CSR - All Change at BP: New Era, New Responsibilities

The first few months of 2011 are providing us with some excellent resources to research CSR and this recent speech by Bob Dudley (the new CEO of BP) is a great example in point. The problems experienced by BP as a result of the Deepwater Horizon disaster are well documented and, frankly, the rights and wrongs of who did what are less relevant to business students than the impact of Deepwater Horizon on the strategy and culture of a huge multinational like BP…

The first section of the speech is well worth a detailed read. There are some telling paragraphs which help students understand how BP’s strategy has changed since the disaster. Dudley’s comments also include a nice summary of the responsibilities to the wide range of stakeholders which BP is now focusing on. Dudley explicitly lists the responsibilities which BP is taking on as follows:

We have a number of responsibilities.

We have a responsibility to the people of the Gulf Coast states who are still feeling the after-effects of the spill.

We have a responsibility to the US, and we are under no illusions about the task involved in rebuilding trust.

We have a responsibility to our employees, giving them reasons to believe in BP.

We have a responsibility to you, our industry colleagues, so you can have confidence in BP as a partner going forward.

We have a responsibility to share what we have learned, to demand more of ourselves and from our industry overall.

And we have a responsibility to our shareholders - to renew their faith in the value of our company and its ability to operate safely.

The speech is remarkable for Dudley’s honest admission of the lessons learned from Deepwater Horizon. He acknowledges that the disaster has fundamentally changed the firm…

Often the response to a tragedy defines the character of an organization. And I am determined that we will emerge from this accident as a company that is safer, stronger, more sustainable, more trusted and, in time, more valuable.

As well as meeting our commitments in the US, we have a duty to take what we have learned deeply into the fabric of our organization. It means strengthening the way we manage our operations and concentrating on the things that drive long-term value – safety, capability, technology, portfolio choices and relationships.

My emphases are in bold above. What Dudley is saying is that BP’s shareholder value can never truly recover until BP becomes a significantly more sustainable and trusted firm. Expect these core CSR principles to be top of the BP Board Meeting agenda for some time to come!