Drivers that motivate energy companies to be responsible. A systematic literature review of Corporate Social Responsibility in the energy sector

Journal Pre-proof Drivers that motivate energy companies to be responsible. A systematic literature review of Corporate Social Responsibility in the energy sector Latapí Agudelo Mauricio Andrés, Jóhannsdóttir Lára, Davíðsdóttir Brynhildur PII:

S0959-6526(19)33964-2

DOI:

https://doi.org/10.1016/j.jclepro.2019.119094

Reference:

JCLP 119094

To appear in:

Journal of Cleaner Production

Received Date: 18 April 2019 Revised Date:

25 September 2019

Accepted Date: 29 October 2019

Please cite this article as: Mauricio Andrés LatapíAgudelo, Lára Jóó, Brynhildur Davíðó, Drivers that motivate energy companies to be responsible. A systematic literature review of Corporate Social Responsibility in the energy sector, Journal of Cleaner Production (2019), doi: https://doi.org/10.1016/ j.jclepro.2019.119094. This is a PDF file of an article that has undergone enhancements after acceptance, such as the addition of a cover page and metadata, and formatting for readability, but it is not yet the definitive version of record. This version will undergo additional copyediting, typesetting and review before it is published in its final form, but we are providing this version to give early visibility of the article. Please note that, during the production process, errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain. © 2019 Published by Elsevier Ltd.

Word count: The number of words for this review article is 12,310 for the body of the manuscript. This includes tables and figure captions. This excludes the appendix. This amount of words is just above the 12,000 word limit indicated for review articles. However, it is relevant to consider that this paper includes a large number of tables and figures.

Title: Drivers that motivate energy companies to be responsible. A systematic literature review of Corporate Social Responsibility in the Energy Sector Author names and affiliations: Family name(s), given name(s) Latapí Agudelo, Mauricio Andrés

[email protected]

Jóhannsdóttir, Lára

[email protected]

Davíðsdóttir, Brynhildur

[email protected]

All the authors are affiliated to the University of Iceland, Sæmundargata 2, 101 Reykjavík, Iceland. Corresponding author: Family name(s), given name(s) Latapí Agudelo, Mauricio Andrés

[email protected] Telephone: +354 7623307

Present/permanent address: University of Iceland, Sæmundargata 2, 101 Reykjavík, Iceland.

Motivating factors for responsibility in the energy sector

Internal Drivers

Connecting Drivers

External Drivers

Business strategy

Branding and reputation

Competitiveness

Corporate Culture

Reporting and disclosure

Legislative and regulatory

Cost Savings and profitability

Social license to operate

frameworks

Environmental Commitments

Social commitments and

and climate change adaptation

engagement

and mitigation

Stakeholder engagement and

Risk prevention and

satisfaction

management

Word count: The number of words for this review article is 13,098 for the body of the manuscript. This includes tables and figure captions. This excludes the appendix. This amount of words is just above the 12,000 word limit indicated for review articles. However, it is relevant to consider that this paper includes a large number of tables and figures.

Title: Drivers that motivate energy companies to be responsible. A systematic literature review of Corporate Social Responsibility in the Energy Sector 1

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Abbreviations: CSR = Corporate Social Responsibility; CSV = Creating Shared Value; EITI = Extractive

Industry Transparency Initiative; IRENA = International Renewable Energy Agency; GRI = Global Reporting Initiative; SLR = Systematic Literature Review; SDGS = Sustainable Development Goals; THPC = Theun-Hinboun Power Company; UK = United Kingdom; USA = United States of America;

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Abstract Energy companies are increasingly pressured to address a broader set of social responsibilities that go beyond legal and environmental requirements, which motivates them to incorporate a holistic approach to their activities. To do so, many firms have adopted Corporate Social Responsibility (CSR) as a response to a diversity of pressures but also as a framework that enables them to prevent and manage risks and be proactive in the context of climate change. While the drivers behind CSR have been thoroughly studied, the specific motivations for energy companies to adopt CSR seems to be missing in the literature. Therefore, the objective of this paper is to review the literature in order to identify and categorize the drivers that motivate energy companies to adopt CSR. To do so, a systematic literature review is conducted that covers all the academic publications from 1990 to 2018 available in four scientific databases and focusing on CSR in the energy sector. The findings indicate that five internal drivers, three connecting drivers, and four external drivers can be identified in the literature as motivations for energy companies to adopt CSR. In addition, it is found that energy companies have a responsive or proactive approach towards the implementation of CSR. This article contributes to the literature by providing a broad systematic review of the academic publications on the topic and by identifying and categorizing the different drivers for CSR implementation that have been pointed out by the scholars in the sample. The practical contributions of this research come from presenting the drivers that motivate energy companies to adopt CSR, which provides understanding of the rationale behind responsible business practices and can translate into positive implications for the energy sector in terms of governance, legislation, and innovative business frameworks. This study can be useful for scholars and practitioners alike because it outlines the most relevant lines of research on the topic and provides a synthesis of the literature that highlights research gaps as well as trends. Keywords: Corporate Social Responsibility, Energy Sector, Social Responsibility, Corporate Behavior, Sustainable Development, Drivers of Corporate Social Responsibility

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1. Introduction Energy companies are increasingly being pressured to address a broader set of social responsibilities that encompass aspects such as human and labor rights, stakeholder engagement, environmental performance, and social impact, among others (see: Benites-Lazaro, Giatti, & Giarolla, 2018; Choumert Nkolo, 2018; Liu, Garcia, & Vredenburg, 2014). Given this context, energy companies need to respond adequately to social expectations, local and international regulatory frameworks, and international initiatives and agreements such as the Sustainable Development Goals (SDGs) in order to maintain their social license to operate (e.g. Curran, 2017), safeguard their reputation, position themselves in ranking indexes (e.g. Bolton, Kim, & O'Gorman, 2011), remain competitive (e.g. Dong & Xu, 2016), and keep and attract talented employees through their corporate culture (e.g. Raman, 2018). The complexity of addressing such a broad diversity of social expectations while attending the firm’s strategic objectives has led energy companies to look into new business frameworks that can help them in the decision-making process. In particular, many firms have adopted Corporate Social Responsibility2 (CSR) as a response to higher social expectations but also as a framework that allows them to prevent potential risks (see: Pegg, 2012) and take proactive measures in the context of climate change, while some have even used it with the specific aim of pursuing a positive social impact beyond the company’s direct influence, such as a means of contributing to the SDGs (see: Bhattacharyya, 2007; Mezher, Tabbara, & Hosani, 2010; Pegg, 2012). It is important to consider that CSR has been understood as a way of addressing the social expectations of the time and in turn it has acquired a certain relation to the sustainable development agenda (see: Carroll, 1999; Carroll, 2015; Latapí Agudelo, Jóhannsdóttir, & 2

Even when there are many definitions of CSR (see: Dahlsrud, 2008), the modern understanding of the concept

is clearly identified by the European Commission (2011) which indicates that companies have a responsibility for their impact on society and to be socially responsible they need to integrate “social, environmental, ethical human rights and consumer concerns into their business operations and core strategy” (European Commission, 2011, p. 4). The modern understanding of CSR can also be observed in the work by Chandler (2016) who defines it as a strategic business perspective incorporated “within a firm’s strategic planning and core operations so that the firm is managed in the interests of a broad set of stakeholders to optimize value over the medium to long-term” (Chandler, 2016, p. 248)

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Davídsdóttir, 2019). Furthermore, the role of energy companies and their approach to CSR has acquired a higher level of relevance in the current context of the SDGs because of its direct and indirect influence for achieving other goals (see: United Nations, 2017). The same can be said of the approach of energy companies to CSR in the current context of the energy transformation, as defined by the International Renewable Energy Agency (IRENA) in its report “A New World: The Geopolitics of the Energy Transformation” (IRENA, 2019). In this sense, understanding the perspective of energy companies and the reasons that drive them to implement CSR becomes a relevant topic of study. Even when the drivers behind the implementation of CSR have been thoroughly covered in the literature (e.g. Arena, Azzone, & Mapelli, 2018; Carroll & Shabana, 2010; Lozano, 2015), a comprehensive study of the specific motivations of energy companies to adopt CSR seems to be missing. Several articles have analyzed individual drivers for CSR in the energy sector, such as the social license to operate (see: Curran, 2017), profitability (see: Ekatah, Samy, Bampton, & Halabi, 2011), and reporting (see: Mobus, 2012), among others, but it seems that only Stjepcevic and Siksnelyte (2017) have provided an overview of the drivers that contemplates the interrelation between them. This study differs from Stjepcevic and Siksnelyte (2017) because it provides an updated review of the academic literature on the topic and provides a different perspective on the drivers for CSR for the energy sector. However, this review considers the work of Stjepcevic and Siksnelyte (2017) as a starting reference for a comprehensive evaluation of the drivers behind CSR in the energy sector and takes the analysis beyond through a systematic literature review that takes a closer look into each driver. With this in mind, the objective of this article is to review the literature in order to identify and categorize the drivers that motivate energy companies to adopt CSR. This will facilitate recognition of the specific reasons that drive energy companies towards more responsible business practices. There are many studies that can be used as the basis for categorizing the internal and external drivers of CSR implementation (see: Bansal & Roth, 2000; Hart & Milstein, 2003; Tutore, 2010, 2013). However, it seems that the most suitable framework to follow for this research, because of its holistic approach, is the one proposed by Lozano (2015), who defined internal, connecting, and external drivers to engage in CSR. 4

This research follows the Systematic Literature Review (SLR) method proposed by Okoli (2015) to evaluate all the academic publications focused on the topic that can be found in four scientific databases within a timeframe that covers the period from the year 1990 to 2018. The review begins by analyzing the years and journals of publication, the geographical location of each study, the specific industry and topics in order to provide an overall portrayal of the academic literature on the subject. Afterwards, the analysis focuses on identifying the internal and external drivers that motivate energy companies to engage in CSR. To identify them, this article extracts the most relevant academic contributions to the understanding of the motivations for energy companies to adopt responsible business practices. Accordingly, the authors provide a categorization of the drivers that enables the reader to observe how different scholars have identified the drivers through a diversity of approaches in their respective studies, as well as a synthesis of the findings that shows which drivers have received a higher level of attention in the literature (see table 5). This article contributes to the literature by providing a systematic review of the academic publications on the topic. A key contribution comes from identifying and categorizing the different drivers for CSR implementation as internal, connecting, and external drivers, which can help understand the motivations dealing with internal procedures, which function as connecting factors between internal procedures and external relations, as well as those motivations that deal with the relations with external stakeholders. This review also contributes to the literature by showing that there are few academic publications on the topic and that most of them do not represent a comprehensive analysis of the drivers for CSR implementation. As explained by Tranfield, Denyer, and Smart (2003), the value of systematic reviews also comes from providing practitioners with up-to-date research that helps them make better informed decisions. In this sense, the practical contributions of this SLR come from presenting the diversity of reasons that motivate energy companies to engage in CSR and by revealing that companies are driven towards responsible behavior by a diversity of motivations that can be of a responsive or proactive character. This paper also contributes to the current understanding of the drivers of responsible business practices by providing a review of the academic research on the topic and by providing an up-to-date SLR that includes the latest publications that were produced after the adoption of the Sustainable Development Goals in 2015. Finally, this SLR can be useful 5

for scholars and practitioners alike because it outlines the most relevant lines of research on the topic. The paper follows the common structure used to present systematic literature reviews (e.g. Alves & Mariano, 2018; Farias, Santos, Gohr, Oliveira, & Amorim, 2019; Muller, Esmanioto, Huber, Loures, & Canciglieri, 2019) as well as the steps for SLR as defined by the method itself (see: Okoli, 2015). After the introduction (section 1), the paper presents the research method, providing all the details of the research design and the steps followed to conduct the systematic literature review (section 2). This is followed by the presentation of the findings which provides an overview of the literature and its main characteristics (section 3). Section 3 also includes the analytical review of the literature which presents the identification and categorization of the drivers behind CSR implementation in the energy sector. This is followed by the discussion section which provides a deeper analysis of the findings (section 4). Then, the authors present future research opportunities that became evident following the analysis of this SLR (section 5). The last section provides the main conclusions of the paper (section 6). 2. Research Method This research is conducted following the Systematic Literature Review method proposed by Okoli (2015) for developing reviews that can stand on their own as complete studies. Following this method is in line with the objective of the research because SLRs aim at synthesizing the existing body of literature and indicating patterns, themes, and gaps, while they also help identify the conceptual content of the research field (Seuring & Müller, 2008). Following the method proposed by Okoli (2015) is particularly useful because it builds on Fink´s (2010) work for conducting literature reviews and the understanding that a SLR has to follow a rigorous approach that is systematic, explicit, comprehensive, and reproducible (see: Fink, 2010; Littel, Corcoran, & Pillai, 2008; Okoli, 2015). The value of conducting a SLR comes from using it as a method for “identifying, evaluating, and synthesizing the existing body of completed and recorded work produced by researchers, scholars, and practitioners” (Fink, 2010, p. 3). Furthermore, reviews that are able to balance rigor with relevance are particularly significant because they can then be used by practitioners to make better informed decisions (Tranfield et al., 2003), while they also contribute to their academic field. To do so, this research followed the four phases for conducting a SLR proposed by Okoli (2015): planning, selection, extraction, and execution. 6

