In teaching this case, a major theme has to be BP’s rebranding efforts and how the company must strive to repair its damaged reputation in the wake of the Deepwater Horizon incident. While BP is not the only major energy company to suffer a reputational crisis, BP did realize more quickly than other companies that being perceived as an environmentally concerned energy company is far better for business than being seen as a big, dirty oil company. In 2005, BP was the first company in its industry to publicly state that climate change is real, and that it presents a dilemma for oil companies. Around the same time BP also launched its Alternative Energy division, which is devoted to renewable energy sources. Another important element in BP’s rebranding was its Code of Conduct—titled “Our Commitment to Integrity”—which gives legal expectations in five key areas: (1) health, safety, security, and the environment, (2) employees, (3) business partners, (4) government and communities, and (5) company assets and financial integrity.
Any headway that BP was making in its rebranding efforts came to an abrupt end on April 20, 2010. The findings from the resulting investigation revealed that BP cut short procedures and quality testing of the drilling equipment and pipes. A government panel investigating the crisis also concluded that BP, Transocean, and Halliburton—some of the major firms involved in the drilling—failed to adequately consider risks or communicate with one another on major decisions involving the well.
1. Analyze BP’s efforts to improve sustainability and its reputation prior to the Deepwater Horizon disaster. Was the company on the right track? Why or why not?
2. Because most BP products can be viewed as commodities, do you think consumers will avoid purchasing from BP because of its track record and the Deepwater Horizon disaster? Why or why not?
3. How can BP prove to its stakeholders that it is serious about social responsibility, sustainability, and ethics, and that its efforts are not just a public relations ploy? What strategic issues would you focus on in trying to repair the company's reputation?