The Corporate Social Responsibility (CSR) has gained increased importance in society. Famed management guru Michael Porter recently published an article on Shared Value, stating that CSR and corporate success would be integral in the future. Decision-making process in the corporate environment are now more often directly linked to values, respect for people, community and the environment. The main and expected role played by organizations is to be supportive of society; being aware of their needs and applying its efforts to “transform the world into a better place” through actions and strategy.
However some companies still don’t see CSR as a process of changing and transformation society and environment and the only purpose for these companies on its application is merely publicity and self-advertising. BP it’s one of the companies that misused the CSR’s concept. In 2002 the company spent over $200 million in PR and advertising to greenwash its brand, it even revamped its logo.
However the company had to deal with several environmental disasters during its communication campaign. During a speech to shareholders in 2001, BP’s Chief Executive John Browne said “When we launched the brand we used the phrase Beyond Petroleum. Some people thought that meant we were giving up oil and gas. I’m sorry to disappoint our competitors. Beyond Petroleum means that what we’re giving up the old mind set – the old thinking which assumed that oil companies had to be dirty and secretive and arrogant. I don’t believe we should be any of these things.”
However according to a study published by Greenpeace in 2009 reported that BP “allocated 93 percent ($20 billion) of its total investment fund for the development and extraction of oil, gas and other fossil fuels. In contrast, solar power was allocated just 1.39 percent and wind a paltry 2.79 percent.” There was huge backlash against BP new slogan Beyond Petroleum to the point where it was ridiculed by everyone including industry insiders.
CSR is not about managing an image over the short term it’s about building trust with society and being seen to authentically give back to it. Porter has cited many examples where this is already happening for example with the Toyota Prius vehicle or Whole Foods the organic and fair trade groceries. How can a company like BP or other Oil and Gas companies or resource extraction companies do this? I think Porter idea of Shared Value is really propagating that everyone benefit from the profiting of companies. In the extraction business jobs are the best way to give back to society many of the societies that have extraction industries, such as Angola, Nigeria, Brazil, Iran etc… jobs are needed.
Companies should not just invest in schools and hospitals as a part of their CSR they should invest in the full value chain, provide opportunities for families to raise children all the way from childhood to adulthood to get good education and jobs. Many of these resource extraction companies are ready to make long term investments in their business, large oil and gas fields and mine are economic 15 to 30 year so long term CSR investments should fit that model. CSR is a long term process and organizations that don’t directly and properly make efforts and create strategies to help transform society will lose credibility and big opportunities to engage their stakeholders. I keep hearing that access opportunities for resource companies are harder to come by so it’s even more important that they embrace Porter Shared Value concept and CSR.
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