Sustainable Building - Canadian student's project

Check this out .. college students from Flemming College in Canada, building a sustainable building (Camp Kawartha Environment Centre) with these great features

• Geothermal heating and cooling
• Radiant floors
• Living roof seeded with local plants
• Solar hot water
• Grid-tied solar panel PV power
• Net-zero energy design supplying evenly back to the grid at peak demand hours
• Pre-fabricated and built-on-site straw bale walls
• Rain water collection to supply all building water use
• Indoor constructed wetland water purification system
• Passive solar design
• Super insulative straw bale, hempcrete and rammed earth construction
• Only thatch roof in Ontario, locally harvested grasses
• Cordwood benches

I hope other colleges and universities especially in Malaysia will encourage similar research and projects to find a sustainable building suitable for the local climate. It will also be a great way to instill the importance of living sustainably.

SCORE - Sarawak Corridor of Renewable Energy

You may have heard thousands of time about the famous MSC (Multimedia Super Corridor) but have you have ever heard of SCORE - Sarawak Corridor of Renewable Energy ??

When I first heard about SCORE, I imagined clean energy .. I imagined some kind of research being done around the areas of clean and sustainable/renewable energy such as heat/light from the sun or wind power or hidro/wave power on the sea etc, so I told myself to do some research to understand this effort more ....

BUT to my dismay this is not the case ... actually it is a very misleading term being used the relevant parties .. really misleading and disappointing

It says it has a very large deposit (1.46 billion tonnes) of coal ? I guess the state or the players intend to fully extract and burn it to produce cheap electricity??? so much for my imagination on clean energy !!

Looking at their strategies and priority industries, quite soon Sarawak will also be choked with one of the greatest pollutions in this region and environmental disaster

Its funny .. the website says one of the benefits are increase in quality of life ? How can that be? I guess , whoever it may be, only considers income level as the yardstick for quality of life !!!

Critical success factors to achieve sustainability

Malaysian corporations are still in its infancy with regards to achieving a truly sustaining phase. There is still more to learn and do. It is a long journey to achieve the sustaining phase but the rewards are great.

There are a few critical success factors to achieve sustainability as listed below.

1. Integration of the local community and environment as key stakeholders of the corporation.

Corporations must include the local community and the environment as a key stakeholder with the highest priority. By doing so, the profit oriented corporation will be able to balance their profit orientation with their social responsibility which includes the betterment of society as well as the protection of the environment

2. Being very clear on WHAT exactly to achieve (to be spelled out as the mission & vision) and more importantly, HOW to achieve it from sustainability point of view. Check out at Interface's Mission Zero.

Currently many organizations have Corporate Social Responsibility policy or statements which seems more like a public relations activity. This has to change if the corporation is serious about being a sustaining organization. Sustainability must be the core of the corporate strategy.

3. Continuous and active involvement of employees.

It is critical that employees understand how they can contribute positively to help the organization to achieve the sustaining phase. It is also critical they are motivated to do so. Otherwise it will be just a greenwash. Having their performance related compensation is one way to achieve this. There will be also spillover effect whereby the employees will in turn educate their family members on sustainability.

4. Ensure both our products and process including raw materials incorporates people and environmental friendliness. For example, what's the point of using electricity that was generated by burning coal or utilizing nuclear technology !!! We should go for renewable energy instead.

Challenges of electric cars

Nissan's plug-free electric car !! Yeah, that's the latest revolution in automobile innovation. According to this Guardian article which was posted last week, Nissan has developed a wireless charging system.

I guess this is in response to a key concern of potential electric car users. According to their research, people are worried about the inconvenience of recharging their cars. A very valid concern indeed and a great way to respond !! Bravo to Nissan !!

But I guess there are few other concerns as well. First, the distance that a single charge could cover. Second, the amount of time to recharge. Third, probably the most critical one, getting replacement batteries. Can electric car manufacturers jointly develop a standard, generic, "can buy anywhere/any brand" batteries?

The above model by Nissan is suitable for short distance travel such as to work or shopping and a long interval (to recharge) between the travel back to home from office or shop.

But how about people traveling far continuously (> 100 miles / 160kms). For example, I can't even reach Ipoh from Penang :-( which is roughly around 180-200 kms. If the recharge is quick and similar to current amount of time to pump a full tank ( 5 minutes ???). Currently it takes 25 mins to recharge 80%. Otherwise we will end up having long queues in recharge stations/outlets.

