What should we make of a company like BP, which promoted itself as a CSR standard bearer (and was recognized as such by CSR advocates), but that also failed persistently in relation to its CSR behavior (e.g., its 2005 refinery explosion, the 2006 oil spill in Alaska, and, more recently, the spill in the Gulf of Mexico – not to mention, of course, producing a product that has harmful environmental consequences)?
My initial reaction is to think that the firm’s prior CSR behavior was symbolic; that it was greenwashing its day-to-day operations with marketing spin and had tricked those in the CSR world who search for good news to support. The alternative perspective is to believe that BP was genuine in its approach to CSR and committed the transgressions as a result of carelessness, rather than gross negligence.
Either way, what does this chain of events say about the field’s ability to evaluate CSR? How much better at measuring CSR are we today compared to five or ten years ago? The article in the first url below raises these questions in a way that undermines many of the gains the CSR community was congratulating itself for having made in recent years:
“[BP] is a company with all the CR scouting badges: ISO14001 at major operating sites, an advanced Operating Management System, thorough materiality and risk assessment procedures, comprehensive stakeholder engagement processes, reporting to GRI A+ standard and assurance by Ernst & Young to AA100AS principles of inclusivity, materiality and responsiveness.”
How is it that a firm like Exxon is vilified by the CSR community, while a firm like BP is heralded, merely for pushing all the right buttons? Especially when, in terms of actual negative environmental impact, the article in the second url below indicates that there is a good case to be made that Exxon is a ‘better’ CSR performer than BP:
“Between 1997 and 1998 alone, for example, BP was responsible for 104 oil spills in the Arctic. And in 2008, BP received the largest fine in the history of the U.S. Chemical Safety and Hazard Investigation Board: $87 million for failing to correct safety hazards revealed in the 2005 Texas City explosion. As of June 2010, BP has had 760 such OSHA fines for “egregious, willful” safety violations. Meanwhile, Exxon Mobil has had just one.”
In this sense, BP reminds me of Enron, which was another firm heralded for its CSR and ethics best practice:
“How then is it possible that a much admired company fully implementing best practice can suffer a series of major, even catastrophic incidents? Not in areas outside the main thrust of CR management, … but in the core objectives of protecting people and the planet.”
How far have we really come since Enron? Do we not know what we are talking about? Or, are firms just very good at hiding what is really going on from outside observers? Either way, there are no short term solutions. On the one hand, if we do not know what we are talking about, it is going to take a long time to develop our knowledge to a place where we can effectively evaluate firm operations. Clearly, we are not there yet. On the other hand, if firms are very good at hiding what is really going on, then my sense is that growing communications technology and the free flow of information (Figure 4.4, p102) will eventually get us there, but that is also going to take time. I thought this quote was illuminating:
“One corporate executive told me recently that his company does not certify to ISO14001 because the independent certifiers are less rigorous than their own auditors.”
The article in the third url below continues the debate and Mallen Baker has some excellent comments in response to the second article at:
http://www.ethicalcorp.com/content.asp?ContentID=7003 (scroll down to the comments below the article).
Take care
David
Bill Werther & David Chandler
Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)
© Sage Publications, 2011
http://www.sagepub.com/strategiccsr2e/
Instructor Teaching Site:
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The library of CSR Newsletters are archived at:
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BP and the Gulf of Mexico oil spill: Exposing the limits of CSR-lite
BP's recent environment and safety record calls into question whether CR as currently practiced is fit for purpose
Simon Propper
Ethical Corporation Magazine
June 7, 2010
http://www.ethicalcorp.com/content.asp?ContentID=6985
Beyond petroleum: Why the CSR community collaborated in creating the BP oil disaster
The BP Gulf of Mexico disaster shows we have to move from reputation to reality
Natalya Sverjensky
Ethical Corporation Magazine
August 2, 2010
http://www.ethicalcorp.com/content.asp?ContentID=7003
BP and the Gulf of Mexico: Ten lessons for corporate responsibility
Simon Propper considers weaknesses in the CSR industry that should be addressed in light of the BP Deepwater Horizon disaster
Ethical Corporation Magazine
September 1, 2010
http://www.ethicalcorp.com/content.asp?contentid=7045
