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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:
- 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?
- Can society (or investors) trust the material in sustainability reports -- for BP, the oil and gas sector, or any other company?
- 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
Reporting and the GRI
I like that you've taken on this topic. I think the CSR "experts" got caught up, as everyone else did, in BP's brilliant marketing and PR campaign. We wanted to badly to believe that a company like BP would indeed move Beyond Petroleum.
I also think the road being paved to make GRI the default reporting framework will leave us less - not more - informed about companies' sustainability performance. The GRI is a cookie cutter approach to reporting and, frankly, leaves way too much room for interpretation to ever be a meaningful standard. I think it's useful as a guide for companies figuring out how to start the reporting process, but beyond that I don't see great value in its current form. In addition, the "grading" piece of it (you mention BP was an A+ reporter) is misleading. In fact, the GRI even says, "The GRI Application Level check does not represent GRI’s view on the value or quality of the report and its content; It is simply a statement about the extent to which the GRI Reporting Framework was utilized." So an A+ from the GRI isn't the same as getting an A+ for a job well done. But the two are often conflated anyway, which leads to the notion that BP received an A+ grade from the GRI for its sustainability efforts.
CSR reporting would indeed benefit from a standard framework - something that details what minimum amount of data should be included to make a report meaningful and useful, and some process for assuring the integrity of the data included. But the more we see GRI reporting as a check box requirement that companies are eager to tick off - whether for certifications or winning new business - the farther away we will get from meaningful CSR reporting. And when I say meaningful CSR reporting, I mean the kind of reporting that first and foremost leads companies to take stock of - and work to improve - their sustainability performance. Good reporting does this because it exposes strengths and weaknesses in systems and processes for collecting and tracking performance data. The better the systems and processes, the better the data. And the better the data, the more useful it is for companies to use it to make decisions. Another crucial element of meaningful reporting, and one which is woefully absent from the GRI, is goal-setting and progress tracking. Setting goals that matter and reporting on progress toward those goals is an important way for companies to be held publicly accountable. I took a sail through BP's report and couldn't find any goals. They may be there, but they most certainly are not there in a way that's easy to find and/or follow, and therefore easy to hold BP to account for them. Without publicly stated goals, what good does it do stakeholders to know BP's self-proclaimed performance? The goals are what will allow stakeholders to dole out A+ grades.