Case study: How Baker Hughes creates economic value for its stakeholders
Baker Hughes is an energy technology company that provides solutions for energy and industrial customers worldwide, conducting business in more than 120 countries. In 2021, Baker Hughes generated a direct economic value of $20.5 billion in revenue, which was distributed to a wide variety of global stakeholders.
This case study is based on the 2021 Corporate Responsibility Report by Baker Hughes, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Baker Hughes seeks to generate, through its operations, sustainable, long-term economic value for all its stakeholders. Tweet This! In order to create economic value for its stakeholders Baker Hughes took action to:
- create economic value for suppliers
- create economic value for providers of capital
- create economic value for governments
- create economic value for communities
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With this case study you will see:
- Which are the most important impacts (material issues) Baker Hughes has identified;
- How Baker Hughes proceeded with stakeholder engagement, and
- What actions were taken by Baker Hughes to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2021 Corporate Responsibility Report Baker Hughes identified a range of material issues, such as attracting, retaining and developing talent, reducing GHG and other air emissions, diversity, equity and inclusion, business ethics and transparency. Among these, creating economic value for its stakeholders stands out as a key material issue for Baker Hughes.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process s of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Baker Hughes engages with:
To identify and prioritise material topics Baker Hughes engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Customers | · Global, regional and local industry events, forums, and conferences · Proprietary company events and meetings · Partnerships and working groups to advance best practices |
| Investors | · Public quarterly earnings calls · Annual shareholder meeting · Executive meetings and presentations · Outreach programme led by Baker Hughes’ Investor Relations group, the Corporate Secretary’s Office, and Executive Compensation Team |
| Employees
| · Town hall meetings · Interactive online forums · People leader engagement · Employee resource groups, many with senior leader sponsors · CEO’s meetings with the Employee Pulse Group |
| Governments | · Formal and informal bilateral meetings with public officials at all levels of government · Lobbying and other direct engagement in compliance with applicable laws and regulations |
| Communities
| · Civic engagement through economic development groups, chambers of commerce and related forums · Collaboration and social investments where Baker Hughes operates and in support of broader society |
| Policy groups and associations
| · Membership participation across the globe · Working groups, committees, and public-private partnership activities in industry groups and associations · Leadership and committee positions that extend and strengthen organisational capabilities |
| Universities, Institutions, and NGOs
| · Connections, collaborations and partnerships on a variety of shared business, industry, social, and environmental interests globally |
What actions were taken by Baker Hughes to create economic value for its stakeholders?
In its 2021 Corporate Responsibility Report Baker Hughes reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for suppliers
- In 2021, Baker Hughes paid $83 million to diverse suppliers and small businesses.
- Creating economic value for providers of capital
- In 2021, Baker Hughes paid $1,488 million to providers of capital.
- Creating economic value for governments
- In 2021, Baker Hughes paid $314 million in net cash tax payments.
- Creating economic value for communities
- In 2021, Baker Hughes paid $45 million in community contributions.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
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References:
This case study is based on published information by Baker Hughes, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://dam.bakerhughes.com/m/62a18e88ae7eef08/original/Baker-Hughes-CSR-Report-2021.pdf
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