Archive for the ‘environment’ Category
The Oil Sands, and the Battle of the Boycotts
Filed under: accountability, boycott, consumers, CSR, environment, protest |
Comments (10) 
The Athabasca oil sands (in Alberta, Canada) are not pretty. But they are vast, constituting one of the largest deposits of oil in the world — something in the range of 150 billion barrels, enough to help make Canada a net exporter of oil.
The oil sands (also known, colloquially and sometimes pejoratively, as the “tar sands”) are also environmentally controversial. The process of extracting oil from oil sands is not a clean one; it has a significant impact on land, air, and water. In fact, the process is so messy that it is only worth doing when the price of oil is relatively high, as it is right now. For environmental groups and other critics, the oil sands are just not worth it.
It’s worth noting that the oil sands do have their defenders. Matt Ridley, for example, in his recent book, The Rational Optimist, argues that the oil sands are a much more sane solution to current energy needs than things like wind (too unreliable and too little output) and biofuels (wasteful use of land).
Back in July, two US-based groups (Forest Ethics and Corporate Ethics International) called for a boycott of Alberta as a tourism destination. (See the Financial Post story, here.) More recently, though, the boycott has expanded to include a number of American retailers who have promised to refuse to use any petroleum products from the oil sands. See the Scientific American story, by Tina Casey, Boycott of Petroleum Products from Alberta Tar Sands Gathers Steam:
In a sign of things to come for corporate activism, The Gap, Timberland, Levi Strauss and Walgreens have just joined Whole Foods and Bed, Bath and Beyond in a boycott of petroleum products sourced from the notorious Alberta Tar Sands. As reported by Bob Weber of The Canadian Press, Federal Express has also adopted a policy that appears to lead toward joining the boycott….
(A more recent story suggests that Levi Strauss is not, in fact, participating in the boycott.)
A few points:
First, I’m generally skeptical about boycotting an entire jurisdiction (as the original boycott of Alberta tourism seemed to intend) on the grounds that you don’t like one particular business there. It’s entirely unclear how boycotting Alberta tourism was supposed to convince the government of the province to shut down the oil sands. (Note that while tourism is not exactly trivial in the Albertan economy, neither is it crucial. And besides, international visitors to Alberta account for just 7% of the province’s tourism.) Note also that the principle supposedly at play here doesn’t generalize very well. If you don’t like Walmart, do you boycott Arkansas, where Walmart is headquartered? Is anyone calling for a boycott of the U.K.? After all that’s where BP is based.
But I’m even more interested in the corporate boycott by Whole Foods etc.
As this opinion piece points out, anyone thinking of boycotting oil from the oil sands needs to think about what they’re choosing instead:
Where are they going to buy their gas from, if not Canada?
Saudi Arabia? Could there be a more unethical barrel of oil than one from that racist, misogynistic, terror-sponsoring dictatorship? Venezuela, to enrich strongman Hugo Chavez? Iran, with its nuclear plans?
In other words, if you’re really going to get picky about where your oil comes from, you’d better just stop using it at all.
The same opinion piece (by Ezra Levant) pointed out that many of the companies participating in the boycott are not exactly angels themselves. Walgreens (a pharmacy chain) was fined $35 million for defrauding Medicaid. And pretty much everyone knows that The Gap has been the target of its fair share of criticism over the labour practices at the third-world factories that produce the clothes it sells. Now, being hypocritical doesn’t mean being wrong, but it might well lessen these companies’ moral authority somewhat. (And notice that Levant suggests a tit-for-tat boycott of The Gap, etc., by Albertans.)
Next, an economic point. I’m no economist, but my guess is that if the corporate boycott has any impact at all, it will be roughly as follows. The reduction in demand for oil-sands oil will reduce the price it can command. And when you lower the price of something? Yup, you make it easier for other people to buy it. So, more — not less — will end up being used.
