Has BP mismanaged their CSR down to the deepest depths?

We’ve looked at length at the value in a company developing an organized approach to CSR – Corporate Social Responsibility. The planning stages are as valuable as the implementation and maintenance of the projects, guidelines and practices you attune your company with. In 2010 consumer awareness and more discretionary are the most used tools of the buyer, whether you sell goods or a service the difference between gaining a new customer or losing one to competition might be your CSR performance. Choice is a good thing in business and an active CSR program can level the playing field for both the buyer and the seller. We usually explore the success of companies as it relates to CSR but we are in the midst of seeing a company widely regarded as an industry leader in CSR (if not a global benchmark setter) falling from grace at a remarkable pace.

Two months ago if you asked which company consistently leads the energy industy in CSR awards and recommendations the answer more often than not would have been BP – British Petroleum. The company had a long and commendable record in the industry and when studies were published and awards given BP would frequently be the name on the certificate. This was up until April 21st when the Deepwater Horizon offshore rig exploded in a ball of flame and after burning for two days sunk to the bottom of the ocean. Initial reports were focused on the loss of life, with some moderate regard for a potential oil leak from the existing well. Over the next week  news broke very gradually that not only was the well still releasing oil, but that repairs would be difficult. Also snowballing into chaos has been the debate about the level of oil being discharged, original estimates proved too conservative and even today the amount per day is in limbo. What is certain is that a huge environmental disaster has unfolded over the last six weeks and still no end is in sight.

I recall speaking to friends at the end of April about the disaster as the seriousness of the damage was being uncovered. We spoke about the size of BP and whether this might be a situation they could rebound from with moderate loss and credibility intact. I remember talking about the size and wealth of BP and how they would certainly continue and avoid intense negative impact if they were seen as being in control of the entire situation and that the oil didn’t flow freely into the sea for more than another week. This conversation was over 30 days ago and sadly my predictions of what needed to be accomplished have proven valid on both fronts. I even wrote about how BP could ride out this storm 4 weeks ago, in truth it hasn’t gone well.

We all know now that this has turned into the biggest environmental disaster of our time. The question is whether BP could have handled things better – and for better read differently. The answer is a resounding yes, for while there seems to now be a public perception that off-shore drilling is laced with great risk, the demeanour and reaction of the company has caused nothing but damage to the reputation of BP. Of course even if they handled the government and the media in a fashion which suggested more expertise, concern and urgency they would still be responsible for a huge man made disaster. Strangely a company that based on all earlier accounts understood that being responsible mattered greatly, they have consistently mismanaged the public relations battle and failed to assuage those impacted by the disaster that BP truly ‘care’.

Do BP care? Its a cheap question really, naturally they have a huge responsibility in terms of committing the needed resources and fiscal muscle to both stop the flow of oil and do all that can be done to begin the clean up process. I don’t think any oil company is fully prepared for a disaster of this scale, nor can a remedy be guaranteed when nothing entirely equivalent has ever happened before beneath 5,000 feet of water. What another company may have done better is handled their reputation and reaction with more confidence and diligence, with hindsight BP must wish they had done so.

Whether you agree or disagree with the need for off-shore drilling is another issue altogether. I think everyone agrees that a corporation must manage their disaster recovery efforts with the broadest integrity possible and co-operate with other agencies. Especially in such a high risk and reward industry as oil.

Where do BP stand now? The speculation that this could result in a collapse of the company is becoming warm in recent days. BP have been removed from the Dow Jones Sustainability Index this week. The index exists as a benchmark stock measurement for the companies that excel in CSR. The US government seems to have run out of patience with the company as the finger pointing gets more agitated each day. BP’s shares have fallen more than 35% since the April 20 accident, on Thursday BP was trading at about $39 a share, down from nearly $61 on April 20. In real terms the share value has fallen by over $65 billion US…that would be about double the GDP of Bulgaria. BP also might want to coach their chief executives to not say “I’d like my life back” in the middle of this chaos.

BP have begun broadcasting their apology adverts on American TV, comedians suggest filling up your car with BP gas and leaving the pump running. Activists demand boycotts, and mother nature simply suffers. I saw a site today that is running a competition for the best new BP logo, from which I selected today’s image, nothing could better sum up the CSR explosion that BP have on their hands.