Lessons for the CSR Industry from the Deepwater Horizon Spill

Prior to the Deepwater Horizon accident, BP was among the recognized leaders in sustainability reporting. A long-time "A+" reporter against the Global Reporting Initiative (GRI), BP has been listed by DJSI, FTSE4Good, has won numerous sustainability-related awards around the globe and regularly topped sustainability assessments, such as the Tomorrow's Value Rating.

Around the millennium, BP pioneered the oil and gas sector through its "Beyond Petroleum" communications platform anchored by public commitments to alternate energy development, community engagement and development and robust management systems for social and environmental protection. In short, BP has been a long-standing leader in the development of the "nuts and bolts" for a strong sustainability program.

Although the Deepwater Horizon incident is not unique (similar and worse examples of oil spills and other unsustainable practices abound) and, although BP's response can be argued to be better than similar instances in the past, the accident in the Gulf highlights the gap between messaging, perception and reality for the CSR industry.

For example, it appears that BP and its suppliers were cutting corners with regard to health and safety, but the BP Sustainability Report (and all of the other oil and gas majors) claim to have robust health and safety controls through the group-wide operating management systems. Similarly, it appears that the oil and gas companies have had inappropriate relationships with regulators in the U.S. Minerals Management Service, but these relationships are counter to the principles explicitly stated in each company's Code of Conduct.

We CSR practitioners should be asking ourselves some important questions in light of these conflicting results:

  1. Does the fact that a good CSR practitioner can have such an egregious error suggest a fundamental failure of CSR -- that governments should be the only arbiter of environmental and social responsibility, and companies should be held accountable only to government expectations?
  2. Can society (or investors) trust the material in sustainability reports -- for BP, the oil and gas sector, or any other company?
  3. Did we (the CSR analysts and practitioners) miss the boat and become swayed by these corporate sustainability reports?

To the first, I do not believe that this is a fundamental failure of CSR. To achieve real solutions to today's issues will require multilateral thinking and participation -- from companies, communities, governments, advocacy groups and researchers.

Businesses must accept that in many cases the enterprise must surpass regulations and political priorities to drive best practice. So long as businesses gain economic benefit from activities, society can hold them to account for the impacts those activities cause beyond the prescriptions of regulation.

The alternative, relying entirely on government to control industry, ignores the inherent political biases of lawmakers and the fact that government agencies are frequently bound by the same competing priorities of revenue (allowing business activities to generate taxes, fees, etc) vs. protective behavior (denying business activities in the interest of social and environmental good).

Next page: Three lessons we can learn from BP and Deepwater Horizon