So I guess, the challenge moving forward will be to find ways to increase mileage for each recharge, making recharge even quicker or better still if can recharge on-the-go by capitalising on kinetic, wind or heat energy to continuously recharge the car.

Sustainability Analysis on PETRONAS

Executive Summary

PETRONAS is a fully-integrated oil and gas multinational corporation fully owned by the Malaysian Government. The nature of its business itself is causing sustainability issues because while oil is a key resource to generate power, it is also a great environment polluter and is not renewable natural resource. Although there are various stakeholders for PETRONAS, the Malaysian government and local governments where PETRONAS operates have the greatest impact on its strategies and actions. Whenever there is a conflict between governments and local community/environment, the viewpoints and expectation of the governments seem to be given priority, much to the detriment of the local community and environment. PETRONAS’s corporate social responsibility (CSR) activities such as in education and biofuel research are great but certainly not enough and sustainable. PETRONAS must take ownership of its direction to be a sustaining corporation. There are 4 main recommendations outlined for PETRONAS to help it be a “sustaining corporation”. First, PETRONAS must take environment stewardship by taking a three-pronged approach of “finding out where and how it damages the environment”, “mitigate and reduce the damage” and “reverse the damage”. Second, it must begin to sincerely respect human rights especially in places it has its operations. Third, it should work to find renewable and sustainable energy sources and technology; and economical way to them to consumers. Fourth, it should leverage its partnership with its education institutes to research, share and promote renewable energy technology and management processes. The key driver to all this change will be to place the Environment to where it really belongs – as a definite stakeholder in the Stakeholder Salience model of PETRONAS.

1 Introduction

PETRONAS (Petroliam Nasional Berhad) which is based in Kuala Lumpur, Malaysia is a fully-integrated oil and gas corporation and is ranked among FORTUNE Global 500's largest corporations in the world with a workforce of more than 30,000 and operating in more than 30 countries the world over. It is wholly-owned by the Malaysian government and is vested with the entire ownership and control of the petroleum resources in Malaysia through the Petroleum Development Act 1974. PETRONAS is the largest single revenue contributor to Malaysian government. This report will delve into PETRONAS’s various stakeholders and their impact on its strategies; its corporate social responsibility programs; and the criticisms level against it to understand where it stands in terms of a sustaining corporation. This report will also recommend further actions for PETRONAS to take it closer to be a sustaining organization.

2 Stakeholder Analysis
2.1 Stakeholders
There are 5 major stakeholder groups for PETRONAS:-
i. Governments - comprises the Malaysian Government and the various local governments where PETRONAS has its operations.
ii. Customers – consists of retailers/dealers and end-users of its products and services.
iii. Employees
iv. Local community - people living in countries/places where PETRONAS runs its operations
v. Environment



2.2 Impact on Strategy

Each of the various stakeholders of PETRONAS has their own claims and different degree of impact on PETRONAS’s strategies.

Based on stakeholder salience model for PETRONAS, the definite stakeholders for PETRONAS are the Malaysian government which fully owns the corporation and the various local governments which grant PETRONAS rights to explore and extract oil and gas in their countries.

The strategies that can be linked specially to the Malaysian government are:-
i. Enhance shareholder’s value (in this case it’s the Malaysian Government)
ii. Ensure continued future supply of petroleum for Malaysia by seeking opportunities overseas to explore, secure and develop new reserves

These are in addition to its vision to be a good corporate citizen. These two stakeholders are the most important for PETRONAS and this can be seen in its strategies and actions that usually favor the governments, sometimes to the detriment of the local community or environment as described in the 2 sustainability issues that follow.

Human Rights Violations

PETRONAS was listed in the “Dirty List” in 2003. “Dirty List” is an effort by The Burma Campaign UK, a human rights organization, to expose companies whose operations are directly or indirectly helping to finance the military dictatorship in Myanmar (formerly known as Burma). PETRONAS has also been linked to human rights violations in Sudan.

Environment/Ecological Destruction

According to Culture Change (2008) (which compiled findings from “Rainforest Action Network”), pollution from offshore rigs causes ecological imbalances such health and reproductive problems for surrounding marine life, destroys kelp beds, reefs and coastal wetlands, and exposes the wildlife to threats of oil spills. Since PETRONAS’s key activities are off-shore oil exploration and drilling, its activities do contribute to those environmental issues.