Planning and selection phases The search protocol was determined to be part of the planning stage and consisted of outlining the fundamental steps needed to conduct the SLR, which is explained in this section. For the selection phase, four scientific databases were chosen for the search of academic publications: ScienceDirect, ProQuest, Web of Science, and Scopus. The selection of these four scientific databases responded to the specific criteria defined for this SLR (see table 1), and in particular it took into consideration five aspects: 1) the databases should contain peer reviewed academic articles as well as peer reviewed institutional reports and documents; 2) they should provide open access to the full text online; 3) the majority of their publications should be in English; 4) they should contain original research; and 5) the databases should cover the topic of this review. The search was conducted under the advanced search tool of each database to which two separate search strings were applied to find the most relevant articles for this review. After several tests, the search strings were defined in a way that the results would include the highest number of articles that could potentially help achieve the objective of this SLR. However, considering the objective of this study, the scope of the search strings was limited to find those publications that specifically evaluate CSR. This ensured that a review was conducted of only the literature that revolves around this concept and avoided the need for interpretations regarding whether alternative or similar concepts can be considered as CSR. Even when Carroll (1999) explained that alternative subjects such as stakeholder theory, corporate social performance, and corporate citizenship, among others, are consistent with, and built on the modern understanding of CSR, it was decided to focus only on the literature that specifically evaluates CSR. This allowed the review to center on the literature that has the same, or a very similar, understanding of CSR. With this in mind, the first search string contained the terms “CSR”, “energy”, and “industry”. The second search string contained the terms “CSR”, “energy”, and “sector”. A third search string containing the terms “CSR”, “energy” and “drivers” was tested but the results did not focus on CSR implementation or energy companies, but rather on unrelated topics and it was decided not to use it for the selection of literature. The acronym CSR was used instead of “Corporate Social Responsibility”, considering that the search was conducted with the advanced 7

search tool of each database. Using search strings that focus on the main theme of the research is common among SLRs and helps limit the scope of the review (e.g. Alves & Mariano, 2018). As expected, the functionality of the databases differed in the results (see the search strings and results in table 1 of Appendix A). Afterwards, a practical screen was applied according to specific considerations (see table 1). The scope and timeframe were defined according to the purpose of this study, with the main field of interest being the implementation of CSR in the energy sector. In particular, this research is centered on energy companies that produce and distribute energy. The scope of the review was then limited to publications of an academic or institutional character considering that they have already undergone a rigorous peer review process that indicates a suitable quality for this paper. The year 1990 was chosen as a starting point for the search because it represents the beginning of an era of globalization, institutionalization, and the strategic implementation of CSR (see: Carroll, 2015; Latapí Agudelo et al., 2019). As Carroll (2015) explained, since the early 1990s, CSR gained attention globally because many companies saw it as way to address the challenges of globalization along with the rapid technological changes of the modern day. With this in mind, the search was limited to the timeframe of the 1st of January 1990 to the 6th of August 2018. As recommended by Fink (2010), the search was limited to original research and excluded interpretative studies and reviews with the aim of guaranteeing the quality of the findings and establishing a solid foundation from which valid conclusions could be formed. Table 1. Practical screen and selection criteria for the SLR Issue Publication type Content covered Main sector Timeframe covered Language Availability Type of study

Practical screen and selection criteria Peer reviewed academic articles as well as peer reviewed institutional reports and documents Implementation of CSR in the energy sector Energy production and distribution as well as extractive activities that can be considered as energy supply (e.g. coal mining) 1st of January, 1990 to 6th of August, 2018 English Full text available online Original research

Research methodology Qualitative and quantitative studies

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Relevance

Publications that address the implementation of CSR at an organizational or institutional level of analysis

The first search in the databases following the practical screen gave 651 results. A first quality screen was applied to these articles by reviewing the title and abstract and excluding the ones that did not meet the selection criteria or did not fit the purpose of this review. This process led to the selection of 68 publications out of 651. Having a high rate of exclusion of publications is considered common in SLRs that apply practical and quality screens and helps the review become efficient and accurate by focusing mainly on the articles of relevance (Fink, 2010). In this case, the main reasons for exclusion were that the articles did not focus on CSR in the energy sector or energy companies in particular, but rather on energy savings or energy efficiency in other sectors (e.g. energy efficiency in the shipping sector). Then, the full text of the 68 selected articles was analyzed according to the inclusion criteria and their relevance for this SLR. This was complemented with a manual screening of crossreferences in the search of additional publications of relevance. However, this process did not find additional publications that met the selection criteria. Afterwards, a second quality screen was applied and consisted of assessing the eligibility of the remaining 68 publications by analyzing carefully the full text of each one to make sure that they met the criteria for this SLR. This led to the exclusion of 13 publications, leaving 55 remaining for the final inclusion for this review (see table 2 in the Appendix). The reasons for excluding the 13 publications were: 1) the article did not focus on CSR implementation; 2) the publication did not focus on the energy sector, and; 3) the body of the article was not in English, even when the title, abstract, and keywords were. The selection process is illustrated in figure 1 while the literature search process on each database can be found in table 1 in the Appendix. As a confirmation of the relevance of the selected publications, a word frequency test was conducted with the software MAXQDA 2018. The findings revealed that the twenty most frequently used words met the expectations based on the selection criteria, with the most frequent term being “CSR” (see table 3 in the Appendix).

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Figure 1. Flow diagram of the selection process

Extraction phase The extraction phase was conducted with the support of the software MAXQDA 2018. To maximize its use, a coding frame was designed in order to extract the relevant data from the publications and structure it. The coding then later helped in the analysis of information. The coding frame was designed with an abductive approach that combined the data-driven inductive rationale with preconceived concept-driven coding (based on: Bandara, Furtmueller, Gorbacheva, Miskon, & Beekhuyzen, 2015; DeCuir-Gunby, Marshall, & McCulloch, 2010). Accordingly, a coding manual was designed consisting of the category names, definitions, and 10

specific rules for assigning the codes. A pilot test of the coding frame was performed in three articles in order to review the coding rules and coding consistency. The articles for the pilot test were selected according to their publication year: the oldest (Bhattacharyya, 2007), the latest (Feng, Chen, & Tang, 2018), and one in between (Wilburn & Wilburn, 2013). The coding consistency was reviewed several times during the extraction phase considering that the coding process followed an abductive approach and keeping in mind that coding saturation is of great relevance for achieving a “convincing, representative, theory-based and forward-looking literature review” (Bandara et al., 2015, p. 177). Execution phase As proposed by Okoli (2015), the last phase for conducting a SLR consists of the execution of the review, which involves forming a synthesis of the literature followed by the final writing process. This final phase and analysis was done manually, aided by Microsoft Excel 2013 and MAXQDA 2018, and is reflected in the following section. 3. Findings The review began with the years and journals of publication, the geographical location of each study, the specific industry of analysis, and the specific topics with the aim of providing a complete overview of the selected literature. 3.1 General overview Years and journals of publication The review reveals that there were no publications focused on CSR in the energy sector in the period from 1990 to 2007 in the four databases used for this study despite CSR having been present in the academic literature since the 1950s (see: Carroll, 2008; Latapí Agudelo et al., 2019). Notably, the number of publications increased in the period 2007 to 2018 (see figure 2). The years 2015, 2016, and 2018 had the highest number of annual publications (nine), while the year 2017 had only six publications. With regards to the year 2018, nine publications can be considered as a high number keeping in mind that this SLR was limited to the 6th August, 2018. This shows that since 2007 there has been a higher interest in the topic.

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10

Number of publications

9 8 7 6 5 4 3 2 1 0 1990

1995

2000

2005

2010

2015

Year

Figure 2. Number of publications per year Created by the authors Note: This graphical synthesis of the number of publications per year is based on this Systematic Literature Review.

The journals with the highest number of publications on the topic include the Journal of Business Ethics, Sustainability, Energy Policy, Journal of Cleaner Production, Procedia – Social and Behavioral Sciences, and the Social Responsibility Journal (see table 2). The selected articles were published in a total of 35 different journals from which only 10 published more than one study on the topic. This information reveals that the journals that have been interested on this topic are those that have a focus on the business, social and environmental dimensions of the energy sector. The analysis also reveals that the topic has been covered by a wide variety of journals (35 in total) which suggests that the relevance and holistic nature of CSR can be approached from different perspectives. From the selection of 55 articles, there have been 54 first authors and 65 co-authors. Only one author published more than once as first author and/or co-author: Petra F.A. Dilling in (Dilling, 2016) and (Dilling & Harris, 2018). This information is particularly significant because it suggests that most of the publications are original studies. However, it also intimates that the topic has not been studied in depth by scholars and leaves room for future research. 12

Table 2. Top publishing journals on CSR in the energy sector Journal Journal of Business Ethics Sustainability Energy Policy Journal of Cleaner Production Procedia - Social and Behavioral Sciences Social Responsibility Journal Energy Research & Social Science Management of Environmental Quality Renewable & Sustainable Energy Reviews Resources Policy Others (each one with only one publication) Total Created by the authors

Number of publications Percentage 5 9.1% 4 7.3% 4 7.3% 3 5.5% 3 5.5% 3 5.5% 2 3.6% 2 3.6% 2 3.6% 2 3.6% 25 45.4% 55

100%

Note: This synthesis is based on this Systematic Literature Review.

Geographical distribution of analysis The review shows that the literature focused on diverse geographical areas. The area of study with the highest level of attention was Europe with 15 publications, then Asia with 11, followed by North America with 10. The geographical distribution of the articles can be observed in the pie chart in figure 3.

Africa, 4%

Central and South America, 2%

Oceania, 5% Nordic Region, 12%

Europe, 26%

Global, 14% Asia, 19% North America, 18%

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Figure 3. Geographical distribution of areas of study Created by the authors Note:

1) This graphic synthesis is based on this Systematic Literature Review. 2) Two of the selected articles fall into two geographical areas of study. Therefore, this graphical synthesis

takes into account that there are a total of 57 different regions of study in only 55 publications.

A more detailed analysis of the areas of study reveals that the articles focused on 26 different countries while 8 publications focused on a global scale, one on Europe as a region, one on Africa as a region, and one study approached the topic at a general level and did not analyze a specific country or region. As figure 4 shows, the highest number of publications focused on the United States of America (USA) with seven studies, followed by four for India, and four for China. Most of the studies focused on a single country of analysis and only seven analyzed more than one country or region. Figures 3 and 4 show that the literature has had a higher level of attention in the USA and Europe, whereas the lower level of coverage in other areas and countries suggests a gap in the literature. This can be explained as a result of the evolution of CSR in the 20th century which followed, for the most part, an Anglo-American perspective as well as a European perspective in the late 20th century and early 21st century (see: Latapí Agudelo et al., 2019). It also seems to follow the general trend in CSR research that focuses mainly in North America and Western Europe (see: Pisani, Kourula, Kolk, & Meijer, 2017).

