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Case Title:

BP: The Cost of Going Green

Publication Month and Year : 2010

Authors: A Sinha

Industry: Oil and Natural Gas

Region: US

Case Code: CSR0060IRC

Teaching Note: Not Available

Structured Assignment: Not Available


OR





Abstract:
In August 2006, British Petroleum (BP) the second largest oil company globally was forced to shut down its oil field in Alaska after a massive oil spill. Earlier, in 2005 an accident in BP's refinery at Texas caused a significant number of employee casualties. It was later revealed by an inspection committee, jointly operated by BP management, US safety officials and the Alaskan Senate, that the company failed to ensure minimum preventive measures to provide safety for its employees against environmental hazards. Analysts felt that it was astonishing that a company like BP, which made environmental protection and friendliness its core identity, failed to practice what it preached. In 1997, BP was the first company to express its concern for the risks of global warming and greenhouse effects. During the 1990s the company was able to reduce carbon emissions by 10%, re-branded itself with a new logo and new punchline, 'Beyond Petroleum', established an alternative energy division in 2005 and planned to invest $8 billion during 2005-2015 on renewable energy. Despite these innovative measures to project itself as a socially responsible and environment friendly company, BP failed to avoid criticism due to a series of environmental and safety lapses. In 2005, an explosion at one of the BP refineries in Texas City which killed 15 people and injured more than 170, was followed by a spillage of 200,000 gallons of crude oil near Prudhoe Bay (the largest spill in North Slope). Analysts criticised BP for environmental and safety lapses and accused its environmentally conscious image campaign of being a 'green-wash'.

Pedagogical Objectives:

  • The re-branding exercise of BP.
  • How the company imbibed the concern for environment and the green issue with its corporate identity
  • The image makeover exercises after the incidents and its plan to mitigate the contradictory thoughts.
  • It also raises the debate about whether BP's strategic move was an indicator of environmental leadership or an attempt to manage its reputation.

Keywords :  British Petroleum (BP), 'Beyond Petroleum', Texas oil refinery, Alaska oil field, Prudhoe Bay, Green BP, Carbon trading, Greenhouse effect, Global warming, BP-Arco merger, North Slope, Alternative energy, 'Pigging', Pipeline maintenance, Corrosion

 

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Structured Assignment:
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