Finally, the points above leave us with the conclusion that the corporate boycott of oil from the oil sands is largely symbolic. Well, that’s not necessarily a bad thing, is it? I guess that depends on who is sending, and who is receiving, that symbolic message. And in this case, the message certainly isn’t going to have — indeed, can’t possibly be intended to have — any effect on decision-makers in Alberta. So the only real possibility is that Whole Foods, The Gap, etc., are sending a message to consumers. What message? “We’re green,” I guess, or “We care.” But the message being heard by anyone looking at this carefully is, “We haven’t thought this through.”
[Thanks to MW for suggesting I blog on this.]
BP and Corporate Social Responsibility
Filed under: consumers, corporations, CSR, energy, environment, honesty, shareholders, stakeholders |
Comments (12) I’ve long been critical of the term “CSR” — Corporate Social Responsibility. (See for example my series of blog postings culminating in my claim that “CSR is Not C-S-R”.) Too many people use the term “CSR” when they actually want to talk about basic business ethics issues like honesty or product safety or workplace health and safety — things that are not, in any clear way at least, matters of a company’s social responsibilities.
But the BP oil spill raises genuine CSR questions — it’s very much a question of corporate, social, responsibility.
BP is in the business of finding oil, refining it, and selling the gas (and propane, etc.) that results. In the course of doing business, BP interacts with a huge range of individuals and organizations, and those interactions bring with them ethical obligations. Basic ethical obligations in such a business would include things like:
a) providing customers with the product they’re expecting (rather than one adulterated with water, for example),
b) dealing honestly with suppliers,
c) ensuring reasonable levels of workplace health and safety,
d) making an honest effort to build long-term share value,
e) complying with environmental laws and industry best practices, and so on.
Most of those obligations are obligations to identifiable individuals (customers, employees, shareholders, etc.). There’s nothing really “social” about those obligations (with the possible exception of compliance with law, which might better be categorized as an obligation of corporate citizenship, or more directly an environmental obligation). And it’s entirely possible that BP, in the weeks leading up to the spill, met most of those ethical obligations. The exception, of course, is workplace health and safety — 11 workers were killed in the Deepwater Horizon blowout. But even had no one been killed or even hurt during the blowout, a question of social responsibility would remain.
So, what makes the oil spill a matter of social responsibility? Precisely the fact that the risks (and eventual negative impacts) of BP’s deep-water drilling operations are borne by society at large. The spill has resulted in enormous negative externalities — negative effects on people who weren’t involved economically with BP, and who didn’t consent (at least not directly) to bear the risks of the company’s operations.
Now, all (yes all) production processes involve externalities. All businesses emit some pollution (directly or indirectly via the things they consume) and impose some risks on non-consenting third parties. So the question of CSR has to do with the extent to which a company is responsible for those effects, and (maybe) the extent to which companies have an obligation not just to avoid social harms (or risks) but to contribute socially (beyond making a product people value). From a CSR point of view, then, the question with regard to BP is whether the risks taken were reasonable. Most of us would say “no.” But then most of us still want plentiful cheap gas.
Thus the BP oil spill provides an excellent way to illustrate the way we should understand the scope of the term “corporate social responsibility,” and how to keep that term narrow enough for it to retain some real meaning.
———-
p.s., here are a few relevant bits of reading:
1) Did you know that, in 2005, BP made it onto the Global 100 list of the “Most Sustainable Companies in the World”, a feat the company repeated in 2006. (And yes, that’s a reason to be skeptical about such rankings!)
2) See also this bit on Which is the Most Ethical Oil Company?
3) And finally here is BP’s own take on CSR, from 2002, see this speech: The boundaries of corporate social responsibility
———-
Addendum:
Here are a few books on ethics & CSR in the oil industry. No endorsement is implied.
- Drowning in Oil: BP & the Reckless Pursuit of Profit
- Corporate Social Responsibility Failures in the Oil Industry
- Price of Oil: Corporate Responsibility and Human Rights Violations in Nigeria’s Oil Producing Communities
- The Tyranny of Oil: The World’s Most Powerful Industry–and What We Must Do to Stop It
Wind Turbine Hush Money
Filed under: energy, environment, health, protest, regulations |
Comments (14) 
In Oregon, the “whoosh, whoosh, whoosh” of wind turbines is being partly drowned out by another sound: “Hush, hush, hush….”