The examples above clearly shows that, in the eyes of PETRONAS management, the local community and the environment may be seen just as the dependent stakeholders and are less important than governments. Although there are mentions (listed below) on the well-being of society and environment in its strategies, it seems to take a back stage especially when there is a conflict between Local community & environment versus Governments.

However, all is not bad for PETRONAS. There are many corporate social responsibility (CSR) programs actively run by PETRONAS. The key ones are:-

Biodiversity

PETRONAS supports, funds and work towards conserving “nature parks” in Malaysia and other countries where it operates. It also encourages its employees to volunteer for nature conservation works.

Community Programs

Over the years, PETRONAS has organized, sponsored or actively involved in community based activities such as sports, drug prevention, classical music appreciation, arts and science exhibitions, and environment conservation understanding. Most of them are in conjunction with
associations owned by or linked with the Malaysian government. In the international forefront, PETRONAS’s contribution are mostly centered around education and health programs such as sponsoring students, funding for vocational facilities, clean water supply and mobile clinic
operations.

Renewable energy research

PETRONAS is repositioning its research and development activities to identify alternative energy sources such as bio-fuel. It utilizes renewable feedstock such as palm oil, the high yielding vegetable oil available (Palm Oil Truth Foundation, 2006). Additionally, PETRONAS is
working with car manufacturers such as Proton to develop “green engines” such as E01 engine which runs on natural gas . In 2007, it signed an agreement with Battelle Memorial Institute of the US, Battelle-Japan Corp and Mitsubishi Corp to set up a renewable energy laboratory in Bangi, Malaysia (Daily Express, 2007) which also has an Engine Vehicle Testing (EVT) facility.

Customers can be considered as the dominant stakeholder for PETRONAS. Two key PETRONAS strategies are “customer focused” and “ensure the products it manufactures and services it provides are in accordance with appropriate industry standards and best practices”. Truly enough, its products and services can be considered satisfactory especially to Malaysian consumers.

From strategic point of view, employees are seen as a great asset by PETRONAS and one of its key strategies is to “enhance the capability of its employees”. One major program by PETRONAS is its education and human resources training and development. PETRONAS’s involvement in education and training began in 1978 as part of the corporate initiative to develop its workforce to meet its human resources needs especially in the petroleum sector.

Last year, PETRONAS Education Division, which was setup in 1998, won the 2007 Prime Minister’s CSR Award for the education category awarded by the Malaysian government (The Prime Minister’s CSR Awards, 2007).

3 Current Issues

Apart from the issues described in the preceding section, there are another two key sustainability issues facing PETRONAS. There are:-

3.1 Sustainability Reporting

In a 2006 annual survey titled “World’s Most Sustainable and Ethical Companies” conducted by Management & Excellence among 15 major oil companies, PETRONAS was ranked last. The annual survey, conducted by Management & Excellence (M&E), evaluates and compares the compliance of each company with over 280 internationally recognized standards in transparency, corporate governance, social responsibility and ethics. The survey concluded that PETRONAS is ranked the world’s least transparent corporation (Malaysiakini, 2006). However, over the years, there seems to be some improvement on the part of PETRONAS to be more transparent in its reporting (TheEdgeDaily.com, 2008).

3.2 Renewable Energy

Biofuel is renewable but may not sustainable according to a web article. Quote below from Suite101.com (2007) summarizes the sustainability issues of biofuel industry.

" Suleiman Jasir al-Herbish, Director-General of the OPEC Fund for International Development noted that: "...biofuels had negative side effects such as reducing food production, distorting food market prices and exacerbating water shortages..."(UN Press Release, May 10, 2007)"

In short, biofuel benefits may be offset by serious environmental issues such as water shortage and soil erosions and ecological problems because of rapid deforestation for plantation to produce ingredients for biofuel and increased food prices in general caused by the shortage. It is also considered an ethical issue to burn food for fueling cars. (CNN.com, 2008).

