When Christine Bader arrived at the Yale School of Management, she had no idea what she wanted to do. All the idealistic New Yorker knew was that the banks and consulting firms hoovering up her classmates were not for her. But when BP chief executive John Browne came to speak at the university in 1998, he had just become the first head of a major energy company to urge action around the realities of climate change. He seemed to be a different kind of oilman that was trying to create a different kind of energy company. Bader was so inspired that she signed up for a summer internship at the company’s headquarters in London, and was then hired full-time for a project developing a natural gas field in Indonesia. The next eight years took her around the world, working on human rights and environmental impact mitigation strategies for BP.
Although she eventually left the organization to help draft a set of guiding principles on business and human rights for the United Nations, Bader was feeling nostalgic about her time in corporate life until April 20, 2010, when the Deepwater Horizon rig exploded in the Gulf of Mexico. She has distilled her views on her time at BP in her book The Evolution of a Corporate Idealist: When Girl Meets Oil, released in March. Corporate Knights recently caught up with Bader to discuss the difficulties of trying to change corporate culture from the inside:
CK: What was your immediate reaction when you heard about the Deepwater Horizon disaster?
BADER: It was a very different BP from the one I knew that began to emerge in the press and in the hearings, one that was callous and reckless. It was the opposite of the BP that I was exposed to, which in my experience went above and beyond what was required by law to protect both people and the environment. So I really started to question whether I had made any difference at all, and whether my nine years at that company had all been for naught. So to try and reconcile BP’s and my own experience, I started talking to people that I’d gotten to know in other companies doing similar work.
We continue to face so many of the same challenges that this story of a global invisible army of idealists inside companies, of corporate idealists like me, really needed to be told. The public narrative after every corporate disaster, whether Deepwater Horizon or Rana Plaza or Enron, the knee-jerk reaction seems to be “oh great, another evil company.” What I wanted to do with my book was really shine a light on the people who are working deep inside these companies, trying to prevent the very disasters that sometimes ensue. I wanted to understand and pursue why we fail, despite our best efforts, and what we need to do in order to succeed.
CK: What is the value of outside opinion and perspective at companies like BP?
BADER: I think that external voices are really important, and I’ve seen companies introduce these in a number of different ways. One method that we used in Indonesia involved setting up a standing oversight panel. It was four eminent people, chaired by Senator George Mitchell, who reported directly to the CEO. They visited the site every year, and also consulted with stakeholders both there and in London. They wrote up a report that BP had no say over that BP then posted on its website. The panel held meetings in Washington, London and Jakarta to present their findings. And BP would always post its response.
We also consistently brought in experts to look at very specific projects. For example, because we had to do this resettlement, we found a guy who literally wrote the book on resettlement for the World Bank. We brought in several human rights experts to commission a human rights impact assessment, to interview stakeholders and make recommendations based on their knowledge of international standards and best practices. I think that’s what external voices are most valuable for, it’s that they have a much better sense of the big picture.
The most successful companies, from my perspective, shouldn’t be fully outsourcing all of their corporate social responsibility (CSR) work. If you do that, you eliminate any internal capacity to manage these issues. This is particularly true if something goes wrong. When there’s a crisis on the ground, you want staff that is able to react quickly and in the right way. Internal staff brings knowledge of the culture; they know who specifically in the company needs to be included in different conversations.
So the way that I’ve seen companies do sustainability or CSR/human rights really well is that they have a mix. They are building their own internal capacity, and might have some specialist in the topic but are constantly trying to figure out how to engage everybody across the company. But they are also using external voices strategically to help ensure that they are doing things according to the best possible standards out there.
CK: Have you found that direct access to management is a prerequisite for CSR success at a company?
BADER: It’s really the question that everybody who does this type of environmental, social and governance (ESG) work asks themselves once in a while: Was I more marginalized than I realized? Was I sitting at the kiddie table, but just didn’t notice it? What I realized, looking back, was the two main projects that I worked on directly – in Indonesia and in China – were such big, important, sensitive projects to the company that senior management was very interested in how we were going to manage the social and human rights risks. I had really good access when I was there, but I now realize that that isn’t always the case.
I think that the win for people doing this kind of work is to really embed their work in the core processes of the company. Leadership access is irrelevant if that occurs, because it has simply become the way the company does business. The tax auditors or risk managers inside a company certainly have CEO access if they need it, but the win isn’t how quickly you can get in to see the CEO. The win is that you don’t have to see the CEO because these processes are so well embedded that everybody in the company gets it. It’s fully integrated into the approvals process for a new project or a new venture.
CK: How do you make the case for the importance of environmental and social issues being at the forefront of corporate policy? Is it more of an ethical or financial argument?
BADER: For some people, the traditional financial case will always rule. However, for a lot of senior managers, these two factors come together in the form of risk mitigation. Looking back on my time in Indonesia, I now realize that part of why I had so much support for the sustainability and human rights work I was doing there was because there were some very dramatic examples nearby of how much it could cost if things went wrong. We were operating in the same province as the Freeport-McMoRan’s Grasberg gold and copper mine, which has seen decades of social strife. They have to spend tens of millions a year on security alone just for that mine – never mind all the community investment and other programs – because they didn’t pay attention to the needs of the local community when they first came in there. Now the financial case for the upside is beginning to be heard and is gaining momentum, but for now the case for risk-averse action remains the strongest one.
CK: Multinational corporations have begun to partner with NGOs and other civil society actors on the ground in many of these countries. Does this compromise the oversight role that NGOs have traditionally undertaken?
BADER: If a company goes into a remote environment with very little in the way of social infrastructure or social services and no partners, locals are just going to see them as a big ATM machine. So the company is put in this position of having to provide all these different social services, which the company is not equipped to do. So I think a company has to go in with partners, which is what we tried to do in Indonesia.
But this relationship remains a challenge, all the way down to the hiring of qualified staff that know the area. We hired somebody from the World Wildlife Fund in Papua New Guinea who was really good, but only because we needed people who were really equipped to serve as community liaisons. Unfortunately, this means that we were gutting the local capacity to staff other sorts of civil society organizations.
