Question

What is the relationship between business operations and CSR at BP? Does the organization consider CSR as obligatory or do they seek opportunities for CSR? In other words, is the organization reactive or proactive? What are some elements of corporate culture and policies that impact CSR? Examine the policies of BP such as the stated environmental policy, cultural diversity policy, equal employment opportunity (EEO), and so on.

Answer 1

The company bp, formerly known as “British Petroleum”, grew overtime into a multinational conglomerate, moving from a focus on oil to energy. This growth step allowed the company to begin investments in green technology, but is that really the reason?

Environmentalists have accused bp of “greenwashing”, in an attempt to cover up its primary business, which causes a massive amount of damage to the environment, such as the infamous Gulf of Mexico oil spill in 2010. Some multinationals shove environmental marketing in consumer’s faces to such an extent that it can be called “ecopornography”. Therefore, it is hard to determine if these companies manage any tension between CSR and shareholder returns since they follow this “marketing” path, which only confuses people to think they are green.

For bp, it rebranded itself after Helios, the Greek sun god, in an effort to indicate the company’s commitment to green energy and its purchase of Solarex, transforming bp to become the largest solar company in the world. bp also promoted its care for wildlife, with partnerships with the National Wildlife Federation and New York’s Urban Park Rangers. The term “beyond petroleum” emerged and bp incorporated the saying into all of its ads, which depicted a company doing right for the environment while unveiling a giant Helios logo. However, at the same time bp purchased Solarex, it also purchased ARCO for a whopping $26.5 billion dollars. Before I get too deep into this story of “greenwashing”, just know that bp won the Greenhouse Greenwash Award from Greenpeace, sounds fancy to me.

Business operations and CSR -

Corporate Social Responsibility is a small subset of the broadly defined business ethics.

CSR is heavily loaded on the social side - the scheme of helping the underprivileged section of the society (and many others) in a socially responsible and healthy way by sharing some of your profits. Looks highly ethical.

But CSR can be also used as a Marketing Technique - help those who need and can also afford your products - this way a market will open up for you. You not only help others but also open up markets for your own self. Still ethical? Maybe.

So the relation cannot be established by simply taking into account CSR as a reference term. We also need to look into the fact as to how it is being perceived.

CSR is obligatory -

Globally, businesses have been under pressure to demonstrate themselves as responsible entities trying to build an equitable society. Even in India, businesses having been going through a transformational phase, specially after the emergence of MNCs.

On part of the government, it wanted to bring about a cultural change within the businesses whereby they become committed towards societal welfare and environmental conservation. In lieu to this, India became the first country to mandate and quantify CSR into a legislation for businesses to adhere to.

Apart from this, the provision also organised the CSR sector wherein there are norms for penalising the companies and the people in-charge of CSR activities. This acts as a deterrence for companies which are unwilling to contribute towards CSR activities. Making it mandatory was also a step towards recognising the activities which can be considered as a CSR activity. Previously, the companies use to invest in activities which might not be much beneficial for the society. The Schedule VII of the Companies Act, 2013 lists all the activities which will be considered under CSR.

The mandate has made the businesses more committed towards social causes and there is also an engagement with the local communities which will ensure inclusive development in the long run.