BP Company: strategy regarding
and non renewable energy
1-What are the main feature of BP’s past business strategy toward climate change and the energy production based on non renewable natural resources? What were the main rives behind this strategy?
Before 1997, BP’s management was not involve in climate change issue caused by the use of fossil fuels and did not want to recognize the link between economic activity and global warming. Indeed, the company was a member of the Global Climate Coalition, a group of 50 corporations and trade association partly denying the global warming and struggling against reductions in greenhouse gas emissions for its potential negative consequences on industries’ economic performances and employment. This coalition was developed after the United Nations created the Intergovernmental Panel on Climate Change (IPCC) in 1989 whose members were governments. GCC activities consisted in aggressive lobbying at international climate negotiation meetings raising concern about unemployment that would result from emissions regulations. It tried to influence journalists and had a great influence on US government, particularly in 1992 during the Earth Summit at Rio de Janeiro. In 1997 it went as far as launching an advertising campaign in the United States in response to the international warming treaty against any agreement in favour of greenhouse gas emission. In 1997, BP changed drastically its position since it withdrew from GCC after BP's chairman announced to the world its decision to accept that climate change was occurring and its intention to get involved in reducing BP's contributions to it. He emphasised that the time to react was not once the link would be proven. This way, he totally broke with the oil industry's position on greenhouse gas emissions and global climate change. Then, BP announced a strategy for reducing such emissions across the worldwide operations of the company. Policy options including energy taxes, carbon emissions trading, and joint implementations were proposed. BP began to form the contrarian position and decided to be an actor of change implementation in the environment field. The company invested in renewable energies and research to improve technologies and thus reduce energy consumption. BP is became a member of the pew research whose role consist in producing analyses of key climate issues, leading research on topics such as economic and environmental impacts and practical domestic and international policy solutions, informing policy makers and encouraging the business community to search for solutions. Then BP decided to improve its brand image focusing on its involvement in environmental issues and changing its name into “beyond petroleum” to claim its new position as an active player in the struggle against climate change and an involved company in the environmental stakes. It created BP alternative energy and is investing important amount of money in renewable energy. Many factors could have driven this strategy. First, the increasing pressure under the diverse industry put by environmental associations such as green peace in the 90s. Then, the dramatic break with other oil companies on the issue of global warming provided a diversion as well as a needed refurbishment for a reputation under attack on human rights grounds since in 1996 BP was accused of human rights violations in Colombia. With this first mover position, BP could earn a reputation of environmental friendly in a “diabolic” industry and gain a competitive advantage.
2- Evaluate the recent changes in the environmental strategy of BP from the point of view sustainability. How would you asses their beyond petrol campaign?
First of all, the scope of sustainability being very wide , it could be necessary to start from a definition of sustainability appropriate to the case in order to evaluate the changes in BP’s environmental strategy. The features of sustainability are:
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