What are we to think when a company starts paying people substantial sums of money not to complain about the effects of their projects? Is that illicit hush money, or is it a company facing up to its impact and paying due compensation?
Here’s the story, by William Yardley, for the New York Times: Turbines Too Loud? Here, Take $5,000.
IONE, Ore. — Residents of the remote high-desert hills near here have had an unusual visitor recently, a fixer working out the kinks in clean energy.
Patricia Pilz of Caithness Energy, a big company from New York that is helping make this part of Eastern Oregon one of the fastest-growing wind power regions in the country, is making a tempting offer: sign a waiver saying you will not complain about excessive noise from the turning turbines — the whoosh, whoosh, whoosh of the future, advocates say — and she will cut you a check for $5,000.
“Shall we call it hush money?” said one longtime farmer, George Griffith, 84. “It was about as easy as easy money can get….”
The effects that a production process (such as a wind farm) has on people other than its paying customers are what are called “externalities” — effects that are external to some voluntary transaction. And in principle, compensating those who suffer externalities is the right thing to do — it means that a company (and its customers) are paying something closer to the full cost of production. Otherwise, externalities amount to a cost foisted on someone else involuntarily.
OK: so far, so good. The company involved here is attempting to (as an economist would put it) internalize its externalities, by compensating those affected by noise from its windmills. But what about the price set? Note that the price was an apparently invariable $5,000. Why? After all, different people are likely to be affected differently, and some will be more noise-tolerant than others.
So, why one price? According to the company, the reason is fairness:
“What we don’t do in general is change the market price for a waiver,” [Caithness Energy’s] Ms. Pilz said. “That’s not fair.”
Of course, equal payment for all is one version of fairness, but it’s not the only one.
One last theme to pick up on is the tension between what’s good for the individual and what’s good for society. The company involved, here, attempted to play the “social good” card:
Some people who did not sign said that Ms. Pilz made them feel uncomfortable, that she talked about how much Shepherd’s Flat would benefit the struggling local economy and the nation’s energy goals, and that she suggested they were not thinking of the greater good if they refused.
It’s a good rhetorical move on the company’s part, not least because there’s more than a grain of truth to it. A project of this size is bound to benefit the local economy (though perhaps not as much as locals might hope). Add to that the fact that this is, after all, clean energy that’s being produced, the kind of energy that most people now figure is essential to weaning us off our collective addiction to petroleum products.
So, let’s put this on the table as a fundamental truth: there are no centralized forms of energy production, clean or otherwise, that will not have a negative impact on anyone, and that hence won’t be subject to someone’s objections. So the question is not whether anyone will be negatively affected (or even merely inconvenienced), but rather who will be negatively affected, and how much, and what to do about it.
Interview: Andrew Potter and The Authenticity Hoax
Filed under: advertising, books, environment, food, greenwashing, health, honesty, labelling, natural |
Comments (38) 
My pal Andrew Potter is a public affairs columnist with Maclean’s magazine (Canada’s premier newsweekly) and a features editor with Canadian Business magazine. He also has a Ph.D. in Philosophy.
Andrew’s new book, The Authenticity Hoax, is excellent. I interviewed Andrew recently, about the implications the issues discussed in his book have for a range of topics in Business Ethics.
————–
Chris MacDonald: Your new book, The Authenticity Hoax, is about the way our pursuit of authenticity is in many ways the pursuit of a mirage, and you argue that the pursuit of it is ultimately not just futile, but destructive. You say that one element of that — or is it a result? — is a lack of faith in the market. Presumably that plays out, in part, in a perception that business quite generally is unethical, on some level. Is that one of the deleterious effects of the pursuit of authenticity?
