Using data envelopment analysis in comparing the environmental performance and technical efficiency of selected companies in their global petroleum operations

This study examined the environmental performance and economic efficiency of global operations of selected companies in the petroleum industry by analyzing the technical and technical efficiency. The selected companies were chosen from the 2008 GLOBAL 500 in the petroleum industry based on their 3-year average value of assets. Data of environmental pollutant emissions were obtained from the companies' sustainability reports. Environmental indices were used to conduct the eco-efficiency analysis using the data envelopment analysis (DEA) to obtain the overall eco-efficiency of the company. Economic data were obtained from the 2008 GLOBAL 500. Another DEA was performed to obtain the overall technical efficiency. Eco-efficiency scores and economic scores were analyzed using the Pearson's coefficient of correlation and the Spearman rank correlation coefficient Performance is gauged through the eco-efficiency indicator which is interpreted by environmentalists, economists and scientist to assess the reduction of adverse impacts on the environment. Results show a weak positive relationship between eco-efficiency and technical efficiency. The eco-efficiency indicator is a useful management tool in that it provides a means for managers and consumers alike to conduct environmental housekeeping.