Sustainable Development at British Petroleum

            
 
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Case Details:

Case Code : BECG056
Case Length : 18 Pages
Period : -
Pub. Date : 2006
Teaching Note :Not Available
Organization : British Petroleum
Industry : Oil and Chemical
Countries : United Kingdom

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"There are times when a company like BP needs to act long term in a way that may reduce short term profitability by investing in social issues that ultimately will create a positive environment for us to operate in." 1

- Graham Baxter, Vice President, Corporate Responsibility, BP in 2004.

"Our reputation, and therefore our future as a business, depends on each of us, everywhere, every day, taking personal responsibility for the conduct of BP's business." 2

- Lord Browne, Chief Executive Officer, BP in 2004.

Introduction

In the early 1990s, UK-based oil and chemical major, British Petroleum (BP), faced a crisis situation. The company had amassed a huge debt and its share price saw a drastic fall. BP also faced pressure from the external agencies to stop polluting the environment.

Lord Browne (Browne) who became CEO of the company in 1995 realized that the company needed to change its policies and re-brand itself if it had to survive in the industry.

In 1998, BP entered into a merger agreement with Amoco Oil Corporation (Amoco).3 Even before the merger, Amoco had framed policies to become environmental friendly. BP was inspired by Amoco's environmental friendly policies and after the merger, in 1999, adopted a new set of business policies based upon the best practices followed by both the companies. (Refer Exhibit I for Values and Policies of BP). BP became the first company in the oil industry to emphasize the need for Health, Safety, and Environmental (HSE) performance.

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On March 11 2002, while giving a speech at Stanford University on climate change, Browne said it would be necessary to take preventive measures to face climate change He also said BP would reinvent its energy business and would go 'Beyond Petroleum'.4

BP believed that its HSE performance would be vital for its success in the countries where it operated. In 2002, BP underwent significant changes to project itself as a 'green' company.

The company re-branded its logo - changing it from a green shield to the white, green, and yellow sunburst logo of Helios5 (Refer Exhibit II on the old and new logos of BP). The company also changed its name to 'bp', without any meaning being attached to the letters.6

It incorporated a new catchphrase "Beyond Petroleum". These changes reflected the company's concern for the environment and its entry into renewable sources of energy.

Sustainable Development at British Petroleum - Next Page>>

1] Robin Knight, "Good Behavior," www.bp.com, The BP Magazine, Issue 02, 2005.

2] Code of Conduct, www.bp.com

3] Amoco Oil Corporation was a global oil and gasoline conglomerate founded in 1889 by John Rockefeller. The company was initially incorporated as Standard Oil of Indiana which was formed from the break-up of Standard Oil Co.

4] Atle Christer Christiansen, "Beyond Petroleum: Can BP Deliver," http://www.fni.no/pdf/FNI-R0602.pdf, June 2002.

5] Helios is the sun god in Greek mythology.

6] The company thought that the upper case BP gave an imperialist impression. By shifting to 'bp' which was in lower case, the company wanted to project itself as a friendly company.

 

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