Andrew Potter: According to the theory I offer in the book, the quest for the authentic is largely a reaction to four aspects of the modern world: secularism, liberalism, technology, and the market economy. And I think you’re right, that hostility towards the market is probably the most significant of these. Why is that? That’s a whole other book! Though I think something like the following is at work:
First, markets are inherently alienating, to the extent to which they replace more gregarious and social forms of interaction and mutual benefit (e.g. sharing or gift economies, barter, and so on) with a very impersonal form of exchange. The second point is that the market economy is profit driven. This bothers people for a number of reasons, the most salient of which is that it seems to place greed at the forefront of human relations. Additionally, the quest for “profit” is seen as fundamentally amoral, which is why — as you point out — the mere fact of running a business or working in the private sector is considered unethical. Finally, you can add all the concerns about sustainability and the environment that the market is believed to exacerbate.
The upshot is that we have a deep cultural aversion to buying things on the open market. We think we live in a consumer society, but we don’t. We live in an anti-consumer society, which is why we feel the need to “launder” our consumption through a moral filter. That, I think, is why so much authenticity-seeking takes the form of green- or socially conscious consumerism.
CM: Claims to authenticity are a standard marketing gimmick at this point. In The Authenticity Hoax, you argue that authenticity isn’t the same as truth. Authenticity has more to do with being true to some essence, some deeper self. It strikes me that that makes for some very slippery advertising, including lots of claims that can’t be backed up, but can’t be disproven either. Is authenticity the ultimate marketing gimmick that way?
AP: Absolutely. What advertising and politics have in common is that they are both “bullshit” in the philosophical sense of term (made popular by Harry Frankfurt). What characterizes bullshit is that it isn’t “false”, it is that it isn’t even in the truth-telling game. That is why I think Stephen Colbert was dead on when he coined the term “truthiness” to refer to political discourse — he essentially means that it is bullshit.
What is interesting is that authenticity has the same structure as bullshit, in the following way: from Rousseau to Oprah, the mark of the authentic is not that it reflects from objective truth in the world or fact of the matter. Rather, the authentic is that which is true to how I feel at a given moment, or how things seem to me. As long as the story I tell rings true, that’s authentic.
And that fits in well with advertising, since advertising is all about telling a story. Everyone knows that most advertising is bullshit — for example, that drinking Gatorade won’t make you play like Jordan, or that buying a fancy car won’t make you suddenly appealing to hot women. But what a good brand does is deliver a consistent set of values, a promise or story of some sort, which fits with the idealized narrative of our lives, the story that seems true to us. That is why branding is the quintessential art form in the age of authenticity. Bullshit in, authenticity out!
CM: There’s an irony, of course, in the fact that so many companies are making claims to authenticity in their advertising and PR, since for most people the very term “PR” implies a kind of spin that is the exact opposite of authenticity. But that apparent irony echoes a theme from your previous book, The Rebel Sell (a.k.a. Nation of Rebels), doesn’t it? In that book, you (and co-author Joe Heath) argued that all supposedly counter-cultural movements and themes — things like skateboarding, hip-hop, environmentalism, and now add authenticity — are bound to be co-opted by marketers as soon as those ideas have gathered enough cultural salience. Is that part of what dooms the individual consumer’s pursuit of authenticity?
AP: Yes, that’s exactly right. Chapter four of my book (“Conspicuous Authenticity”) is a deliberate attempt to push the argument from the Rebel Sell ahead a bit, to treat “authenticity” as the successor value (and status good) to “cool”.
We have to be a bit careful though about using the term “co-optation”, because it isn’t clear who is co-opting whom. Both cool-hunting and authenticity-seeking are driven not by marketers but by consumer demand, in particular by the desire for status or distinction. And in both cases, the very act of marketing something as “cool” or as “authentic” undermines its credibility. Authenticity is like charisma — if you have to say you have it, you don’t.
That doesn’t mean marketers can’t exploit the public’s desire for the authentic, but it does mean they have to be careful about the pitch they employ; it can’t be too self-conscious. We all know that “authentic Chinese food” just means chicken balls and chow mein, which is why I actually think that things that are explicitly marketed as “authentic” are mostly harmless. It’s when you when you come across words like “sustainable”, or “organic,” or “local” or “artisanal”, you know you’re in the realm of the truly status-conscious authentic.
