BP's Post-Spill CSR Report Long on Rhetoric, Short on Goals

BP's Post-Spill CSR Report Long on Rhetoric, Short on Goals

Reading any oil and gas company sustainability report is an exercise in parsing carefully bland wording -- "responding to stakeholder concerns," "extracting resources responsibly," and so on -- but never more so than in reading BP's 2010 Sustainability Review.

In the company's first CSR report since the catastrophic Gulf oil spill nearly one year ago, BP has, perhaps to its credit, put the issue front and center. The report's cover consists of a photo from the spill, and the first third of the 50-page report focuses on the disaster and BP's response.

Despite all the ink given to the spill throughout the report, you could make the argument that BP is trying to start over, inasmuch as a global energy conglomerate can start fresh.

Among the most notable elements of the report is that there are essentially zero goals for future performance listed. Sure, BP says it plans to invest an additional $1 billion in "low-carbon energy markets" in 2011, but when you get to the alternative energy section, you only find that statement repeated, with no hard goals or even suggestions as to where they will invest that money.

The report offers a broad overview of the benefits of biofuels, wind and solar, but it seems likely that BP will plug a good chunk of that commitment into natural gas extraction, given its prominence in the report's section on "meeting the energy challenge."

There is one chart that, for me at least, really lays out the gist of the report. A small version is below, you can click on the image for the full-sized version.

figure 1



What you see there is "BP in Figures," and the numbers in the shaded green box show figures that do not include the Deepwater Horizon spill. So these numbers represent a fork in the road, an alternative future as if the spill hadn't happened.

And the picture isn't that pretty: Even without Deepwater, the number and volume of oil spills were on the rise in 2010, and direct and indirect greenhouse gas emissions were holding steady after climbing since 2006.

Perhaps the most interesting part of BP's 2010 Sustainability Review are the comments sprinkled throughout from Ernst & Young, which audited the report and provides assurance on the information.

The "observations" from E&Y, called out in yellow boxes in the report, give a much-needed outside perspective on the report. For instance, the comment within the "Working with suppliers" section of the report -- BP's reliance on outside contractors, along with poor emergency planning and even poorer lines of communication, were a big part of why the explosion led to the disastrous, ongoing spill -- E&Y comments: 

BP has included increased coverage of emerging sustainability issues, in particular influencing the working practices of third parties. BP's internal investigation into the Deepwater Horizon incident and the Presidential Commission both stress the importance of strong contractor oversight. BP's safety reporting shows the importance of the issue – more than 60% of the hours worked within its operations were undertaken by contractors. We discussed BP's commitment to reviewing the way it works with contractors. It will need to highlight any changes made in future reporting.

And a little later, in the section on environmental management:

We discussed with BP their actions to implement their methodology for identifying and managing the environmental and social impacts of projects. In light of the Deepwater Horizon incident and subsequent investigations, interest in the application of this approach in sensitive environments will increase. In particular, BP's proposed interest in the Russian Arctic highlights the need for BP to report in future on the application of this process in its most challenging operations.

E&Y also calls out BP for their lack of sustainability goals, with the benign-sounding comment in the closing assurance section of the report: "We consider that BP could have covered the following subject area in more depth in the Report: Disclosure of future environmental performance targets."

I'm in the process of trying to learn more about the role E&Y played in shaping BP's report, and will hopefully have an update or a follow-up article in the coming days. In the meantime, BP's report has been published, and for the company the dice have already been thrown: It took Exxon decades to lose the taint of its Valdez spill (if it yet has), and while financial investors will continue flocking to BP, no number of forward-looking CSR reports or apologies are likely to wipe the black stain from BP's green-and-yellow logo.