how stakeholders perceive a company’s message.
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2.4.5 First criteria
The first criteria is about whether a company or an organization chooses to communicate sustainability explicitly or implicitly. Explicitly could for example be a tourist company claiming they have locally produced meals because they are better for the environment. On the other hand, when the communication is implicit, it implies in this case that the stakeholders feel reassured knowing where their food comes from (Font et al, 2016). Font et al (2016) believe that companies usually communicate explicitly as they mainly believe that it achieves a directly positive image of the company’s CSR work. The authors argue that companies should tone down their CSR work and instead make the communication more implicit.
2.4.6 Second criteria
The second criteria are when companies choose to incorporate CSR messages on their website or other types of media channels. Font et al (2016) discusses two different approaches, an affective and a rational approach that companies can use to describe their CSR work. Individuals who are environmentally conscious are often skeptical of an affective language when companies spread their CSR work (Chan, 2013). Companies using rational language are more confident in their CSR work by concrete evidence and third-party statements (Lowry, Roberts, & Higbee 2007). A rational language makes it easier for companies to improve their reputation. They are perceived more positively by their stakeholders when they legitimize themselves with certificates, awards and prizes (Font et al, 2016).
2.4.7 Third criteria
The third criteria describe how to frame a message as well as how customers respond to it. Stakeholders are more positive and respond better to positively framed messages rather than more moralizing messages (Font et al, 2016). For instance, a message that states taking the bus is a better way to see and enjoy the landscape has a positive framework. It has an experiential benefit and is written for customers who are not particularly interested in the environment. On the other side, the message can be framed negatively, as it is better to take the bus because if everyone travels in their own car it will lead to increased environmental pollution. This type of message is more suitable for customers who are more environmentally conscious as it clearly highlights the benefits of it (Font et al, 2016).
2.4.8 Fourth criteria
The fourth criteria that Font et al (2016) states are the active/passive dimension of sustainability messages. Cialdini & Goldstein (2004) found that when the message maker directs their message linking with a positive experience which strengthens the customers' will to participate.
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Conversely, if it is believed that the customer will not gain any positive experience from participation, the business may then communicate passively. This could for instance be when a restaurant communicates the sourcing of its food as local or organic on the grounds that this does not require their customers to change their behavior. This means that the customer's experience does not change even if the food is local or organic, while at the same time it does not add to the carbon footprint of the planet either.
2.5 Institutional theory
The institutional theory differs from the other theories as it has another way of looking at the actions of organizations compared to the classical organizational theories. The institutional theory looks at how organizations are affected and influenced by the environment, formal and informal rules. Through this, the institutional theory explains how various changes and fashions arise, traverse and are managed by organizations. Furthermore, change and development are seen as a successive process that leads to an organization eventually becoming more stable. According to the theory, all these pieces influence the way organizations act (Eriksson Zetterquist, 2009).
The institutional theory was founded in the late 18th century and argues that the human is not economically rational complete and only makes decisions that can maximize its own benefit Eriksson Zetterquist, Kalling & Styhre, 2012). According to DiMaggio and Powell (1991), the institutional theory exists in several different disciplines such as economy, sociology and political science, which they believe has meant that there is not any definition on what an institution is as there are many. In all disciplines, the fundamental idea is still the same, that institutions are being created when people construct their social reality. An institution can be anything from a handshake or a marriage to economic and political rules. Within the institutional theory, three different areas have developed which are early institutional theory, neo-institutional theory and Scandinavian theory (Erisksson-Zetterquist, 2009).
2.5.1 Neo-institutional theory
The primary premise of the neo-institutional theory is that companies improve and build their legitimacy by meeting the expectations of stakeholders (Berrone & Gomez-Mejia, 2009; DiMaggio & Powell, 1983; Scott, 1987). According to Frostenson (2015), the neo-institutional theory encompasses elements of legitimacy theory but links to a greater extent external dependency to various forces and phenomena that control groups of organizations to act or organize themselves in a certain way. The neo-institutional theory contributes to explanations of how organizations are partly dependent on their culture as well as the political environment (Frostenson, 2015). These organizations are influenced and controlled by different forces in the outside world which for instance could be the constructed system of rules. This in turn leads to organizations being pressured by their surroundings and therefore they choose to adapt to the needs
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of their surroundings (Frostenson, 2015). Frostenson (2015) also mentions that organizations are being affected partly by the social norms and partly laws which are called isomorphism. DiMaggio & Powell (1983) uses the concepts of organizational field and isomorphism to explain why organizations develop their plans, ideas and strategies until they are more and more similar. They found three different processes that show how organizations become more alike. Three types of isomorphism were identified normative, coercive and mimetic isomorphism.
