March 2008, International Petroleum Industry Environmental Conservation Association (IPIECA)
Social investment (SI) programmes are defined as the voluntary contributions companies make to the communities and broader societies where they operate, with the objective of benefiting external stakeholders, typically through the transfer of skills or resources. This guidance document aims to address the question of how to create successful and sustainable community investments and how to measure their success.
This guidance document aims to address the question of how to create successful and sustainable community investments and how to measure their success. There are many aspects closely linked to social investment, for example, local content efforts, stakeholder consultation or good governance initiatives. Given the importance of such topics, however, they should be discussed in their own right separately and fall outside the scope of this document.
The first section of the document examines the current state of social investment in the energy industry. Subsequent programmatic decision-making is related to programme identification and selection, which is typically based on a combination of social risk/opportunity assessment, corporate core competencies and priorities, as well as government plans and community input. Based on interviews with 33 SI experts from 11 companies, Table 1 (see document for table) offers a brief overview of the general observations and lessons learned.
Section 2 of this guidance document offers a framework for the design of SI programmes. The seven steps to consider before starting any SI programmes are:
- Step 1: Start planning early
- Step 2: Understand the context
- Step 3: Determine SI objectives and links to the business case
- Step 4: Determine the operating principles that provide the overarching ‘lens’ through which SI decisions will be reviewed
- Step 5: Link SI strategy to SI objectives!
- Step 6: Align SI priorities with the oil and gas project development timeline
- Step 7: Obtain early buy-in from the government and local communities
