The greening of big oil in China

PUBLISHED : Thursday, 01 January, 2004, 12:00am
UPDATED : Thursday, 01 January, 2004, 12:00am

Just as Amoco signs disappear from the American landscape, BP has rolled out a nationwide advertising campaign to announce its entrance into the US market. Ubiquitous television commercials feature consumers pontificating about the necessary evil of oil and imploring the industry to exploit cleaner renewable energy sources. The adverts then tout BP's commitment to the concerns raised by these supposedly average, everyday Americans.

In print and on billboards, advertisements have attempted to simplify BP's message, highlighting the most important points in florescent yellow: from the blunt 'cleaner fuels', to the trite 'harness the energy'.

Since acquiring Amoco in 1999, BP has aggressively rebranded itself 'Beyond Petroleum', recasting the company in a greener image. This newfound devotion to the environment is not completely altruistic, nor is it the primary motive for the name change. The company, still known to most of the world as British Petroleum, likely recognised it was economic suicide to be identified as a foreign entity in an increasingly ethnocentric US market, and thus assumed its new, geographically vague moniker.

Given the poor environmental track record of petroleum companies, it is easy to be sceptical about the recent wave of environmental corporate responsibility sweeping the industry. Cynics contend that BP and other petroleum companies are just standing under the shower of environmentalism for a quick - and disingenuous - 'greenwash'.

Nonetheless, that BP has acknowledged its weakness on environmental issues, and is going to great lengths to announce its dedication to the cause, is a good first step. The industry has made some inroads in adopting a more eco-friendly business strategy. Nowhere is this more apparent than in the increasingly environmentally conscious, and incredibly important, Chinese market.

China was at issue in a 2001 revolt of BP shareholders. Pointing to environmental and human-rights concerns in Tibet, a small but vocal group of shareholders filed a motion for BP to divest itself of a minority interest in Petrochina, China's largest petroleum company.

Not surprisingly, BP did not shed this asset, which is key to infiltrating the Chinese market. The resolution was, however, supported by more than 5 per cent of the vote, a real achievement in the usually unanimous world of corporate governance. This event put the company on the environmental hot seat, and BP was spurred to action in China. In 2002, BP began a US$10 million clean energies research project to boost its technical co-operation with Chinese scientists. Its competitors are also engaged in eco-friendly projects in China. ExxonMobil provided US$1.2 million to fund environmental education, and Shell has supported the development of non-governmental organisations in China.

In light of last week's Chongqing gas-well disaster, another petroleum industry project has been given even more importance: in partnership with the United Nations Development Programme, Shell completed a social and environmental impact assessment of pipeline construction, the first of its kind for a major infrastructure project in China.

Corporate responsibility driven solely by a company's initiative is rare. In China, petroleum companies are responding to a market that is increasingly concerned with the environment. Still, BP has played coy about its role in furthering environmental sustainability in China, claiming limited power to move the country in any desired direction. While BP alone cannot assure environmental sustainability in China, it must not take its influence lightly. During a visit to the US last month, the minister of China's State Environmental Protection Administration repeated his government's desire to balance economic growth with sustainable development and called on multinational corporations for advice and support.

Economic interests will always come first in China. But the nation is increasingly concerned with the environment. BP and other multinational corporations have the government's ear and must use this opportunity to nudge the country even further along to keep China on a course of sustainable development. Meaningful changes will come, too, when environmental pronouncements are given sufficient financial backing and implemented at all levels of industry.

Growing corporate interest in the environment is to be commended. But companies like BP must redouble their efforts and make a sustained commitment beyond one advertising campaign. For a green image to be genuine, it must not be given, but earned.

Timothy Hildebrandt is managing editor of the China Environment Series, an annual policy journal of the Woodrow Wilson International Centre for Scholars in Washington