2.5.2 Normative isomorphism
This type of isomorphism stems mainly from professionalization and according to Matten & Moon (2008) education and professional authorities directly and indirectly set legitimate standards for organizational methods. Based on these standards organizations change their operations in the industry. DiMaggio and Powell (1983) mention two different main aspects of professionalism that lead to isomorphism which are education and professional network. By education, the authors mean what the individual receives from university and college. This leads for example to the relationship between managers and employees improve and organizational norms being created for how they should behave. The second aspect which leads to how normative isomorphism arises is the development of professional networks. This is meant by how the different networks develop together and lead to the spread of similar rules and norms about how the right organizational behavior should be.
2.5.3 Coercive isomorphism
The second type of isomorphism which is coercive isomorphism arises from formal and informal pressures by the environment and other influential organizations (DiMaggio & Powell, 1983). Formal pressure can for example be in the form of demands from the government that force a specific industry to comply with laws and regulations. For example, organizations may be required to prepare sustainability reports, which need to be designed in a certain way. On the other hand, informal pressure can, for example, be a requirement for financial reporting.
2.5.4 Mimetic isomorphism
The third type of isomorphism which DiMaggio & Powell (1983) mentions is mimetic isomorphism and which according to them is driven by some form of uncertainty. This refers to organizations being in an insecure environment, which tend to emulate and imitate successful companies in the same industry. This does not necessarily mean that they do it deliberately, but because there is no other way to achieve their legitimacy. The new organization usually forms a structure after the previous organization and the less successful organization imitates the successful one, which leads to an imitation process. Furthermore, an example of mimetic isomorphism is when a company has joint different business alliances and adopted sustainability training to acquire knowledge and carry out its own sustainability activities. Meyer & Rowan
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(1977) explain that isomorphism causes companies to become more successful and in the short term being able to survive.
2.6 Theoretical framework connection
The theoretical framework forms the basis for the analysis work and is in line with the purpose of the study. The theories in the study provide an overview which helps to analyze how companies ensure their legitimacy. Legitimacy is about the justification from the outside world which means that the company must accept some form of authorization from society. Frostenson (2015) therefore claims that companies use sustainability reporting according to the legitimacy theory to improve their public perception. Legitimacy can therefore exist as a basis for what companies report in their sustainability reports. Companies maintain and establish their legitimacy through CSR communication. The communication in sustainability reports helps to ensure the company’s legitimacy. Companies are expected to maintain their social responsibility, CSR helps them with that by managing their stakeholders and society’s expectations. Ensuring legitimacy means also adapting to laws and regulations as well as stakeholders expectations, which is analyzed within neo-institutional theory. The legitimacy theory alone would not have been enough to conduct the study. The neo-institutional theory and CSR communication strategies are the two shoulders upon which legitimacy theory stands and helps to analyze how oil companies ensure their legitimacy through their CSR communication.
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3. Method
____________________________________________________________________________ The third chapter of this study begins with a methodological approach followed by a method selection, content analysis and data collection. This develops into a coding manual and the chapter ends with quality criteria and method reflection.
____________________________________________________________________________
3.1 Methodological approach
There are two ways to approach a study, a deductive or an inductive approach. A deductive approach is based on existing knowledge within a particular field. The researcher sets up an empirical study that derives hypotheses that are then to be accepted or rejected. This type of approach involves that the researcher specifies how the information is being collected. An inductive approach, however, means that the observations lead to a theory as a result of research effort. This means that the researcher draws generalizable conclusions based on observations (Bryman & Bell, 2017).