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Africa (general study) Australia Brazil Canada China Czech Republic Denmark Europe (general study) Finland Global Greenland India Italy Japan Lao People’s Democratic Republic Lithuania Netherlands Norway Not applicable Poland Romania Russia Spain Sweden Tanzania Turkey UK Ukraine United Arab Emiratess USA 0

1

2

3 4 5 Number of articles

6

7

8

Figure 4. Geographical distribution of areas of study by country Created by the authors Notes: 1) This graphic is based on this Systematic Literature Review. 2) The term “Global” encompasses those articles that study CSR for the energy sector in a general manner without focusing on a specific country or region of analysis. 3) The term “Europe (general study)” encompasses those articles that study CSR for the European energy sector with a regional perspective without focusing on a specific country of analysis.

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Distribution of studies by industry The analysis of the selected literature shows that 10 publications focused on the energy sector with a general approach while the rest of the articles addressed 17 different industries within the energy sector (see table 3). As table 3 shows, 18 publications focused on the oil and gas industries, followed by 10 on the energy sector in general, and 9 on coal mining. It is noteworthy that 16 studies focused on more than one industry. It is also significant to point out that 7 articles focused on renewable energy in general, 5 on wind energy, 4 on hydraulic energy, and none on solar energy. The high level of attention to the oil and gas industry seems to respond to the idea that energy companies in controversial industries tend to have a stronger interest in CSR as a means of achieving a higher organizational commitment by the staff (Roeck & Delobbe, 2012), as a way of addressing environmental commitments (Du & Vieira, 2012), or for legitimizing their operations (Oh, Bae, & Kim, 2017). Table 3. Distribution of studies by industry Industry Oil and gas Energy sector in general Coal mining Mining industry in general (energy related activities) Renewable energy Natural gas Nuclear energy Wind energy (Eolic) Hydraulic energy (Hydro) Oil Biofuel Biomass Shale gas Bitumen extraction Forest bioenergy Hydrogen Sugarcane ethanol Thermoelectric energy Created by the authors Note:

Number of studies 18 10 9 7 7 6 6 5 4 3 2 2 2 1 1 1 1 1

1) This table is based on this Systematic Literature Review.

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2) As can be seen in Table 3, there are several publications that studied more than one industry. The specific industry(ies) of analysis of each publication can be observed in Table 2 in the appendix which includes notes from the authors of this review.

Distribution of studies by topic The review shows that the articles focused on 19 different topics (see table 4). Reporting and CSR implementation had the highest level of attention with 12 studies focusing on each of them while the rest of the topics were discussed in 5 or less. Four articles concentrated on two topics and none analyzed more than two. It is relevant to notice that 4 studies focused on more than one topic. Table 4 reveals that academic attention has focused on the implementation of CSR with a particular emphasis on reporting, which shows an interest in its practical implementation and also suggests that the understanding and the definitional construct of the concept have not been explored in the energy sector. Table 4. Distribution of studies by topic Topic CSR implementation Reporting Impact of CSR Communications on company websites CSR Communications Energy governance Financial performance Legislation and regulations Business practices Company reputation Employee perception Local perception Community perception Motivations for implementing CSR Environmental and social impact Indigenous reconciliation Retention of talented employees Social license to operate Vulnerability and impact of climate change Created by the authors Note:

Number of studies 12 12 5 3 3 3 3 3 2 2 2 2 1 1 1 1 1 1 1

1) This table is based on this Systematic Literature Review. 2) More details on the specific topics of studies the articles that were analyzed can be clearly observed in

Table 2 in the appendix which includes notes from the authors of this review.

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Theoretical approach As expected, the theoretical approach in the literature varies according to the topic. The findings show that the selected articles followed 39 different theoretical approaches and that the most common were stakeholder theory with 10 publications, CSR theory with 7, legitimacy and CSR reporting with 5 each, and CSR management with 3. The rest of the theoretical approaches were used in 2 or less articles. In total, 12 articles had a theoretical approach based on more than one theory. Figure 5 shows the most common theoretical approaches used in the literature. The high number of publications that follow stakeholder theory might be explained by the responsive approach to CSR that many companies have used to address the increasing expectations of their stakeholders. This can be observed in the publication by Aguilera-Caracuel, Guerrero-Villegas, and García-Sánchez (2017) that analyzed the use of CSR for improving the reputation and public image of multinational companies, as well as in the article by Bolton et al. (2011) who sees employees as one of the most relevant stakeholders and as a key for CSR success, and also in the paper by Choumert Nkolo (2018) who sees community engagement as a key element for successful operations in the natural gas industry.

Stakeholder theory

18%

CSR theory

13%

CSR reporting

9%

Legitimacy

9%

CSR management

5%

Energy governance

4%

Institutional perspective

4%

Organizational stigma

4%

Social license to operate

4%

Sustainability reporting

4% 0%

5%

10%

15%

20%

Figure 5. Most common theoretical approaches Created by the authors

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Notes: 1) This graphic is based on this Systematic Literature Review. 2) Table 2 in the appendix includes additional notes by the authors of this paper with regards the theoretical approach and the most significant contribution of each publication of this review.

Definition of Corporate Social Responsibility The review reveals that the authors of the selected articles understand Corporate Social Responsibility in different ways. From the 55 selected articles, 43 publications present a holistic understanding of CSR, 12 articles do not mention what CSR represents, and 10 explicitly acknowledge that there is no universally accepted definition of CSR. Notably, 24 publications point out a link between CSR and sustainable development. 3.2 Analysis of the drivers for implementing CSR in the energy sector 3.2.1 Framework for the identification and categorization of drivers The literature indicates that scholars identify internal and external drivers that motivate corporations to engage in CSR (see: Bansal & Roth, 2000; Hart & Milstein, 2003; Lozano, 2015; Tutore, 2010, 2013). For this review, the framework used for the identification and categorization of the drivers of CSR for energy companies is based on the model proposed by Lozano (2015). Lozano (2015) defined the motivations to engage in CSR as internal, connecting, and external drivers. For his model, Lozano (2015) explained that these drivers can be understood as: 1) internal, when they deal with processes inside the company; 2) connecting, which are those that link internal processes with the relations with external stakeholders; or 3) external, when they refer to relations with the external stakeholders of the firm. The relevance of Lozano’s (2015) framework comes from its organizational perspective that understands companies as goal-oriented complex social systems that are part of a larger set of systems. Through this systemic lens, Lozano (2015) found that the drivers in the literature concurred with the findings from interviews performed to top level corporate managers and reached the conclusion that there are internal, connecting and external drivers for engaging in CSR. Based on his findings, Lozano (2015) proposed a framework that considers the relation between the internal, connecting and external drivers and aims to help corporations find a more proactive approach to their sustainability strategies. Notably, Lozano’s (2015) framework is 19

holistic in nature and as such it can be applied to any sector and industry. Following Lozano’s (2015) rationale, the findings of this SLR are categorized as internal, connecting and external drivers.

3.2.2 Internal Drivers Based on Lozano’s (2015) understanding of internal drivers as processes that take place inside the company, it was possible to identify 5 internal drivers within the selected articles: business strategy, corporate culture, cost savings and profitability, environmental performance and climate change adaptation and mitigation, and risk prevention and risk management. The drivers are presented in alphabetical order and this order does not represent any type of preference ranking. Business strategy While many drivers behind CSR implementation can be considered to be part of a business strategy, the findings show that only three publications explicitly mention it as a specific motivation for energy companies. Heard, Love, Sing, and Goerke (2017) began their case study on energy companies in Australia by suggesting that the main reason for adopting CSR is usually a strategic business decision, explaining that only firms that understand it as a business strategy can fully exploit its potential benefits. Arena et al. (2018) indicated that using CSR as a business strategy can be linked to business success by protecting the interests of the company in the longterm and protecting it from harmful business practices. Midttun, Dirdal, Gautesen, Omland, and Wenstøp (2007) explored the rationale behind CSR implementation and presented a case study in which energy companies understand CSR as a strategic business decision. In their case study, Midttun et al. (2007) highlighted the cases of Royal Dutch Shell and British Petroleum and explained that these companies see the success of its long-term business strategy to be dependent on meeting society’s expectations through strategic CSR. Midttun et al. (2007) identified Royal Dutch Shell and British Petroleum as forerunners in the oil and gas industry with regards to CSR implementation due to the incorporation of CSR into the company’s strategic focus and business strategy. Corporate culture 20

From the literature, it was possible to observe that the authors of 14 publications identified corporate culture as a relevant driver for CSR implementation. To begin with, Bashtovaya (2014) indicated that one of the most influential reasons for companies to engage in CSR is the moral responsibility of doing the right thing and that this belief is usually integrated in the company’s corporate culture. In a similar way, Bhattacharyya (2007) presented a case in which the corporate culture of an energy company in India is strongly influenced by its leadership’s focus on CSR and the social impact of their projects. With a different approach, Bolton et al. (2011) as well as Raman (2018) argued that companies with a strong CSR culture use it along with their reputation to retain and motivate their staff and to attract talented recruits. Furthermore, Bolton et al. (2011) and Raman (2018) pointed out that employees are the vital link with society and that CSR is a way for transmitting the company’s culture and approach to sustainability throughout their organizational structure and towards their stakeholders. Likewise, Roeck and Delobbe (2012) explained CSR as a way for energy companies to increase the organizational commitment of their staff, in particular for those companies operating in controversial industries such as nuclear energy and fossil fuels. Du and Vieira (2012) explained that a strategic implementation of CSR is a way for achieving a solid corporate culture that reflects clear social values in its internal structure but also in its relations with external stakeholders. To achieve a solid corporate culture, Ekatah et al. (2011) as well as Ngoasong (2014) pointed out that energy companies use CSR with the aim of improving the working environment and for designing a corporate culture that promotes the development of employees and improvement of working conditions, delivered through the provision of competitive salaries and ensuring an inclusive environment where the staff has a role in the planning and direction of the company. This belief is consistent with the case presented by Jindrichovska and Purcarea (2011) which suggests that the energy company ČEZ Group Romania built its corporate culture through CSR with the belief that its employees are its most significant asset. A similar case is explored by Özcüre, Demirkaya, and Eryiğit (2015) who presented the case of OMV, an Austrian energy company that sees its employees and their participation as key factors for achieving the company’s long-term success.

21

From the review, it was possible to observe that several scholars highlight stringent ethical requirements and higher operational standards as key factors in the corporate culture of energy companies with CSR. Midttun et al. (2007) explained that some of the biggest energy companies in the world see their corporate culture as a way of achieving and maintaining their organizational performance standards in aspects such as operational safety, employee and supply chain ethical behavior, stronger collaborations, and a homogeneous strategic focus across their transnational operations. This is consistent with the case of British Petroleum presented by Mobus (2012), in which the company sees safety and continuous improvement in their operations as key factors in their CSR profile and in accordance with its corporate culture. The findings also show that scholars see CSR as a relevant aspect with regards to maintaining and transmitting corporate values in the cases of mergers and acquisitions. In this sense, Syrjälä and Takala (2009) presented the case of Vatenfall, a Swedish state-owned energy company, and its operations in Finland which included several acquisitions and mergers in the early 2000s. In their study, Syrjälä and Takala (2009) argued that corporate values and corporate operating principles became positive driving forces in the years after the merger and concluded that the transmission of corporate culture and values, reinforced with the CSR of the company, can become key factors for successful operations. Notably, a second article focused on Vatenfall as a unit of analysis. In this case, Trapp (2012) emphasized that a convincing reason for companies to engage in CSR is to include broader and more complex global issues in their corporate profile, exemplifying this by exploring Vatenfall’s efforts to make climate change adaptation and mitigation part of its CSR profile and to include it as part of its corporate culture and values. Cost savings and profitability The analysis reveals that one article highlights cost savings as a motivation for engaging in CSR while four refer to profitability, a term that scholars also call improved financial performance. With regards to cost savings, Sepulveda and Mendizabal (2011) indicated that companies that adapt their CSR strategies to take into consideration the effects of climate change in their operations will benefit from cost savings directly linked to the risks that will be avoided. With regards to profitability, the review reveals that several scholars identify it as a motivation for energy companies to engage in CSR. In a comparison between energy companies in the USA 22