4 Recommendation to achieve Sustaining phase

From the discussion above, PETRONAS can be categorized to be in the COMPLIANCE-STRATEGIC PROACTIVITY phases of the Sustainability Phase Model. There is still great opportunity for PETRONAS to bring itself nearer to sustaining phase. Few recommendations to achieve it are as follows:-

4.1 Environment Stewardship

To reduce environmental destructions and ecological imbalances caused by its activities, PETRONAS must be proactive and transparent in dealing with these issues. Recommendations for PETRONAS to be a “Sustaining Corporation”:- First, it must conduct an Environmental Impact Assessment (EIA) for all its current and future explorations and oil rigs. Second, it must conduct continuous audit on all its operations (off-shore and in-shore). Third, it should report out the findings (EIA and audit) to all interested stakeholders to get valuable feedback from them. Fourth, it is important for PETRONAS to continuously be innovative to find ways to mitigate and possibly reverse any environmental risks or damage caused by its activities. Better still, PETRONAS should also work closely with environmentalist experts to actively rehabilitate and nurture the many areas that have been damaged (“imbalanced”) by its operations. The benefits for PETRONAS is that its battered image can be improved in the eyes of the public especially environmentalists and governments. If successful, PETRONAS will have a competitive advantage over other oil and gas companies. It may also be a preferred company, especially in countries where there is high concern of environmentalism, to be offered exploration and drilling opportunities.

4.2 Respect Human Rights

Generally PETRONAS complies with the Malaysian government’s or whichever local governments’ (where it has its operations) rules and regulations in terms of social welfare including employee benefits or environmental concerns. However, in countries such as Myanmar, the human rights law itself is very low in standard, so complying with them may not be an issue at all for PETRONAS but certainly not sufficient from sustainable point of view. Recommendations for PETRONAS to be a “Sustaining Corporation”:- it should look beyond just
compliance to the governments’ rules and regulation. PETRONAS management should actively pursue social equity and human welfare issues while continue to be in operations in countries where the local government is condemned for human rights violations such as Myanmar. PETRONAS should use its influence to pressure the local governments to improve their human rights records. PETRONAS also must report out any improvements it has managed to bring out directly and indirectly. The benefits for PETRONAS are its corporate image will be tremendously improved and not be condemned by human rights groups while being able to continue operations in those countries. However, PETRONAS must also be prepared not to continue its business if it doesn’t succeed in improving human rights situation. Note: This may be difficult considering PETRONAS is fully owned by the Malaysian government and the Malaysian government’s position on Myanmar is to work with the present government in Myanmar to reduce its human rights violations and not to isolate it.

4.3 Promoting Renewable Energy

PETRONAS’s active research and development of renewable energy especially bio-fuel is important for its long term sustainability. It is worth to note here that biofuel (using palm oil) is in Malaysia’s “agenda” of renewable energy. Malaysian government is looking for alternate uses for its palm oil which is priced commodity and key revenue generator for the country. However, there are sustainability concerns as mentioned in section 3.3 above. Recommendations for PETRONAS to be a “Sustaining Corporation”:- it should look beyond just fuels (fossil-fuel or bio-fuel) as its revenue generator. PETRONAS should invest part of its research or fuel exploration budget into research of other more natural and sustainable energy sources and technology such as wind farms and solar. PETRONAS should form strategic partnerships with electricity producers in Malaysia and abroad to use PETRONAS’s new technology to generate electricity. The benefits for PETRONAS is by forming early partnerships with electricity producers and tie them with its technology, PETRONAS can ensure it has a great competitive advantage over other “energy sellers” and ensure it can continually be profitable while being a sustaining corporation.

4.4 Sharing of Expertise and Funding

PETRONAS’s involvement and contributions on education and human resource development are exemplary. PETRONAS, being a fully owned government entity, is actually expected by the Malaysian community in general, to contribute back to society. What is being done, however, is not enough. Recommendations for PETRONAS to be a “Sustaining Corporation”:- it should openly share its research findings on sustainable technology and best practices such as alternative energy sources and management & leadership techniques to promote sustainability with the institutes it is running which include Universiti Teknologi PETRONAS (UTP), Institut Teknologi Petroleum PETRONAS (INSTEP) and PETRONAS Management Training. It should also provide financial funding and expertise help for these institutions to conduct their own independent research on “alternative energy” technology. The benefits for PETRONAS (and Malaysia) is that this will help the institutions to achieve academic and research excellence and this will help the Malaysian government’s aspirations to make Malaysian an educational hub in this region. This will in turn help PETRONAS and its institution to attract world class talents into its fold.

5 Conclusion

In terms of Corporate Social Responsibility activities, PETRONAS is doing well. But it focuses more on non-direct activities. In order to become a sustaining corporation, PETRONAS should start practicing “real” corporate social responsibility by reducing and stopping environmental damage caused by its operations and actively seeks renewable and sustainable energy sources. In order to move into sustaining phase, PETRONAS must first treat the Environment as its definite stakeholder.