This study follows a deductive approach where the authors are collecting data from sustainability- and financial reports which is then put against the theoretical framework (Bryman & Bell, 2017). The authors have decided to examine four different petroleum and oil companies in Sweden; specifically, how these companies ensure legitimacy through CSR communication as well as to adapt to laws and regulations. The authors' delimitations have limited this study to compare the companies sustainability and financial reports over the periods of 2010, 2015 and 2019. Moreover, how the companies differ from each other by setting them against one another. These years have been chosen to get a broader understanding of how Preem, OKQ8, Circle K and St1 have changed over time.
3.2 Method selection
Qualitative and quantitative methods are two different research methods that can be used in a study. According to Bryman & Bell (2017), a qualitative method is a method that is subjective and emphasizes the interpretation of words and meaning when obtaining data. This method has an interpretive approach that focuses primarily on how the researcher interprets the social reality and the effect it has on a study’s objectives (Bryman & Bell, 2017). Lindblad, (1998) however describes a qualitative method as a study based upon reflected interpretations, which are to expand the researcher’s understanding of the research area. The quantitative method is a method where
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the emphasis lies on the collection and analysis of data (Bryman & Bell, 2017). To answer the purpose of the study, the authors have chosen to conduct a qualitative content analysis.
3.3 Content analysis
According to Bryman and Bell (2017), content analysis is useful when researchers are searching for answers in written documents. This sets up a framework for how the text should be read in order to receive the information in a proper manner. Bryman & Bell (2017) addresses two important features of content analysis which are the objective approach and the systematic approach. An objective approach means that the material must be collected in advance and then be divided into different categories. In this way, the researchers themselves do not affect the collected data during the collection process. Content analysis is adapted to each individual case where the researcher specifies in advance the criteria to be applied. In this study, content analysis has been used as a tool to create the necessary framework for the coding manual. This was achieved by reviewing the sustainability reports and using that information to systematically categorize the proper sections for the coding manual, in accordance with Bryman & Bell (2017). The results in the empirical data show condensed paragraphs from the companies reports, which have been obtained through the coding manual.
3.4 Data collection
Primary data is data that is processed by the authors in the study to answer the purpose and research questions (Bryman & Bell, 2017). Secondary data on the other hand is data that has already been collected and processed by someone else in a previous stage. In this study, the focus lies on primary data based upon the petroleum and oil companies’ sustainability- and financial reports. Literature studies have been analyzed thoroughly to support the theoretical framework and provide a foundation for the research method. The keywords in this study are directly linked to the theories which are CSR, CSR Communication strategy, Legitimacy theory and Institutional theory. The sustainability- and financial reports were collected from each company’s website. The scientific articles as well as textbooks were gathered through Primo (Örebro University Library’s search engine) and Google Scholar. Electronic sources were collected from websites online. One important note is that St1’s sustainability report for 2010 could not be retrieved.
The authors have chosen to use the sustainability reports as the basis of this study since these reports contain valuable data about a company’s sustainability work. When sustainability reports could not be retrieved the authors chose to use the company’s annual reports instead.
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3.5 Coding manual
The coding functions as a dictionary in which the coding clarifies what type of data should be collected (Bryman & Bell, 2017). According to Bryman & Bell (2017) code systems are central to content analysis and highlights two main aspects of coding; the coding scheme and the coding manual which is also part of the content analysis. In a coding scheme, related information to the particular case or subject is entered. The coding manual creates the coded dimensions to be used in the coding process. These dimensions are assigned to different categories. The reliability of coding becomes of great importance and should be done in a consistent way (Bryman, 2018).
The company's sustainability- and financial reports cannot be measured directly which is why specific indicators, codes and words are examined and assessed indirectly. The authors have through qualitative content analysis extracted particular categories from the sustainability- and financial reports. These categories have been reviewed and then attributed to the theoretical framework. The authors built a structure based upon the reports, which then created the coding manual. According to Bryman & Bell (2017) coding is a starting point for most qualitative data analyzes. In this study, a coding manual has been used to support the analysis and is based upon the data collected by the reports. The coding manual was made in advance, meaning before the information from the reports was gathered. This expedited the data collection process, making it more structured. Bryman & Bell (2017) mentions that it can increase the understanding of data and contribute to making fitting empirical selections. Furthermore, they claim that it can help lessen the stress when analyzing large amounts of data. The data was organized and openly coded forming three categories. Open coding means that the sentences and paragraphs were collected by reading the reports. This material was thoroughly processed to create the appropriate headings. The categories are based upon the theories within the theoretical framework. Categories help to build greater knowledge and are also a way to describe the participants' experiences (Elo & Kyngäs, 2008).
