China National Petroleum: Strategic Philanthropy example

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China National Petroleum: Strategic Philanthropy

One of the biggest world’s oil exploration and extracting companies, the state-owned China National Petroleum Corporation, pursues environmentally friendly philanthropic strategy. With significant decrease of income due to the worldwide oil prices fall, CNPC not only stays afloat but rather takes an advantage of its philanthropic activities.

The strategic philanthropy of the CNPC centers on the balanced alignment of operations and safety, energy and the environment, corporate and community interests, and employers and employees. The company specializing in both most profitable and most harmful activity of oil extraction does not stand aback from the urgent worldwide problems. It has a number of coordinated programs and projects in the fields of health, community welfare, and climate change ("Environment & Society", 2017). For example, in 2008 the company started building of the carbon emission reduction base to promote desert control and reduce carbon emissions in one of the most disaster-prone areas in China – Zhongwei City ("Building Carbon Emission Reduction Base in Zhongwei City", 2017). The efforts significantly improved the condition of the fauna in the desert and almost renewed it.

CNPC brand image highly depends on its efforts in the environment protection domain since the company has long been known as the world’s number one air pollutant. In 2015 CNPC was one of the eight companies that emitted 6.59 gigatons of CO2 equivalent (Shankleman, n.d.). That amount was infuriating for the public and thus destroyable for the company’s image. The current company’s approach has been largely augmented leading to better image and stronger community support. Since oil extraction and exploration do not add up with the concept of the green energy technologies being the Earth’s future, to keep company afloat is only possible through strong support on behalf of the world’s community.

In the last three years the CNPC has seen a significant drop in its net profits due to the unprecedented decrease of the world’s oil prices and rejection form the extensive oil extraction. According to the company’s financial statements (2014; 2015), net profit fell from 140,808.07 million RMB Yuan in 2013 to 56,241.88 in 2015. In 2014 the net profit index amounted to 123,844.68 million RMB Yuan (2014 Annual Report, 2015). In his statement on the 52% CNPC’s profit fall, Chairman Wang Yilin noted that the company had coped with all the risks and challenges, and changed the model of chasing speedy expansion to a model focusing more on quality growth (Guo, 2016). Undoubtedly, this statement supports the general philanthropy strategy of the company, and the loss of profits can partially stem from that focus change. Nevertheless, the rapid decrease of the oil prices was the main reason for worsening of the financial situation.

The company aims to guarantee easier access to education to children living in the poor regions, to alleviate domestic poverty, to promote sports and to take special care of the employees’ health. The biggest financial contribution company has committed so far is the scholarship fund that awarded …

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