and Russia, Bashtovaya (2014) found that in both cases long-term business success is a strong motivation for CSR engagement and pointed out that in the case of Russian energy companies profit maximization is a key driver. In a similar way, Bracco (2015) explained that responsible behavior has often had a positive influence on company profitability, and hence it can be considered as a strong motivation for energy companies to engage in CSR. Ekatah et al. (2011) took a closer look at the link between CSR implementation and profitability with a case study of Royal Dutch Shell and concluded that there is a positive and statistically significant relationship between financial performance and CSR engagement. Ekatah et al. (2011) indicated that an increase of revenue of Royal Dutch Shell can be attributed directly to the implementation of CSR. Notably, in a similar study by Pätäri, Arminen, Tuppura, and Jantunen (2014), the analysis focused on the financial performance of 14 energy companies in the USA between the years 1991 and 2009, and their results indicate that CSR implementation had a differing influence on the company’s financial performance. As a consequence, it was not possible to attribute a positive and statistically significant relationship between financial performance and CSR engagement. Environmental performance and climate change adaptation and mitigation The analysis reveals that 13 publications mention environmental performance and climate change adaptation and mitigation as relevant motivations for energy companies to adopt CSR. With the publication “Sustainable oil and profitable wind”, Hoffmann and Kristensen (2017) presented a case study in which two energy companies explicitly assume environmental responsibilities within their CSR strategies. In the case of Royal Dutch Shell, Hoffmann and Kristensen (2017) indicated that the company sees its current responsible behavior as a way of addressing future energy demands, while in the case of Vestas, the findings suggest a resource based strategy focused on wind energy which had the aim of providing a competitive edge. These findings are consistent with the case of OMV presented by Özcüre et al. (2015), who explained that a company’s understanding of responsible behavior places its environmental performance and energy efficiency as key strategic factors underpinning their business success. Mezher, Tabbara, and Al
implementation of strategic CSR. Their findings indicate that the company placed its environmental responsibilities as part of its core business strategies and saw its environmental commitments as a key aspect in its operations. Trapp (2012) found a similar approach to environmental responsibilities in Vatenfall’s CSR and suggests that environmental protection became the main driver behind Vatenfall’s CSR policies during late 2000’s when the company led a campaign for climate change mitigation. Similarly, Bhattacharyya (2007) presented a case study of CSR in the National Hydroelectric Power Corporation of India and the author’s findings suggest that the company sees the supply of clean energy as part of its key strategic social responsibilities. Bhattacharyya’s (2007) findings indicate that CSR is the basis of the company’s projects and that this reflects its aim of addressing the environmental and social impacts of its operations. Siano, Conte, Amabile, Vollero, and Piciocchi (2016) explained that a key driver for energy companies to look into the adoption of CSR is as an effective way of communicating their environmental commitments to their stakeholders. In a similar manner, Du and Vieira (2012) pointed out the cases of Valero Energy and Marathon Oil as two energy companies with strategic CSR that reflect their environmental commitments as part of their aim to create long-term shared value. Furthermore, the findings presented by Du and Vieira (2012) suggest that addressing environmental concerns through a CSR approach is particularly sought by energy companies in controversial industries. This is consistent with the findings of Cook, Sarver, and Krometis (2015), Kuo and Chen (2013), Oh et al. (2017), and Roeck and Delobbe (2012), all of whom suggest that energy companies in controversial or environmentally-sensitive industries find value in their environmental actions by minimizing the environmental burden of their operations and legitimizing their activities as an environmentally and socially responsible corporation through the adoption of CSR. Liu et al. (2014) present similar findings in their study of CSR adoption by three Chinese oil companies. In particular, Liu et al. (2014) found that one of the strongest drivers behind the adoption of CSR for Chinese oil firms was to ensure that their environmental performance complied with international and local environmental regulations as a way of ensuring the competitiveness of their operations around the world. 24

In the publication “Business in climate or climate in business”, Sepulveda and Mendizabal (2011) analyzed the effects of climate change in several sectors of the Spanish economy, one of them being the energy sector, and explained that companies with CSR that can modify their strategies accordingly will be in a better position to take advantage of what they call “competitive climate intelligence” (p. 644). According to Sepulveda and Mendizabal (2011), the benefits behind this business strategy would come from new emerging markets and its derived products and services, as well as from cost savings from the risks avoided. Risk prevention and management The review of the articles reveals that scholars point out several types of risks such as those associated with financial liability, social impact, compliance of regulatory frameworks, corruption, and environmental impact, among others (see: Frynas, 2010; Hackett & Moffett, 2016; Wanvik, 2016). However, this section will only concentrate on the five publications that explicitly indicate risk prevention and risk management as drivers for CSR implementation. Lemke and Petersen (2013) analyzed reputational risks and risk management in several sectors and found that energy companies face additional reputational risks compared to companies in other sectors. The authors suggest that these risks represent a stronger influence on the energy sector due to the social sensitivity of energy operations. Lemke and Petersen (2013) further explored the way to manage risks and suggested CSR as a way to reduce direct risks for the company as well as risks related to the operations of the supply chain. Kuo and Chen (2013) presented a case study in which they indicated that Japanese energy companies seem to be improving their environmental practices as a way of updating their CSR profiles and achieving a competitive advantage. As Kuo and Chen (2013) explained, this approach can also be observed in energy companies that operate in environmentally-sensitive or controversial industries, such as oil, gas, and nuclear, which find value in improving their environmental performance by minimizing the environmental risks of their operations. Mobus (2012) presented a case study of CSR reporting of British Petroleum and focused on the role of CSR during an emergency in which an oil well blew and resulted in the leaking of approximately 4.9 million barrels of crude oil into the Gulf of Mexico. From the author’s findings, Mobus (2012) concluded that CSR played a relevant role in providing transparency and 25

engagement between the company and the broader social context in which British Petroleum operated during the risk management stage after the emergency. Another reason why scholars highlight CSR as a way of reducing risks can be clearly observed in the study by Pegg (2012) of CSR in three Chinese oil companies. With the global expansion of their operations, the three Chinese oil companies embraced CSR for several reasons, one of the most relevant being the reduction of risks in their international operations, in particular in Africa (Pegg, 2012). In this sense, Pegg (2012) pointed out that Chinese companies understood the value of CSR as a result of several incidents, such as the kidnapping and murder of Chinese oil workers in Niger and Ethiopia, as well as anti-Chinese riots in Zambia. Another approach is provided by Sepulveda and Mendizabal (2011), who explored the benefits of responsible corporate behavior by contextualizing risk prevention considering the expected impacts of climate change in Spain. The authors indicated that companies that understand risk prevention as a key aspect in their CSR profile will have a stronger competitive edge and resilience. 3.2.3 Connecting Drivers Based on Lozano’s work (2015), the connecting drivers for engaging in CSR are those that can be observed when the company is considered a semi-open system. In this case, the connecting drivers are understood as those that link and establish relations between internal processes and external stakeholders. With this in mind, the analysis of the literature revealed three connecting drivers: branding and reputation, reporting, and social license to operate. Branding and reputation The analysis reveals that seven publications highlight branding and reputation as relevant factors behind CSR implementation, with two different approaches: 1) when CSR plays a relevant role in the company’s branding and positioning in global indexes, and; 2) when CSR becomes for a feature of the company’s long-term reputation. The research by Bolton et al. (2011), Hoffmann and Kristensen (2017), and Mezher, Tabbara, and Hosani (2010) suggests that CSR plays a significant role in the branding and positioning of energy companies in global indexes. Bolton et al. (2011) indicated that leading companies can 26

use their CSR reputation and positioning in indexes such as The Sunday Times’ and Fortune’s ‘‘100 Best Companies to Work For,’’ as well as The Financial Times’ and Forbes’ “World’s Most Respected Companies”, as a way of motivating employees and attracting talented recruits. Lemke and Petersen (2013) pointed out “Who’s who” surveys, such as Fortune’s reports on reputation, as a way for companies to gain a global recognition with immediate benefits, such as the attraction of capital and investors, aid in closing contracts, and by influencing consumer behavior. This is consistent with the findings of Aguilera-Caracuel et al. (2017), Oh et al. (2017), and Sparkes (2014), which indicated that energy companies see the potential for CSR to create a positive image and improve long-term reputation, which can result in attracting investors and improving relations with economic stakeholders. Reporting and disclosure The review reveals that twenty-four publications placed a high level of attention on CSR reporting and on the disclosure of responsible behavior as motivations for energy companies to engage in CSR. This can be clearly observed in the publications by Aguilera-Caracuel et al. (2017), Boehm, Brei, and Dabhi (2015) and Leitoniene and Sapkauskiene (2015), who indicate that the growing interest in the responsible behavior of companies has driven them to adopt better ways of reporting their CSR practices, in particular with regards to their social and environmental performance. This is consistent with the study presented by Jindrichovska and Purcarea (2011) that suggests that CSR reporting helps energy companies improve their decisionmaking process by assessing economic, environmental, and social impacts, while it also serves as a means of providing information to external stakeholders. The findings of Du and Vieira (2012), Siano et al. (2016), Szczepankiewicz and Mucko (2016) and Tenca (2018) suggest that CSR reporting and disclosure can be a key strategic element for the long-term success of energy companies and that it has to be carefully designed to take into consideration aspects such as the variety of communication channels, credibility, and availability to all stakeholders. Siano et al. (2016) further emphasized the relevance of the

27

credibility of reporting and disclosure of information in order to avoid falling into greenwashing3 activities. This is explained in further detail by Dilling and Harris (2018) who suggest that international initiatives for CSR reporting, such as the Global Reporting Initiative (GRI), as well as mandatory disclosure of information, such as the European Directive 2014/95/EU on disclosure of nonfinancial and diversity information, motivate energy companies to adopt CSR. Notably, Dong and Xu (2016), Feng et al. (2018) and Liu et al. (2014) found similar results for the Chinese context, in which energy companies were motivated to engage in CSR by mandatory and voluntary reporting initiatives set by the government, while Kuo and Chen (2013) identified similar incentives in the Japanese energy sector. Lähtinen and Myllyviita (2015) indicated that Finnish energy companies involved in the forestry industry see CSR reporting as a strategic element to secure a reputational status within a highly competitive market environment. Mobus (2012) also found a strategic element to reporting by indicating that CSR reporting and timely disclosure of information were key elements in providing transparency, helping to contain any possible damages to the reputation of British Petroleum after an oil well explosion in the Gulf of Mexico. The strategic element of reporting can also be observed in an interview presented by Bolton et al. (2011) in which the interviewee, the country chairman of the energy company of their case study (unspecified), indicated that their company cannot be sustainable unless it successfully reports its responsible behavior to its stakeholders. In this sense, Arena et al. (2018) and Liew, Adhitya, and Srinivasan (2014) suggest that energy companies engage in CSR reporting in order to attract social responsible investors, with the aim of presenting a mixture of qualitative and quantitative information to their other stakeholders, facilitating transparency and accountability. Choumert Nkolo (2018) pointed out the relevance of CSR reporting by indicating that properly informing and reporting to communities has to be a top priority for gas companies that want to have a positive impact in the localities where they operate. For Dilling (2016),

3

Bazillier and Vauday (2009) explore the concept of greenwashing as a way for companies to advertise their

CSR activities, whether they are credible or not.

28

communication and disclosure of information is particularly relevant for the CSR agenda of energy companies that operate in isolated communities, often areas with poor access to mass communication media. This assists with avoiding a gap between the expectations and the actual impact of their activities. Frynas (2010), Grougiou, Dedoulis, and Leventis (2016), and Kuo and Chen (2013), explained that energy companies operating in controversial industries face constant pressure to report their activities in a transparent and credible way, which can become relevant reasons for them to engage in CSR. In particular, Frynas (2010), and Hackett and Moffett (2016), pointed out the case of the Extractive Industry’s Transparency Initiative (EITI) as a significant approach that can motivate energy companies to engage in CSR reporting. Notably, Kuo and Chen (2013) and Oh et al. (2017) further explained that energy companies in controversial industries have greater motivations to disclose their information after they have adequately improved their performance and suggest that reporting can be a significant reason for the adoption of CSR. Social license to operate Fourteen publications indicated that achieving and maintaining the social license to operate is a significant motivation for energy companies to engage in CSR. Bolton et al. (2011) explained that the energy sector faces a high level of social scrutiny with regards to its operations, which makes it essential for energy companies to gain and maintain their social license to operate4. This is consistent with the findings of Curran (2017), Dilling (2016), Du and Vieira (2012), Grougiou et al. (2016), Hoffmann and Kristensen (2017), and Loe and Kelman (2016). Their findings suggest that energy companies that operate in controversial industries, such as mining, nuclear, oil and gas, understand CSR as an approach for managing higher social expectations and maintaining their legitimacy in a highly competitive environment where the social license to operate is directly linked to the success of the firm. Oh et al. (2017) and Roeck and Delobbe (2012) further explored the topic and found that energy companies in controversial industries are

4

Heffron, Downes, Ramirez Rodriguez, and McCauley (2018) defined the social license to operate for energy

companies as “an unwritten agreement between the company and communities (or stakeholders) in which societal support is required to enable the company's legally-granted operations” (p. 1).