When analyzing the legitimacy of the company, one can does not avoid the company’s strategy. These companies legitimize themselves by having a sustainable strategy. The CSR communication is the second building block which in a way is an extension of the legitimacy theory. It gives the overall picture of how companies work with society and society itself is closely associated with its stakeholders. The final category discusses the environment which analyzes how these oil companies are affected by laws and regulations. The plan is to analyze the sustainability reports while keeping the categories and the theoretical framework in mind to form codes for each category. Words in the reports that are distinctive and coincide with the categories and theories will be focused upon to get an accurate understanding.
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In other words, the coding manual functions as a dictionary in that the coding clarifies clear instructions about what type of information the content analysis should be aimed at and what type of data should be collected (Bryman & Bell, (2017).
Figure 1, Coding manual, source: Own image
3.6 Quality criteria
According to Bryman & Bell (2017), reliability and validity are two of the most important criteria for assessing quantitative and qualitative research. Reliability is a research criterion that acts on the reliability of a study and addresses the question of whether the study is replicable or not. Validity is, however, whether the result generated by a study is valid or not.
Sometimes reliability in the results and the conclusion which are drawn can be hard to determine. By discussing reliability and validity, and preventative measures a researcher can assure its readers
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of the reliability of a study. Validity is a measurement to ensure that the indicators designed to measure a concept are really measuring. Reliability is a measure to ensure that the indicators are reliable and true (Bryman & Bell, 2017). One big important quality criterion in business economics research is reliability. High reliability in studies rely on if the outcome of a study can be repeated. In qualitative research, reliability can be divided into two concepts; internal and external reliability.
Internal reliability is about the researchers’ agreement on how the material should be interpreted and analyzed in the study. External reliability on the other hand means that high external reliability studies are not affected by external circumstances. External reliability can often be difficult to meet as it is required, that the approach is described in a very clear and comprehensible way by the researcher so that the study can be replicated (Hassel, Ljungdahl & Larsson 2008). The authors in this study are aware of this problem and therefore strive after giving accurate descriptions of the selected analysis concepts. They also aim to provide a clear link to the theory and method. Furthermore, by performing the analysis together and not alone, the authors can ensure that they are both in agreement and that the collected material is interpreted and analyzed in the same way.
The research questions are clearly linked to the objective of the study which makes the validity of this study high. This study will only present these four Swedish companies and will therefore not represent the whole fuel and oil industry, which also indicates a narrow conclusion compared with having both international and Swedish companies. Bryman & Bell (2017) believe that in a qualitative study, the researchers do a deep study, which can be difficult to understand if the study would be applied in a different context at a later time. Transferability shows at which level researchers can place the results in the social reality. To make the results more probable, the authors have only gathered information from sustainability reports and financial reports to answer the research questions. To get a strong validity, the authors have not used their own values or own perspectives.
3.7 Method reflection
Qualitative research is particularly questioned due to its problem of providing sufficiently high transferability, reliability and validity. Although, quantitative research has been criticized for not distinguishing between the conditions of nature, people and social institutions (Bryman & Bell, 2017). The authors did not conduct any interviews to avoid relying too much on subjective opinions. However, this research will lack deeper information, which could have been interesting to include, for example, St1 sustainability report from 2010. It is also difficult to ensure that the research is very effective as the data collection can be updated and changed. In addition, it can also be complicated to draw conclusions about how Preem, OKQ8, Circle K and St1 ensure legitimacy in their organization through CSR communication as they differ in size and global reach. As a
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result, this study will not be able to illustrate the entire Swedish oil industry but will function more as a benchmark and guideline for future studies.
One of the advantages of content analysis is that it is an open research method that allows replications and follow-up studies, and it is an objective analysis method. (Bryman & Bell, 2017). Within this study, the empirical material is based on the content of the sustainability and financial report which means that the material collection is not based on interaction with people or respondents. In this way the authors do not risk affecting the content collected through their opinions.
