Review of “BP: CSR goes up in smoke”
(Marketing Week, Jan.
25, 2007)
The articles in our course readings focusing on corporate
social responsibility make important points about weaving CSR into business
strategy for the purpose of business self-interest. Corporations should make CSR decisions for the same reasons
that they make other investment choices, as a “source of opportunity,
innovation and competitive advantage” (Franklin, 79).
Too often, however, CSR is viewed as a public relations
tool. CSR then becomes more a question of spin and strategic ambiguity than
corporate action. True CSR, as the
articles point out, involves changes in core behavior. It’s what a business does, not what it
says it does.
BP has had an appalling track record in the CSR department.
This is ironic considering that the subject of my article, Lord Browne, BP’s
CEO from 1995 till 2007, was one of the great trailblazers of CSR in the
petroleum industry. Two years into his tenure, he gave a speech at Stanford
University admitting that the oil industry was responsible for global
warming. He vowed to make
corporate responsibility a top priority for BP by committing billions to the
development of alternative energy sources. It was under his leadership that BP began advertising itself
as “Beyond Petroleum” and incorporated green motifs into its corporate
identity.
Did Browne have a passion for clean energy? Apparently. But did the public relations angle translate into true
corporate social responsibility?
Apparently not. Its commitment
to alternative energy represented only 5% of its capital expenditure, while oil
exploration amounted to 75%.
Browne left under a shadow following the explosion at BP’s
Texas City refinery in which 15 workers were killed and 150 injured. This came after several other notable
environmental catastrophes, including an underwater oil spill in the Caspian
Sea, a pollution scandal in Alaska and numerous legal infractions. According to
the panel that investigated the explosion that led to Browne’s downfall, “the
panel believes that if Browne had demonstrated comparable leadership on and
commitment to process safety, that leadership and commitment would likely have
resulted in a higher level of process safety performance in BP's US
refineries.”
Browne was replaced by Tony Hayward, who would preside over
an even bigger CSR nightmare two years later when BP’s Deepwater Horizon explosion would lead to the largest accidental
marine spill in petroleum history.
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References:
Benady, D. (2007). BP: CSR goes up in smoke. Marketing
Week (January 25). Retrieved
on June 28, 2012,
from:
Franklin, D. (2008) Just Good Business: A Special Report on
Corporate Social
Responsibility, The
Economist (January 19), 1-14.
Porter, M. & Kramer, M.
(2006). Strategy and society: The link between competitive
advantage and
corporate social responsibility. Harvard Business Review, 84, 78-92.
Will, BP is an interesting case study for CSR. I just read an article in the Washington Post that, like you, argues BP should have spent less money promoting the whole "Beyond Petroleum" angle and more money on safety. In the end, increased safety might have prevented the oil spill and had protected the environment. Do you think BP/Hayward has done a good job with CSR in the Gulf area post-spill?
ReplyDeletehttp://www.washingtonpost.com/wp-dyn/content/article/2010/07/16/AR2010071604070.html
I live down near the Gulf when I'm stateside, and there's still news about businesses that never received settlements from BP, fishermen without jobs, residual health impacts from the spill. The perception I've gotten from the news is that BP was churlish to the extreme in its settlements. And people haven't forgotten all the denials and deceitful "strategic ambiguity" from the summer of 2010 when oil was gushing week after week. BP's corporate line was "it looks worse than it really is." You learn a lot about corporate behavior by watching its knee-jerk reactions to crises. For BP, CSR seems to be window dressing.
ReplyDeleteAt oil companies' highest levels, do you think that CSR is anything more than a "necessary evil" that's required to do business? I'd be interested to see a cost-benefit analysis on how much oil companies have to gain from becoming good, safe, environmentally friendly companies versus just saying that they are while continuing with business as usual.
ReplyDelete"For BP, CSR seems to be window dressing." A tragic observation! It is interesting how businesses can become so consumed with a marketing angle like clean energy and do so poorly implementing it, then again BP is in business, not a NPO. They have investors to answer to who probably say they are interested in CSR, but when it comes right down to it they care about growth and dividends. Window dressing indeed. I feel in a perfect world consumers would care enough to boycott a brand that exploited them and negate the need for CSR-type window dressing. Do you think BP's CSR initiatives proved financially sound after all was said and done, or did they lose more than they gained because of poor public image?
ReplyDeleteMaybe it's that CSR was considered the purview of one part of the organization (probably marketing or communications), while the rest of the business just operated as usual. I think the challenge is making CSR part of the company's values, so that the focus is make money, but do little harm in the process. Probaly not realistic...
ReplyDelete