29

more likely to take stronger actions with regards to their CSR commitments, aiming to legitimize their core business activities. Mazur (2015) analyzed the Polish context and concluded that CSR can be a strategic element for companies to improve their legitimacy. In a similar vein, Benites-Lazaro et al. (2018) analyzed the case of the sugarcane ethanol energy industry in Brazil and found that companies have adopted CSR as a way of improving their social license to operate in an industry faced with severe criticism to its poor labor conditions and environmental performance. Choumert Nkolo (2018) arrived to similar conclusions in the case of the energy sector in Tanzania and indicated that energy companies that implement CSR would be in a better position to improve their social license to operate. Similarly, Dong and Xu (2016) concluded that Chinese energy companies understand CSR as a way of improving their legitimacy and survival prospects in a society with higher expectations and a country with new and more stringent regulations. Kuo and Chen (2013) found that Japanese energy companies began using CSR as a strategic way for improving their social license to operate, with a particular focus on their environmental image and social acceptance and with the ultimate goal of having a competitive advantage. 3.2.4 External Drivers Based on Lozano’s work (2015), the external drivers for adopting CSR can be understood as those concerned with the company’s relations with external stakeholders. With this in mind, the analysis of the literature revealed four external drivers: competitiveness, legislative and regulatory frameworks, social commitments and engagement, and stakeholder engagement and satisfaction. The drivers are presented in alphabetical order which does not represent any type of order of preference. Competitiveness The analysis of the literature reveals that six publications specifically point out improved competitiveness as a motivation for energy companies to engage in CSR. Aguilera-Caracuel et al. (2017) indicated that multinational companies understand CSR as a strategic framework that can help achieve competitive advantages through clear differentiation from their competitors. 30

Likewise, Szczepankiewicz and Mucko (2016) pointed out that the adoption of CSR is mainly driven by the aim of competitive differentiation that responds to consumers who are sensitive to the social dimension of corporate behavior. Dong and Xu (2016) and Liu et al. (2014) found similar results in Chinese energy companies, which see CSR as a way of differentiating themselves and ensuring their international competitiveness. Syrjälä and Takala (2009) analyzed the case of CSR in Vatenfall and their findings indicate that the company sees competitiveness as a key element of their strategy, which can be clearly observed in its annual reports where the company explicitly link it to responsible behavior. In particular, Syrjälä and Takala (2009) pointed out that Vatenfall’s vision for its international operations in Finland was to become the country’s “most attractive and cost-effective energy company” (p. 270), and suggest that this vision integrates key aspects of responsible behavior, such as responsible and ethical work standards, openness, and appreciation of diversity. Sepulveda and Mendizabal (2011) indicated that those companies adopting CSR that are able to understand the potential effects of climate change and adapt their strategies accordingly will have a stronger competitive advantage by benefiting from new emerging markets, new products or services, cost savings, and risk prevention. Legislative and regulatory frameworks From the review, 14 publications highlight the compliance of legislative and regulatory frameworks as a significant motivation for energy companies to adopt CSR. The studies by Bashtovaya (2014), Hackett and Moffett (2016), Mobus (2012), and Ngoasong (2014) suggest that regulations can be considered as relevant drivers for CSR implementation. More specifically, Dilling and Harris (2018) indicated that legal requirements on CSR reporting as well as CSRrelated regulations, such as the European Directive 2014/95/EU on disclosure of non-financial information, are relevant motivations for energy companies to adopt CSR. Accordingly, Dilling (2016), and Dilling and Harris (2018), draw on the cases of Denmark, France, Germany, and Canada, in which regulatory requirements on CSR reporting have motivated energy companies to adopt CSR practices. It is possible to see similar findings in the articles by Dong and Xu (2016), Liu et al. (2014), and Feng et al. (2018), which suggest that explicit CSR regulations have resulted in the rapid 31

integration of CSR in the energy sector in China, while Pegg (2012) suggests a similar response of Chinese energy companies when operating abroad. Similarly, Jindrichovska and Purcarea (2011) explored the case of energy companies in Romania and Czech Republic, and their outcomes indicate that new environmental regulations can become relevant drivers for the adoption of CSR. The results of Aguilera-Caracuel et al. (2017) suggest that multinational companies that undertake CSR strategies can achieve greater benefits from their responsible behavior when complying with regulatory frameworks, such as taking part in the design of national and international regulations, establishing trust-based relationships with the government, and improving the perceptions of consumers and stakeholders. A relevant example comes from the case study by Arena et al. (2018) that suggests that the large multinational energy company of analysis (unspecified) benefited from its CSR by investing in renewable energies as a strategic decision that anticipated presumably new and more stringent regulatory requirements. Another approach to regulations is presented by Grougiou et al. (2016), who found that energy companies which are stigmatized by society as sinful tend to adopt CSR as a way of minimizing risks related to the non-compliance of regulations and as a tactic to avoid lawsuits. Social commitments and engagement While several scholars pointed out cases in which energy companies acknowledge having broader responsibilities towards society (see: Midttun et al., 2007; Ngoasong, 2014; Pegg, 2012), only eight publications clearly identified social commitments and social engagement as relevant drivers behind the adoption of CSR. In their research, Bashtovaya (2014) and Bhattacharyya (2007) indicated that energy companies see a link between long-term success and their role in society, which inevitably requires them to demonstrate responsible corporate behavior within the company’s operations and planning. The research by Heard et al. (2017), Mezher, Tabbara, and Hosani (2010), Sparkes (2014), Wanvik (2016), and Wilson (2016), suggests that a relevant motivation for energy companies to adopt CSR are the potential benefits sourced from delivering social reconciliation and cultivating social engagement. Heard et al. (2017) indicated that aboriginal Reconciliation Action Plans in Australia perceive responsible corporate behavior as a key element in their success. Similar 32

observations are presented by Wanvik (2016) in the case of consultation mechanisms in Canada, such as Environmental Impact Assessments and locally negotiated Impact and Benefit Agreements. This was also mentioned by Wilson (2016) in the case of Strategic Environmental Impact Assessments and Social Impact Assessments for the Greenlandic extractive industries, and by Short, Elliot, Norder, Lloyd-Davies, and Morley (2015), who indicated an urgent need for including independently-conducted human rights’ impact assessments for the fracking industry, which can translate into a positive influence in corporate behavior. Furthermore, the findings presented by Heard et al. (2017), Wanvik (2016), and Wilson (2016), suggest that energy companies are expected to address broader social issues in the communities where they operate and that this kind of social engagement is expected to be a component of the company’s CSR strategy and actions. With a different approach, Mezher, Tabbara, and Hosani (2010) analyzed the company Masdar and found that its CSR framework makes it act in a proactive and innovative manner instead of having a reactive approach to the resolution of social concerns, and concluded that Masdar understands its CSR approach as a way of contributing to the social welfare of the region and sustaining this in the long-term. Similarly, Sparkes (2014) analyzed the social impact of CSR in the case of the Theun-Hinboun Power Company (THPC) in Lao People’s Democratic Republic. The author’s findings suggest that the company’s CSR policies were influenced by Statkraft, a Norwegian state-owned hydropower energy company that owns 20% of THPC, and that such policies were motivated by an interest in addressing social concerns in the local communities such as water quality, sanitation and hygiene, prevention of human trafficking and prostitution, awareness with regards to sexually transmitted diseases, and basic education. Accordingly, Sparkes (2014) suggests that THPC sees this proactive and preventive approach as a key element in its CSR profile, as well as a core component of the long-term success of its hydropower development projects in the country. Stakeholder engagement and satisfaction The analysis of the literature shows that eighteen publications identify stakeholder engagement and satisfaction as significant drivers for energy companies to engage in CSR. The findings of Aguilera-Caracuel et al. (2017), Arena et al. (2018), Boehm et al. (2015), Lloyd (2018) and 33

Sparkes (2014) suggest that stakeholder management drives companies to engage in CSR as a long-term strategy for attending the demands and expectations of their stakeholders. In this sense, Arena et al. (2018) found that stakeholder management plays a significant role in decisionmaking within an energy company’s CSR and pointed out that a firm has to engage successfully with as many stakeholders as possible in order to be successful. Grougiou et al. (2016), Hackett and Moffett (2016), and Jonek-Kowalska (2018) pointed out that energy companies operating in controversial industries often use CSR as a way of establishing dialogue and consultation with their stakeholders, which can help minimize the negative stigma towards a company. This can be clearly observed in the case study of the Brazilian sugarcane ethanol industry presented by Benites-Lazaro et al. (2018), which shows an industry where stigmatized energy companies adopted CSR as a means of managing and satisfying stakeholder and overall societal expectations. This can also be observed in the study by Heard et al. (2017) that analyzed the way in which Australian companies incorporated indigenous reconciliation in their CSR activities, with the aim of building better relations. Heard et al. (2017) highlighted the relevance of incorporating the information gathered from stakeholder engagement into the company’s strategies, and mentioned that in their case study a successful engagement with the community resulted in expanded cultural awareness across the company that was “identified as being highly beneficial both to indigenous and non-indigenous employees” (p. 19). In a similar way, Wilson (2016) found that the Greenlandic energy sector has benefited from stakeholder management, which has been achieved through a CSR approach that accounted for traditional Inuit values. Choumert Nkolo (2018) arrived at similar conclusions for the Tanzanian energy sector and indicated that it is crucial for gas companies to include stakeholder engagement as part of their CSR activities. The findings of Du and Vieira (2012) and Fry and Brannstrom (2017) suggest similar conclusions, indicating that oil companies that wish to minimize their negative environmental and social impacts can benefit from CSR by having in-depth engagement with their key stakeholders through open and transparent processes. This belief can also be observed in the publication by Bhattacharyya (2007). This study depicts an energy company in India that undertakes its stakeholder engagement in a proactive 34

manner based on the belief that CSR should have a positive impact on society. Bolton et al. (2011) and Özcüre et al. (2015) reported similar behavior in the energy companies of each of their case studies for which stakeholder management and satisfaction became a strategic aspect of their CSR. A different approach is presented by Skagerlind, Westman, and Berglund (2015), who analyzed cross-sector partnerships as a way of achieving CSR objectives. The authors found that stakeholder engagement through partnerships can lead to capacity building of the company’s partners in the civil society, which will ultimately lead towards the long-term sustainability of the firm’s operations. 4. Discussion The objective of this paper was to identify and categorize the drivers that motivate energy companies to engage in CSR, which was fulfilled through a systematic literature review. The analysis reveals that scholars understand the drivers in such a way that they can be categorized in accordance with Lozano’s (2015) rationale as internal, connecting and external drivers.. The review identified five internal drivers, three connecting drivers, and four external drivers (see table 5 and figure 6). This allowed to propose a model (figure 6) that aims to depict the diversity of CSR drivers that motivate energy companies to engage in CSR. Table 5. Internal, connecting and external drivers found in the literature

Internal driver

Number of studies

Connecting driver

Number of studies

External driver

Number of studies

Business strategy

4

Branding, reputation and repositioning

7

Competitiveness

6

Corporate culture

14

Reporting

24

4

Social license to operate

13

Cost savings and profitability Environmental commitments and climate change adaptation and mitigation Risk prevention and management

13

Legislative and regulatory frameworks Social commitments and engagement Stakeholder engagement and satisfaction

14 8

18

5

35

Figure 6. Synthesis of the drivers behind responsible behavior in the energy sector Created by the authors