There are also disadvantages in using content analysis as a research method. Bryman & Bell (2017) believe that the quality of content analysis is fundamentally linked to the quality of the material that has been studied. The authors have in accordance with Bryman & Bell (2017) assessed the authenticity, credibility and representativeness of the empirical data, which in this study refers to the company's reports. All the material that the authors have collected is also available online on every company's website. There is also a risk that the document analysis may depict the information that the company has chosen to share which affects the reliability of the analysis (Bryman & Bell, 2017).
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4. Empirical data
____________________________________________________________________________ In the fourth chapter of the study, the authors present the data from reviewing the companies' sustainability and annual reports. The chapter begins with a short introduction of how laws and regulations have affected the fuel and petroleum industry. Thereafter, every company's results are introduced separately year by year. This chapter ends with a summary of each company to get a better overview of the results.
____________________________________________________________________________
4.1 Empirical introduction
In Sweden 2018 January 1st, the climate law came into force. This means that current and future
governments will conduct a politic in relation to the climate law. The purpose of this law is to reach milestones during 2030, 2040 until Sweden reaches net zero-emission by 2045 (Naturvardsverket, 2020).
The transport industry is the most dependent on fossil fuels. The European Union has introduced directives on renewable energy and fuel quality, to increase the use of renewable energy alternatives and reduce the negative impact on the climate. In Sweden, these directives fall under the Sustainability act and the fuel act which the Swedish Energy Agency has the supervisory authority for (Energimyndigheten, 2019).
The Swedish Government’s goal is to lower the transport sector’s emission by 70% by 2030 compared with 2010. However, the number of vehicles on the road complicates these goals because transport is important. This had led to an increase in electric vehicles. Electric cars run on batteries with taxes and costs that are much lower than vehicles that run on liquid fuels. It is hard to predict fuel prices until 2030 (Trafa, 2020).
Some of the biggest cities and regions in Sweden are joining together to lower the emissions of the transport sector. The goal is to become completely fossil free by 2030. These regions and cities will invest in new infrastructure, renewable energy sources and changing incorporated behaviors. The purpose of this partnership is to lower carbon dioxide emissions by 9000 tons per year (Projektfossilfritt, n.d.).
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4.2 Preem
Preem AB is a Swedish oil and biofuel company founded in May 1996 and before that it went under the name OK Petroleum. Preem has today approximately 570 petrol stations and two refineries in Sweden which refine more than 18 million tons of crude oil every year. Preem has approximately 1500 employees and about 950 of them work at the refineries. In 2019, Preem’s turnover was 95 billion SEK (Preem, n.d.).
4.2.1 Preem 2010 report
The information below is cited from Appendix 1, Preem, (2010).
Strategy
Preem’s vision was to lead the transformation to a sustainable society. To achieve their vision Preem defined four strategic areas. These four areas were; adapted products, climate-adapted production and delivery, sustainable business and profitability. Climate-climate-adapted products meant manufacturing renewable fuels and in spring 2011 Preem launched their new green diesel, Preem ACP Evolution diesel. They mentioned that new climate adapted fuels are an obligation in the development of a sustainable society. Preem was striving towards a completely climate-neutral production. They strived to achieve this by having an efficient energy refining, reducing their carbon dioxide emissions, increasing their degree of filling and implementing eco-friendly driving.
Sustainable business for Preem meant creating and ensuring a safe working environment for their employees. They wanted to focus on their personnel, facility safety and employee satisfaction. Preem’s strategic area profitability refers to their whole core business; Supply, Refining and Marketing & Sales. They aimed to create value in a long-term sustainable way by having as little impact on the environment as possible. Preem’s CEO has stated how they are striving to make the company as sustainable as possible and pointed out that they wanted to be the first into the future. Moreover, he stated that their vision for a sustainable society was to attract the talents of the future as well as that their stakeholders will demand environmentally sustainable alternatives.
Stakeholders
Preem stated in their report that their business model had changed. They focused more on their customers specifically families and women. Their petrol stations were upgraded having more generous opening hours, fresher environment, healthy food and premium coffee. According to Preem this allowed them to increase their sales and market share. They wanted to lead the transformation into a sustainable society.
In the long run, Preem aimed to avoid physical-, material- and human damage, and ensure a safe working environment for their employees. They invested in a culture with more personal customer service. The plan was to imprint a personal touch to all their offers and discounts at their stations.
