Corporate Social Irresponsibility

The 1989 Exxon Valdez oil spill gave rise to the corporate social
responsibility movement. The BP oil disaster may mark its collapse.

Over the past two decades, many organizations and investors have
conducted an experiment in corporate behavior modification. An array of
well-intentioned organizations promoted the idea that large corporations
could be made to do the right thing, by urging them to sign voluntary
codes of conduct and adopt other seemingly enlightened policies on
environmental and social issues.

At first, management met this
movement with resistance, but big business soon realized the advantages
of projecting an ethical image--so much so that corporate social
responsibility (known widely as CSR) is now used as a selling point by
many firms. Chevron's "Will You Join Us" ad campaign, for example,
apparently tries to convey the oil giant as a key player in global
efforts to save the Earth.

Businesses found that a socially responsible image could serve as a
buffer against aggressive regulation. While CSR proponents in the
nonprofit sector didn't pursue a deregulatory agenda, the image of
virtuous companies conveyed the message that strong government
intervention was unnecessary. CSR dovetails with the efforts of
corporations and their allies to undermine formal oversight of business
activities. This is what General Electric was up to when it ran its
"Ecoimagination" ads while lobbying to weaken air pollution rules
governing the locomotives it makes.

Recent events make it clear that a commitment to CSR can be too
cosmetic. The corporation at the center of the Gulf oil disaster, BP,
promoted itself as being socially responsible for many years. A decade
ago it adopted a sunburst logo, acknowledged that global warming was a
problem, and claimed to be going "beyond petroleum" by investing
(modestly) in renewable energy sources. What did all that social
responsibility mean if the corporation could still, as the emerging
evidence suggests, cut corners on safety in one of its riskiest
activities--deepwater drilling?

BP is hardly unique in violating its self-professed "high standards."
This year has also seen the moral implosion of Toyota, another darling
of the CSR world. Only months after the Prius producer was chosen by the
Ethisphere Institute as one of "the world's most ethical companies," it
was found that Toyota had failed to notify regulators or the public
about its defective gas pedals.

Goldman Sachs, widely despised these days for unscrupulous behavior
during the financial meltdown, was a CSR pioneer in the investment
banking world. In 2005 it was the first Wall Street firm to adopt a
comprehensive environmental policy (after being pressured by grassroots
organizations to do so), and it established a think tank on
environmental markets.

When the members of a corporate rogues' gallery all profess to be
socially responsible, the concept becomes meaningless. The best that can
be said is that these corporations may behave well in some respects
while screwing up royally in others--the way that Wal-Mart is supposedly
in the forefront of environmental reform while retaining its
Neanderthal labor policies. Selective ethics are no more tolerable for
corporations than they are for people.

BP must come clean, both literally and figuratively. The $20 billion
escrow fund is a good start, but the corporation must also provide a
full accounting of what went wrong in the Gulf and what it will do to
improve safety conditions in all its operations. You can let BP know
that true corporate social responsibility means more than cheery logos,
catchy slogans, and token gestures by taking action today at
StopCorporateAbuse.org/HallOfShame.