The analysis reveals that energy companies are driven towards responsible behavior by internal, connecting and external motivations and that such stimuli can be of responsive or proactive character. The findings suggest that all the drivers can be of either responsive or proactive nature depending on the specific case of the company and its approach to such incentives. The responsive approach can be clearly observed in the case of Chinese companies, as discussed in the studies by Liu et al. (2014), Pegg (2012), and Dong and Xu (2016), and in the case of Japanese companies as outlined by Kuo and Chen (2013), where they respond to: 1) internal motivations such as risk prevention; 2) to connecting drivers such as branding and reputation and as a way for maintaining and improving their environmental image in an international context, and; 3) to external stimuli such as regulatory frameworks and industry standards which create additional pressure on the search for competitiveness. Perhaps the clearest example of the responsive approach to CSR is presented by Pegg (2012), who explained that Chinese energy companies understood the value of CSR from an internal perspective looking at risk prevention and management (internal drivers) as a result of several incidents, such as the kidnapping and murder of Chinese oil workers in Niger and Ethiopia correspondingly, as well as anti-Chinese riots in Zambia. This kind of responsive approach to CSR seems to correspond also to energy companies that operate in controversial industries such as nuclear, mining, oil and gas as explained in the publications of Cook et al. (2015), Du and 36

Vieira (2012), Frynas (2010), Grougiou et al. (2016), Hoffmann and Kristensen (2017), Kuo and Chen (2013), Loe and Kelman (2016), Oh et al. (2017), and Roeck and Delobbe (2012), from which it can be observed that energy companies seem to pay a particular interest in using CSR for branding, reputation-building, reporting and to maintain their social license to operate (connecting drivers), as well as a way of conducting stakeholder engagement (external driver). Even when the proactive use of CSR is not entirely evident across the literature, there are several publications that point out cases in which energy companies used CSR to achieve their social responsibilities in a proactive rather than a responsive way. A relevant example is the case of the publication by Mezher, Tabbara, and Al
37

that will improve the firm’s social license to operate (connecting drivers), or by the desire of achieving a competitive edge (external driver). The findings of the review suggest that energy companies respond to different motivations according to their own understanding of their social responsibilities. From the review, it would seem that while some energy companies assume proactive roles based on their understanding of CSR, most of them assume responsive attitudes that answer to specific motivations (e.g. regulatory frameworks, stakeholder expectations, branding, and reporting). Even when the responsive or proactive approach to CSR does not necessarily reflect the overall performance of an energy company, a proactive approach to CSR can be a signal that shows a concrete alignment between the company’s beliefs and its core operations, which can provide a higher level of credibility concerning its approach to CSR. Alternatively, the responsive approach to CSR can be a sign of companies that are reacting to external pressures and do not necessarily have a complete understanding or a holistic implementation of CSR, which can lead to the limited use of CSR as a positioning and branding tool, or simply as a green reporting activity. In any case, the findings suggest that the internal, connecting or external drivers to engage in CSR can be addressed by energy companies through a responsive or a proactive approach according to their own understanding of their social responsibilities and their role in society. 5. Opportunities for future research

The academic interest in studying CSR in the energy sector has grown since the late 2000s and has been particularly high since 2015 (see figure 2). The growth seems to correspond with the increasing role of CSR globally despite other competing concepts, as explained by Carroll (2015). Notably, Carroll (2015) expects the probable future of CSR to involve an increase in aspects such as stakeholder engagement and participation, higher prevalence and power of ethically driven consumers, CSR being brought forward and driven by employees, and an increased awareness of CSR in the global supply chain. The scenario presented by Carroll (2015), along with the current context of the SDGs, the energy transformation set out by IRENA (2019), and the findings of this SLR, show that there is a need for studying and understanding what drives energy companies towards responsible business practices, in particular towards CSR.

38

The findings show that most of the focus of the academic publications to date has revolved around industries linked to fossil fuels, and there have been only a few studies focusing on renewable sources of energy (see table 3), meaning that these industries represent a relevant area for future research. The findings also reveal that there are many geographical areas of study that have not been analyzed (see figure 4). Future research could consider the unattended geographical areas of study reported by this SLR and contextualize them in the current context of the energy sector. Another key area that seems to be missing in the literature is the understanding of the role of CSR in the adoption and adaptation of the latest technological advances in the energy sector. New digitalization processes and tools, the integration of artificial intelligence in business environments, and the use of big data in the energy sector, are aspects that need to be incorporated into business frameworks. Furthermore, more research needs to be conducted on how such advances occur alongside the adoption of a holistic and overarching perspective centered on the notions of sustainability and CSR. The review suggests that the drivers behind CSR implementation in the energy sector have mostly been studied separately. This means that each driver has been analyzed as an individual motivation without considering the interconnection between them. This represents an area of opportunity for future research that analyzes the drivers in a comprehensive manner and evaluates the interrelation between them. Beyond that, the categorization of drivers as internal, connecting and external can provide the basis for future studies that aim to understand what motivates companies to be responsible. The categorization of the drivers proposed by this paper opens room for management studies that aim to look for a balance between the internal and external stimuli that results in responsible corporate behavior. The responsive and proactive approach to CSR by energy companies is a topic that has not been covered by the literature and as a result it represents an innovative topic of study that can help understand the motivations behind CSR engagement. Finally, a deeper analysis of the link between attending social expectations and the fulfillment of strategic business objectives in the energy sector is another opportunity for future research that can be of interest for management studies. Limitations

39

This review was limited to academic papers within a timeframe between 1990 and 2018. The selection of the publications was limited to four scientific databases and followed a specific selection criteria. The review was also limited to academic literature focused on CSR for the energy sector, which left out of the analysis publications on other topics that might be related to responsible corporate behavior in the energy sector (e.g. corporate sustainability, corporate social performance, creation of shared value, corporate citizenship). These limitations leave room for future research that looks into other sources of information within the academic literature, as well as other primary sources of information, such as analyzing how energy companies implement CSR. 6. Conclusions Academic implications

The contributions of this paper to the literature begin by providing a broad systematic review of the academic publications on the topic, which can be used by researchers as a starting point for reviewing existing studies. Another relevant contribution comes from filling a gap in the literature by identifying the different drivers that motivate energy companies to implement CSR. A key contribution comes from the categorization of the drivers as internal, connecting, and external (figure 6). Furthermore, the way in which this paper synthesizes the literature can be used as a guide for future research by pointing out publications according to specific drivers. Accordingly, the review shows that most of the publications focused on individual drivers for CSR in the energy sector, but none provided a comprehensive overview of all the drivers. This suggests a research gap and an opportunity for future research with regards to the overall motivations that drive energy companies to implement CSR. Practical and managerial implications

A key contribution from this paper comes from showing that energy companies take different approaches to their responsible business practices, either with a responsive or a proactive approach. This too generates opportunities for future research in relation to building understanding of what drives energy companies towards responsible behavior. The findings suggest that in the case of energy companies there seems to be a link between attending social

40

expectations and the fulfillment of strategic business objectives, which can also be a future research line. The practical contributions of this paper derive from the discussion section which suggests that energy companies can have a responsive or proactive approach to CSR. Beyond that, the contributions of this paper provide an understanding of what drives energy companies towards responsible business practices, whether in a responsive or a proactive way, which can translate into positive implications for the energy sector in terms of policy making, governance, legislation and regulation, and innovative business frameworks. The main contributions of this paper to the energy sector are threefold: 1) Although a series of scholars have analyzed the drivers for energy companies to implement CSR, they have mainly done so by evaluating each one separately and it seems that only Stjepcevic and Siksnelyte (2017) have provided an overview of the drivers that considers the interrelation between them. This study goes beyond and provides a comprehensive overview of the drivers that takes a close look into each one; 2) As discussed in the review, energy companies are faced by a diversity of motivations that affect their decision-making process. This represents a relevant challenge for managers who need to balance the internal, connecting and external drivers in order to remain competitive and address society’s expectations. This paper proposes a model of CSR drivers which considers internal, connecting and external motivations and offers a holistic perspective that can be of value for managers of energy companies who wish to understand the interconnection between the drivers and for corporations that want to be more proactive and become more sustainable through a CSR approach. 3) Identifying that energy companies can have a responsive or a proactive approach to CSR offers a unique understanding of its implementation that centers the attention on the company’s approach to CSR which can be used as the basis for exploring how CSR can be used with a proactive perspective in the energy sector, a topic that has received a limited attention in the literature.

41

Appendix Table 1. Search strings applied to the four databases Search result

Selected articles (excluding duplicates)

21

9

14

6

ProQuest Search String 1:

ANYWHERE EXCEPT FULL TEXT ("CSR"AND"energy"AND"industry"); Sources type (Books, dissertations & thesis, government & official publications, reports, scholarly journals and trade journals); Document type (Annual report, article, book, book chapter, business case, business plan, case study, dissertation/thesis, general information, government & official document, industry report, report, statistics/data report and technical report); Language (English); pub date > 1 January 1990; peer reviewed

174

22

ProQuest Search String 2:

ANYWHERE EXCEPT FULL TEXT ("CSR"AND"energy"AND"sector"); Sources type (Books, dissertations & thesis, government & official publications, reports, scholarly journals and trade journals); Document type (Annual report, article, book, book chapter, business case, business plan, case study, dissertation/thesis, general information, government & official document, industry report, report, statistics/data report and technical report); Language (English); pub date > 1 January 1990; peer reviewed

118

8

99

12

59

2

99

8

67

1

651

68

Database

Search string

Science Direct Search String 1: Science Direct Search String 2:

TITLE-ABSTR-KEY ("CSR"AND"energy"AND"industry"); Sources (Research articles, book chapters and data articles); pub date > 1990 TITLE-ABSTR-KEY ("CSR"AND"energy"AND"sector"); Sources (Research articles, book chapters and data articles); pub date > 1990

Web of Science Search String 1: Web of Science Search String 2: Scopus Search String 1: Scopus Search String 2:

TOPIC ("CSR"AND"energy"AND"industry"); ALL Databases; Language (English); Timespan (1990 to 2018); Auto-suggest publication names (on) TOPIC ("CSR"AND"energy"AND"sector"); ALL Databases; Language (English); Timespan (1990 to 2018); Auto-suggest publication names (on) TITLE-ABSTR-KEY ("CSR"AND"energy"AND"industry"); Date Range (1990 to Present = 06 August 2018); Document type (Article, book chapter and book); Access type (ALL) TITLE-ABSTR-KEY ("CSR"AND"energy"AND"sector"); Date Range (1990 to Present = 06 August 2018); Document type (Article, book chapter and book); Access type (ALL) Total

Note: The search was conducted the 6th of August, 2018.

Table 2. Selected articles Author (year) Aguilera-Caracuel, Guerrero-Villegas, & García-Sánchez (2017) Arena, Azzone, & Mapelli (2018)

Bashtovaya (2014)

Benites-Lazaro, Giatti, & Giarolla (2018)

Bhattacharyy (2007)

Title

Topic

Type of study

Theoretical approach

Industry of analysis

Company reputation

Empirical

Stakeholder theory

Energy sector in general

Links CSR implementation to a positive reputation and public image for multinational companies.

CSR strategies

Case study including interviews

Institutional perspective

Thermoelectric, natural gas, renewables and nuclear

Concludes that CSR strategies respond to institutional logics (market, state, community, and professional).

Social Responsibility Journal

CSR reports

Content Analysis

Institutional perspective

Oil and gas

Concludes that there are relevant differences in corporate approach to CSR in the energy sector according to the institutional context in which the company operates.

Journal of Cleaner Production

CSR reports and CSRrelated publications

Themes/Topics analysis with the use of modeling algorithms with text mining

Private governance and private regulation

Sugarcane ethanol, bioelectricity and secondgeneration biofuel

Identified the 36 main topics/themes found in CSR reports of the Brazilian sugarcane ethanol industry.

Vision

CSR policies

Case study

CSR management

Hydroelectric

Links the leadership adoption of CSR policies to identifiable and measurable activities with social impact.

CSR policies

Case study

Historical case analysis complemented with a commodity chain analysis

Nuclear, coal, and renewables

Shows the use of a clean development mechanism as a "greenwashing" activity aimed at legitimizing the company's sustainability efforts.

CSR policies / Participation of employees in CSR

Case study

Stakeholder theory

Oil, gas, renewables and hydrogen

Establishes employees as one of the most relevant stakeholders and as a key element for CSR success.

