16 January 2006The Sydney Morning Herald
What's one of the world's biggest problems? Global warming. What is its principal cause? Burning fossil fuels. Who makes and sells most of these? Oil companies. If you have any green blood in your veins, you wish that we could significantly reduce our dependence on oil and other fossil fuels like coal.
Over the past year or so in Europe and North America, the big oil companies have been trying to convince us that they are doing just this. For example, for most of last year in the Financial Times and other business publications, advertisements appeared saying that this or that oil company was really concerned about the problem. The campaigns that caught my eye were:
BP is going "beyond petroleum".
Chevron is asking "will you join us" in helping to produce "human energy?".
ExxonMobil is "taking on the world's toughest energy challenges".
Shell is asking us to "find out how they are helping".
Total is reminding us that "our energy is your energy".
A two-page advertisement in the Financial Times outlined the problem we all face. In a letter from "Dave", the chairman and CEO of Chevron, we are told that global demand is outstripping supply. He also tells us that companies, governments and every citizen on the planet must be part of the solution because they are part of the problem.
As an advocate to companies seeking to enhance their corporate reputations, I often suggest that they tell their stakeholders about their good deeds. There is a growing body of research that suggests the companies that people think are good community citizens are the ones that do good and then make sure that people know they are doing good. Corporate advertising is one such mechanism. But I draw the line with this crop of oil company advertisements.
The oil companies have a long, and not very distinguished, track record of self-interest when it comes to exploration, refining and distribution. And environmental groups have been exposing these exploits and criticising them for years. Recently some governments have also taken to publicly questioning these giant companies.
In November, the US Congress proposed a windfall profits tax on the oil industry. The big five oil companies had made a $US30 billion ($40 billion) profit in the previous quarter. During a hearing by the Senate's energy and commerce committees, the companies flatly rejected this social tax. Nothing surprising here.
However, what was surprising was that while the US senators were questioning the oil company chiefs, Dave O'Reilly from Chevron said the oil refiners needed environmental regulations to be relaxed. This plea is because US refining capacity is near its limit and much of the oil-refining technology is outdated.To highlight this problem, the US authorities are investigating a series of accidents in BP's old Texas facilities.
O'Reilly's comments, however, provide a window into Big Oil. Their investments in existing technology are so extensive that they have to "sweat the assets", as the saying goes, in order to achieve their profit targets. They are also a classic example of "greenwash" - the presentation of a company as environmentally friendly while continuing to deploy or advocate the use of destructive tactics in the background.
His comment, while presumably under oath, immediately calls into question the environmental preservation actions of all the oil companies. And it doesn't enhance the images of corporate advertising and the media that carry it.
Grahame Dowling is a professor in the Australian Graduate School of Management and the Australian representative of the US- and European-based Reputation Institute.
However, what was surprising was that while the US senators were questioning the oil company chiefs, Dave O'Reilly from Chevron said the oil refiners needed environmental regulations to be relaxed. This plea is because US refining capacity is near its limit and much of the oil-refining technology is outdated.To highlight this problem, the US authorities are investigating a series of accidents in BP's old Texas facilities.
O'Reilly's comments, however, provide a window into Big Oil. Their investments in existing technology are so extensive that they have to "sweat the assets", as the saying goes, in order to achieve their profit targets. They are also a classic example of "greenwash" - the presentation of a company as environmentally friendly while continuing to deploy or advocate the use of destructive tactics in the background.
His comment, while presumably under oath, immediately calls into question the environmental preservation actions of all the oil companies. And it doesn't enhance the images of corporate advertising and the media that carry it.
Grahame Dowling is a professor in the Australian Graduate School of Management and the Australian representative of the US- and European-based Reputation Institute.