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They wanted to be the first into the future and their vision was founded on the belief that their stakeholders will demand more environmentally sustainable alternatives.
Environment
Preem was at the forefront of sustainability compared to international countries, they had a high percent of renewable fuel in accordance with the EU objective. The EU objective was to yearly reach 2% renewable fuel. Sustainability required great efforts as carbon dioxide emissions were expected to rise with 1.6% every year. IEA mentioned that fossil fuels will be the leading energy source in 2030, while renewable energy slowly increases.
In Preem’s report, they discussed how to transition from fossil fuel to renewable fuel. According to them, they already created one renewable fuel which was their green diesel. Moreover, they stated that refinery development played a central role in the transition and that they were aiming to double the capacity of their biorefinery. Their focus would lie on finding new alternative raw materials to refine and to further develop their biorefinery in Gothenburg. Preem’s CEO also mentioned in their report that if the government constantly changed the fuel companies’ way to operate, environmentally friendly initiatives would fade. He also stated that clear guidelines and rules for operating on the market were essential for stimulating new developments and investments.
According to Preem, they operated in an industry where a complex combination of macroeconomic factors affected the companies’ opportunities to create value. A crucial factor was the relationship between the market price of crude oil and the refined oil products. Furthermore, Sweden´s and EU´s demands aimed to reduce the greenhouse gas emissions which is why Preem made the strategic decision to be the leader in the transformation into a sustainable society. This meant that they would make larger investments to develop more sustainable fuels.
4.2.2 Preem 2015 report
The information below is cited from Appendix 2, Preem, (2015).
Strategy
In 2015 Preem mentioned that their vision was to lead the transformation into a sustainable society. They had two refineries which are considered some of the most modern and environmentally friendly in Europe with a refinement capacity of 18 million tons of raw oil per year. Preem stated that an important part of their strategy is to expand their presence in their local markets. Major oil companies have chosen to leave the European market for refinement and end consumer sales whereas new competition has arisen. Preem’s goal was then to build more market shares internationally.
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Three important words that the Preem CEO focused on in the report was responsibility, integration and innovation. Responsibility which was at that time a new area of sustainable development would ensure that Preem then and in the future would be a financially, socially and environmentally responsible company. It would give Preem the opportunity to be behind a clear sustainability strategy. Integration for Preem meant creating a strong community that would clarify and include sustainable development and diversity. Preem aimed to be innovative internally between colleagues, individually and in their business. These three words represented a stable foundation for Preem’s ambitions toward the future.
Stakeholders
Preem’s goal was to offer their clients the market's most sustainable diesel by optimizing their green content and replacing fossil fuels with sustainable fuels on a long-term basis. Sustainable development had become an important part of Preem back then in order to build an economic, social and environmental responsibility.
Preem wanted to lead the transformation to a sustainable society, which meant taking a step ahead and daring to invest in sustainable fuels. They wanted to increase their focus on sustainability work and concentrate their efforts on their business field, sustainable development. This would make sure that Preem could meet and take advantage of the opportunities in an increasingly changing world. It would help them create long-term success and develop Preem from an economic, social and environmental perspective. They were fully convinced that this path would create long-lasting revenue, as it was positive for the people and the environment.
Environment
During 2015 Preem mentioned that they made a big development by producing their fuels with partly tall oil. Preem evolution fuel claimed to be the greenest oil on the market with 10% renewable raw materials, which was twice as much as any other fuel on the market at that time. 5% of the renewable raw materials came from tall oil and the other 5% from ethanol. Preem’s long-term investments in sustainability led to the company being the only fuel company invited to Paris by the Swedish prime minister Stefan Löfven and the climate-environmental minister Åsa Romson to share Preem’s vision and hopes for political initiatives.
According to Preem an important task within the business back then was to influence politicians and other decision makers and make them understand the often complex issues in the energy and fuel industries. These companies needed their help to legislate policy instruments and create economic conditions for their long-term sustainable development. Preem was dependent on the political decisions made in both the EU and Sweden. Moreover, Preem also stated that because of their unique position in their industry they have on several occasions been invited by the government to meetings on environmental and energy issues. At that time Preem had already made