Journal

European Reputation of multinational Journal of companies. Corporate Social Management Responsibility and and Business internationalization Economics What drives the evolution of Corporate Social Journal of Responsibility Cleaner strategies? An institutional Production logics perspective CSR reporting in the United States and Russia Sustainability and governance of sugarcane ethanol companies in Brazil: Topic modeling analysis of CSR reporting Chamera Hydro-Electric Power Project (CHEP-1), Khairi: Looking Beyond the Horizon of Hydroelectricity and Profit, Giving New Meaning to Life

Boehm, Brei, & Dabhi (2015)

EDF Energy's green CSR claims examined: the follies of global carbon commodity chains.

Bolton, Kim, & O'Gorman (2011)

Corporate Social Journal of Responsibility as a Dynamic Business Internal Organizational Ethics Process: A Case Study.

Global Networks

Most significant contribution

43

Author (year)

Title

Bracco (2015)

Effectiveness of EU biofuels sustainability criteria in the context of land acquisitions in Africa

Choumert Nkolo (2018)

Cook, Sarver, & Krometis (2015)

Curran (2017)

Dilling & Harris (2018)

Dilling (2016)

Developing a socially inclusive and sustainable natural gas sector in Tanzania Putting Corporate Social Responsibility to Work in Mining Communities: Exploring Community Needs for Central Appalachian Wastewater Treatment Social license, corporate social responsibility and coal seam gas: framing the new political dynamics of contestation. Reporting on long-term value creation by Canadian companies: A longitudinal assessment Reporting on long-term value creation-The example of public Canadian energy and mining companies

Journal

Theoretical approach

Topic

Type of study

Renewable & Sustainable Energy Reviews

Influence of the EU Renewable Energy Directive on CSR practices

Case study complemented with econometric logistic regression

Sustainability criteria

Biofuel

Energy Policy

Community perception of the impact of the natural gas sector

Case study based on qualitative and quantitative field surveys and complemented with econometric analysis

Stakeholder theory (not explicit)

Natural gas

Determines the most relevant dimensions for successful community engagement activities.

Influence of CSR in community welfare

Case study

Stakeholder theory (not explicit)

Mining (particularly coal)

Determines that CSR in the mining sector can influence the improvement of community welfare.

Energy Policy

Social license to operate

Case study

Political analysis of the social license to operate

Sustainability

Company reports

Content Analysis

Legitimacy and signaling theories

Mining and Energy (not specific)

Shows that reporting of long-term value creation has increased in the companies that were analyzed.

Journal of Cleaner Production

Company reports

Content Analysis

Legitimacy and stakeholder theory

Mining and Energy (not specific)

Links specific company characteristics to the disclosure of information on long-term value creation.

Resources

Industry of analysis

Most significant contribution Determines the main factors in international large-scale land acquisitions that influence a European investor to implement CSR and/or sustainability certifications.

Shows a case in which the social license to Mining (particularly coal seam operate becomes the most relevant factor for the gas) operations of the company.

Dong & Xu (2016)

The impact of explicit CSR regulation: evidence from China's mining firms

Journal of Applied Accounting Research

Impact of CSR regulations

Content Analysis

Legitimacy and institutional theory

Coal mining and dressing, petroleum and natural gas, ferrous metal ore mining and non-metallic mineral mining

Shows a case in which CSR reporting and disclosure responds directly to a regulatory and governmental influence.

Du & Vieira (2012)

Striving for Legitimacy Through Corporate Social Responsibility: Insights from Oil Companies

Journal of Business Ethics

CSR strategies and communications

Case study

Legitimacy theory

Oil

Identifies different CSR-communication tactics and the specific motivations for using each one according to the characteristics of the company.

44

Author (year)

Topic

Type of study

Theoretical approach

Industry of analysis

Corporate Reputation Review

Annual sustainability reports

Case study based on content analysis

Profitability and financial performance

Oil, natural gas, alternative fuels and renewable energy (mainly eolic)

Sustainability

Key Performance Indicators and ownership distribution

Statistical analysis

Stakeholder and agency theories

Energy sector in general

Emergent patterns and processes in urban hydrocarbon governance

Energy Policy

Local scale governance processes

Qualitative analysis through Semi-structured interviews

Hydrocarbon governance and urban policy making

Oil and gas (focused on hydraulic fracturing and shale gas)

Corporate Social Responsibility and Societal Governance: Lessons from Transparency in the Oil and Gas Sector

Journal of Business Ethics

Revenue transparency

Qualitative analysis through interviews

Energy governance

Oil and gas

Corporate Social Journal of Responsibility Reporting Business and Organizational Stigma: Research The Case of “Sin” Industries

CSR reporting strategies

Quantitative analysis

Organizational stigma

Nuclear energy is analyzed as one of five controversial industries (alcohol, tobacco, gambling, firearms and nuclear energy)

The results suggest that stigmatized companies are more prone to report CSR activities and use CSR as a way to neutralize direct and indirect effects of litigation proceedings.

Mapping the public/privatelaw divide: a hybrid approach to corporate accountability

International and public/private laws

Energy -extraction sector

Provides a proposal for more efficient implementation of the Ruggie Principles (2011) with the aim of holding multinational corporations responsible for their actions, in particular with regards to violations of human rights.

Mining and Energy (not specific)

Highlights 5 key points for indigenous reconciliation in the context of the mining and energy sector in Australia: 1) flexibility and communication; 2) cultural awareness training delivered by indigenous people; 3) Staff training must include cultural sensitiveness activities; 4) indigenous engagement should be viewed as intrinsic part of the company's operations, and 5) a reconciliation strategy should be driven by

Title

The Relationship Between Ekatah, Samy, Corporate Social Bampton, & Halabi Responsibility and (2011) Profitability: The Case of Royal Dutch Shell Plc. The Impacts of Social Responsibility and Feng, Chen, & Ownership Structure on Tang Sustainable Financial (2018) Development of China's Energy Industry Fry & Brannstrom (2017)

Frynas (2010)

Grougiou, Dedoulis, & Leventis (2016)

Hackett & Moffett (2016)

Heard, Love, Sing, & Goerke (2017)

Learning to build relationships for a better Australia. Indigenous reconciliation in action in the construction and resource sectors

Journal

International Journal of Law in Context

Construction Innovation

CSR activities focused on indigenous reconciliation

Qualitative analysis

Case study based on surveys and interviews

Corporate accountability

Indigenous reconciliation

Most significant contribution

Found a positive relationship between CSR implementation and profitability. Found a positive relationship between CSR implementation and profitability and growth. Also, it shows that the social contribution value per share index as well as governmental CSRoriented requirements are drivers for CSR implementation. Identified the main factors that influence urban hydrocarbon governance and points out CSR as an opportunity for firms to balance their internal objectives along with the social and governmental goals. Highlights that corporate activities may undermine effective energy governance and points out that the CSR agenda does not take into consideration energy governance aspects. Also, it points out that transparency can result in positive effects for energy governance.

45

Author (year)

Title

Journal

Sustainable Oil and Profitable Wind: The communication of corporate responsibilities as inverted positioning

Nordicom Review

Jindrichovska & Purcarea (2011)

CSR and Environmental Reporting in the Czech Republic and Romania: Country Comparison of Rules and Practices

Accounting and Management Information Systems

Jonek-Kowalska (2018)

How do turbulent sectoral conditions sector influence the value of coal mining Resources enterprises? Perspectives Policy from the Central-Eastern Europe coal mining industry

Hoffmann & Kristensen (2017)

Topic

Type of study

Theoretical approach

Industry of analysis

CSR online reporting strategies

Case study with content analysis of company's websites

Inverted and competitive positioning

Oil, gas and wind

Motivations for CSR and environmental reporting

Qualitative analysis based on comparative case studies

CSR management and reporting

Coal mining as well as production and distribution of electricity

Value of mining enterprises

Quantitative analysis

Value management

Strategic legitimacy theory

Cultural sustainability and CSR reporting

Kuo & Chen (2013)

Is environmental disclosure an effective strategy on establishment of environmental legitimacy for organization?

Management Decision

Impact of CSR reporting on environmental legitimacy

Quantitative content analysis complemented with regression analysis based on the three-stage least-squares (3SLS) method

Lähtinen & Myllyviita (2015)

Cultural sustainability in reference to the global reporting initiative (GRI) guidelines. Case: forest bioenergy production in North Karelia, Finland

Journal of Cultural Heritage Management and Sustainable Development

Cultural sustainability indicators within CSR reports and within GRI guidelines

Qualitative analysis through a case study based on interviews

Most significant contribution senior management and implemented through all the organization. Their results show that in the case of the selected companies (Shell and Vestas), CSR communications are used as inverted positioning strategies that vary according to the aspiration of each. The authors argue that Shell's communications aim to invert public perceptions with regards to environmental and social responsibilities, while in the case of Vestas, the communications aim to invert the public perceptions regarding its economic responsibilities. The findings suggest that governmental initiatives as well as multinational companies are drivers for CSR reporting.

Based on the findings, the authors suggest to that coal mining companies can further develop the relations with internal and external stakeholders using CSR. The authors also Coal mining suggest that CSR should be used for improving the public image of coal mining companies and for improving its communication with their stakeholders. The evaluation focused on the Their findings suggest that the disclosure of Nikkei 500 index that includes environmental actions through CSR reporting 500 flagship companies in may help companies improve their Japan. As part of the sample, environmental legitimacy. Also, the findings there were energy-related indicate that sound environmental practices companies from the sectors of have a higher positive impact on a firm's oil and gas, mining, legitimacy than symbolic responses to the petroleum, and coal. stakeholders.

Forest bioenergy

The findings suggest that a more profound integration of cultural aspects and cultural sustainability evaluations is needed in CSR management.

46

Author (year)

Title

Journal

Leitoniene & Sapkauskiene (2015)

Quality of Corporate Social Responsibility Information

Procedia Social and Behavioral Sciences

Lemke & Petersen (2013)

Teaching reputational risk management in the supply chain

Supply Chain Management

Liew, Adhitya, & Srinivasan (2014)

Liu, Garcia, & Vredenburg (2014)

Sustainability trends in the process industries: A text mining-based analysis

Computers in Industry

CSR adoption strategies of Social Chinese state oil companies: Responsibility effects of global competition Journal and cooperation

Topic

Type of study

Theoretical approach

Industry of analysis

Most significant contribution The findings suggest that large and joint stock companies that are constantly monitored and are pressured to be responsible tend to disclose CSR-related information of higher quality in terms of relevance and reliability. Proposes a Supply Chain Social Responsibility management process as a way to achieve and maintain low reputational risks and improve the overall reputation of the company along with its supply chain.

CSR reporting and disclosure

Qualitative content analysis

CSR reporting

The sample of selected companies included some from the energy sector.

Reputational risk

Qualitative analysis based on interviews and workshops

Supply chain management and reputational risk

The article focuses on a diversity of sectors and includes some analysis for the energy sector in general

Sustainability reporting

The study focuses on four sectors of the chemical industry, one of which is the oil/petrochemicals sector (e.g. as a producer of fuels and energy products). The sample includes the largest companies of the Forbes ranking of the global 2000 companies of 2011 (27 companies of the oil/petrochemicals sector)

Shows which are the most common sustainability-related concepts found on CSR and sustainability reports of a range of companies from four sectors within the chemical industry. With the findings, the authors categorize the sustainability-related concepts based on occurrence and involvement and define critical issues for each sector.

CSR and sustainability reports

Text-mining

Implementatio n and development of CSR strategies

Qualitative content analysis complemented with interviews

CSR management

Oil and gas

The findings suggest three driving mechanisms behind the implementation of CSR for the analyzed companies: 1) international and local environmental regulations; 2) selection pressures from partner oil companies in western countries, and; 3) the desire to increase their global competitive advantage.

Lloyd (2018)

The Impact of CSR Efforts on Firm Performance in the Energy Sector

Review of Integrative Business and Economics Research

Financial indicators

Quantitative analysis based on a single-variate regression model

Stakeholder theory

Energy sector in general

The findings suggest that global energy companies that are performing well financially tend to respond to stakeholder interests for other reasons beyond their financial objectives.

Loe & Kelman (2016)

Arctic petroleum's community impacts: Local perceptions from Hammerfest, Norway

Energy Research & Social Science

Local perception

Qualitative case study based on in-depth semistructured interviews

CSR theory focused on local perception and social license to operate

Oil and gas

The findings show that the local community and external groups and organizations perceive the company's impact and social responsibility in a different way.

47

Author (year)

Mazur (2015)

Mezher, Tabbara, & Hosani (2010)

Midttun, Dirdal, Gautesen, Omland, & Wenstøp (2007)

Mobus (2012)

Ngoasong (2014)

Title

Journal

Corporate Social Responsibility in Poland: Businesses’ SelfPresentations

Procedia Social and Behavioral Sciences

An overview of CSR in the renewable energy sector. Examples from the Masdar Initiative in Abu Dhabi

Management of Environmental Quality

Topic

Type of study

Qualitative CSR analysis based on communicatio a literature ns on company review and websites content analysis

Implementation and development of CSR strategies

Theoretical approach

Industry of analysis

Most significant contribution

Communication of CSR

The sample of the study includes companies from the energy sector in general as well as from the sector of Information and Communication Technologies. The author specify that the sample for the energy sector encompasses the mining industry of energy resources (coal, oil, gas), processing of energy resources (refineries), distribution of energy resources and their products, the production and distribution of electricity and heat.

The findings suggest that the CSR initiatives of the selected companies can be traced to the top management, supervisory board, spokesman or individual employees. The results indicate that the communication of CSR of the selected companies tend to focus on activities of social character more than on the environmental or economic ones.

Renewable energy

The case study depicts a company that aims to become a leader in the renewable energy sector and which sees CSR as the best way to do so. The article highlights the benefits and positive impact that the company sees in using CSR as main business framework.

Qualitative case study

CSR theory

Integrating corporate social responsibility and other strategic foci in a distributed Corporate production system: a Governance transaction cost perspective on the North Sea offshore petroleum industry

CSR communications and statements

Qualitative content analysis complemented with workshops

Strategic profiling and CSR

Oil and gas

The findings suggest that each company has a different CSR profile which suggests a diversity of strategic interests being the most common on market positioning.

Corporate Social Responsibility (CSR) Reporting by BP: Revealing or Obscuring Risks?

Journal of Legal, Ethical and Regulatory Issues

Media coverage of major oil spill and CSR reporting

Qualitative content analysis

CSR reporting

Oil and gas

It highlights the relevance of transparency in CSR reporting and points out that its actual focus seems to revolve around self-promotion rather than self-reflection.

Energy Policy

Localized business strategies

Qualitative narrative analysis that is based on content and context analysis

Local content strategies

Oil and gas

The findings suggest that the sampled companies see CSR as a key element of their local content strategies.

How international oil and gas companies respond to local content policies in petroleum-producing developing countries: A narrative enquiry

48

Author (year)

Oh, Bae, & Kim (2017)

Özcüre, Demirkaya, & Eryiğit (2015)

Patari, Arminen, Tuppura, & Jantunen (2014)

Pegg (2012)

Raman (2018)

Roeck & Delobbe (2012)

Sepulveda & Mendizabal (2011)

Title Can Sinful Firms Benefit from Advertising Their CSR Efforts? Adverse Effect of Advertising Sinful Firms' CSR Engagements on Firm Performance Is it Possible to be a Sustainable Energy Company in Turkey? A Case Study of OMV's Thermal Electric Power Plant in Samsun Competitive and responsible? The relationship between corporate social and financial performance in the energy sector Social responsibility and resource extraction: Are Chinese oil companies different? Managing Employees Perception on Organizational Practices - A Contextual Study on Retention of Indian Mining Professionals Do Environmental CSR Initiatives Serve Organizations' Legitimacy in the Oil Industry? Exploring Employees' Reactions Through Organizational Identification Theory

Business in climate or climate in business?

Theoretical approach

Industry of analysis

Most significant contribution

Mixed method research based on descriptive statistics

Social norm theory and the theory of organizational stigma

The nuclear energy sector is analyzed as one of five controversial industries (tobacco, alcohol, gaming, firearms, military, and nuclear energy)

The findings suggest that the advertisement of CSR activities can be used to improve the negative image of "sinful" firms but its effect is linked to the social norms and idiosyncrasy of the place where they operate.

CSR strategies

Case study based on content analysis and semi-directive interviews

Sustainable business strategies

Oil, gas and renewables

The findings suggest CSR as a fundamental factor for the company for addressing its key challenges and for advancing its efforts for becoming sustainable.

Financial performance

Quantitative analysis based on bilateral causality using the Granger causality test

Corporate financial performance

Energy sector in general

The findings suggest that there is no bidirectional causality between CSR implementation and financial performance.

Business practices

Qualitative review

Organizational stigma (not explicit)

Oil

The article suggests that Chinese oil companies carry an external stigma with regards to their international operations.

Sankalpa: Journal of Management & Research

Strategies for the retention of mining professionals

Mixed method research

Organizational management and social exchange theory

Mining (minerals and coal)

The findings suggest a direct relationship between responsible human resources, compliance, fairness and trust practices with the employee's intention to stay.

Journal of Business Ethics

CSR initiatives that foster employee commitment to the company's goals

Quantitative research based on a survey with self-report questionnaires

Oil

The findings suggest that CSR can be of benefit in controversial industries (such as oil) to foster and reinforce the employee's identification, relationship and trust with the company.

Management of Environmental Quality

Vulnerability and impact of climate change on several sectors

Qualitative research based on multi-criteria analysis

Evaluates the energy sector in general as part of the evaluation of eight sectors

Provides a prioritization order for the socioeconomic sectors that need to take action to adapt to climate change and places the energy sector as number 5. The authors conclude that CSR needs new approaches that combine biocentric and anthropocentric theories and that uses a climate

Journal

Journal of Business Ethics

Procedia Social and Behavioral Sciences

Renewable & Sustainable Energy Reviews

Resources Policy

Topic

Type of study

CSR implementatio n and CSR advertisement

Stakeholder theory

Vulnerability and climate change adaptation

49

Author (year)

Title

Journal

Topic

Type of study

Theoretical approach

Industry of analysis

Most significant contribution change framework as the basis for long-term sustainability strategies for companies.

International Journal of Human Rights

Environmental and social impact of the production of shale gas, coalbed methane (CBM) and ‘tight oil’ (also known as fracking)

Qualitative analysis

Quantitative analysis in the form of a Pilot study

Short, Elliot, Norder, LloydDavies, & Morley (2015)

Extreme energy, 'fracking' and human rights: a new field for human rights impact assessments?

Siano, Conte, Amabile, Vollero, & Piciocchi (2016)

Communicating Sustainability: An Operational Model for Evaluating Corporate Websites

Sustainability

CSR and sustainability communicatio ns on company websites

Skagerlind, Westman, & Berglund (2015)

Corporate Social Responsibility through Cross-sector Partnerships: Implications for Civil Society, the State, and the Corporate Sector in India

Business and Society Review

Case Study based on semiImpact of CSR structured interviews and a questionnaire

Sparkes (2014)

Corporate social responsibility: Benefits for youth in hydropower development in Laos

International Review of Education

Syrjälä & Takala (2009)

Before and after: employees' views on Social corporate social Responsibility responsibility: energy-sector Journal stakeholders in Nordic postmerger integration

Szczepankiewicz & CSR Reporting Practices of Mucko Polish Energy and Mining (2016) Companies

Sustainability

Impact of CSR

Case study

Employee perception

Qualitative analysis based on interviews

CSR reporting

Case study based on content analysis

Human rights in the energy sector

Shale gas, coal-bed methane (CBM) and ‘tight oil’ (also known as fracking)

It presents a review of the impact of fracking from a human rights' perspective and concludes that human rights impact assessments should become relevant for the energy sector and go beyond traditional CSR reports.

Sustainability Reporting

The pilot study analyses the 37 companies of the electric, gas and water utilities sectors that are included in the Dow Jones Sustainability World Index 2015.

Proposes an operational model to evaluate and improve sustainability communication in digital contexts.

CSR theory and civil society theory

Eolic energy

Presents a case study of CSR implementation and its impact on the community where the energy company operates.

CSR theory

Hydroelectric

The article presents a case study in which CSR practices were implemented as preventive and proactive tools for community involvement. The findings suggest that CSR practices can play a crucial role in preventing risks that may affect the population in energy projects.

Stakeholder theory

Hydro, nuclear, wind, natural gas, biomass and coal

The study shows how the perception of employees vary before and after a corporate merge and by doing so the article highlights the relevance of CSR as part of the change management process.

Energy and mining in general

The findings show that CSR reports of Polish energy companies have different approaches with regards to the content and aim of the reports. The findings suggest that Polish energy

CSR reporting

50

Author (year)

Title

Journal

Topic

Type of study

Theoretical approach

Industry of analysis

Most significant contribution companies internally analyze their environmental impacts and have developed and implemented sustainable development concepts in their management.

Tenca (2018)

Trapp (2012)

Wanvik (2016)

Wilson (2016)

Remediating corporate communication through the web: The case of about us sections in companies' global websites Corporation as climate ambassador: Transcending business sector boundaries in a Swedish CSR campaign Governance transformed into Corporate Social Responsibility (CSR): New governance innovations in the Canadian oil sands

Negotiating uncertainty: Corporate responsibility and Greenland’s energy future

Esp TodayJournal of English for Specific Purposes at Tertiary Level

Corporate communicatio ns on company websites

Genre analysis complemented with corpus linguistics

Organizational identity and image (not explicit)

Renewable energy

Public Relations review

CSR practices

Case study

CSR theory and cross-sector collaboration

Hydro, nuclear, wind, natural gas, biomass and fossil-based power generation

CSR practices

Case study based on interviews

CSR and stakeholder theories as well as the post-political condition theory

Bitumen extraction

CSR practices

Case study (not explicit) based on interviews and personal communication and complemented with content analysis

CSR theory

Petroleum sector in general

The Extractive Industries and Society

Energy Research & Social Science

The findings suggest that companies use their websites as informative and self-promotional sources that help them shape their identity as trustworthy business partners and to project a positive image to their stakeholders. The article depicts a case in which a company takes broader social responsibilities than before and faces mixed responses from its stakeholders. The findings suggest that in this case CSR took a broader role in the governance structure, in particular in the engagement with the Aboriginal communities affected by the company's operations. The findings suggest that understanding local CSR values is a key factor for establishing a good relationship between energy companies and the societies with which they interact. Furthermore, the findings point at CSR as a guiding tool for energy companies in places where legislations and regulations as well as governmental structures are not as strong as in other parts of the world.

Note: The selection of the most significant contribution is based on the judgement of the authors of this literature review.

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Table 3. Most frequent words Number of documents Ranking Word where it appears 1 csr 54 social 54 2 corporate 54 3 companies 53 4 environmental 54 5 business 54 6 energy 54 7 responsibility 54 8 sustainability 49 9 management 53 10 development 53 11 oil 38 12 industry 51 13 company 54 14 research 51 15 local 48 16 reporting 43 17 gas 44 18 journal 52 19 firms 40 20

% of documents where it appears 98.2 98.2 98.2 96.4 98.2 98.2 98.2 98.2 89.1 96.4 96.4 69.1 92.7 98.2 92.7 87.3 78.2 80.0 94.5 72.7

Number of times it was used 3837 2848 2278 1808 1742 1553 1527 1487 1359 1209 1192 1173 1081 1073 1060 1037 967 942 925 896

Notes: 1) The list excludes transition words, articles, personal pronouns, quantifiers, and words that do not represent directly the content of the documents that were evaluated. 2) The word frequency test was conducted on the final selection of publications.

Acknowledgements We want to thank David Cook for proofreading the final version of the manuscript and helping improve the overall English writing style. Funding We are grateful and acknowledge that this research was made possible by the support of the Mexican National Council for Science and Technology (CONACyT for its abbreviation in Spanish) which granted a 36 month scholarship to ML to conduct his PhD at the University of Iceland.

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Highlights for the manuscript: Drivers that motivate energy companies to be responsible. A systematic literature review of Corporate Social Responsibility in the Energy Sector

The main highlights for this research are: •

The literature on this topic is relatively new and has increased recently.

•

Internal, connecting and external drivers motivate energy companies to be responsible.

•

Energy companies seem to have responsive or proactive approaches to CSR.

•

Understanding the motivations for responsible behavior can help in policy making.