CM: I’ve got a special interest in ‘greenwashing.’ It occurs to me now that accusations of greenwashing have something to do with authenticity. When a company engages in greenwashing, they’re typically not lying — they’re not claiming to have done something they haven’t done. They’re telling the truth about something ‘green’ they’ve done, but they’re using that truth to hide some larger truth about dismal environmental performance. When companies greenwash, they’re using the truth to cover up their authentic selves, if you will. Do you think the public is particularly disposed to punish what we might think of as ‘crimes against authenticity?’
AP: I’m not sure. It is certainly true that in extreme cases of corporate bad faith the public reacts badly. The case of BP is a good example; as many people have pointed out, its “Beyond Petroleum” mantra is a very tarnished brand right now, and it is doubtful they’ll be able to renew its polish.
But at the same time, I don’t see any great evidence that the public as a whole is disposed to punish companies for greenwashing. Actually, I think the exact opposite is the case: I think the public is very much disposed towards buying into the weakest of greenwash campaigns. The reason, I think, goes back to the point I made earlier about most of us being fairly ashamed of living in a consumer society. Yet at the same time we like buying stuff, especially stuff that makes us feel good about ourselves and morally virtuous. Even the most half-witted greenwashing campaign is often enough for consumers to give themselves “permission” to buy something they really want.
CM: Let’s talk about a couple of product categories for which claims to authenticity are frequently made.
First, food. You argue that much of the current fascination with organic food, locally-grown food, etc., is best understood as the result of status-seeking. So the idea is basically that food elites start out looking down on everyone who doesn’t eat organic. But then as soon as organic becomes relatively wide-spread, suddenly eating organic doesn’t make you special, and so the food elite has to switch to eating local, or eating raw, or whatever else to separate themselves from the masses. And I find that analysis pretty compelling, myself. But a lot of devotees of organic and local foods are going to reject that analysis, and object that they, at least, are eating organic or local or whatever for the right reasons, not for the kind of status-seeking reasons you suggest. And surely some of them are sincere and are introspecting accurately. Does your analysis allow for that possibility?
AP: Sure. The key point is that these aren’t exclusive motivations. In fact, they can often work in lockstep: You feel virtuous eating organic, but you also want to feel more virtuous than your neighbour (moral one-upmanship is still one-upmanship, after all). And so you try to out-do her by switching to a local diet. And when she matches you and goes local too, you ratchet up the stakes by moving more of your consumption to artisanal goods (e.g. small-batch olive oil, handmade axes, self-butchered swine, and so-on).
And this would be a good thing if there were any evidence that these moves actually had the social and environmental benefits that their proponents claim for them. But unfortunately, the evidence is – at best – mixed; the more likely truth is that the one-upmanship angle has completely crowded out the moral calculations.
The more general point is that we need to stop assuming that something that gives us pleasure, or feeds our spiritual needs, will also be morally praiseworthy and environmentally beneficial. That assumption is one of the most tenacious aspects of the authenticity hoax, and it is one that we have no reason to make. There are good and bad practices at the local level, and artisanal consumption has its costs and benefits. Same thing for conventional food production — there are good things and bad things about it. It would be nice if the categories of good versus bad mapped cleanly on to the categories of local versus industrial, but they simply don’t. The belief that they do is nothing more than wishful thinking.
CM: What about alternative therapies? Much of the draw of those products — and at least some of their marketing — seems to revolve around authenticity. People who are attracted to alternative products seem to want to reject modern medicine, which they find alienating, in favour of what they perceive as something more authentic. Now most critics of alternative therapies such as homeopathy primarily object that there just isn’t good evidence that those therapies actually work. But your own analysis provides a further kind of criticism, rooted in the way that those who seek ‘authenticity’ via alternative medicine are engaged in what is more generally an unhealthy rejection of modernity. Is that right?
AP: There is a lot to dislike about modernity, and my argument is not that we should just suck it all up and live with it. My point is rather that modernity is about tradeoffs, and that we need to accept that for the most part, the tradeoffs have been worth making. Yes, some things of value have been lost, but on the whole I think it’s been worth it.
But if there is one part of the pre-modern world that is well lost, it’s the absence of evidence-based medicine. Yet for some bizarre reason, the longer we live and the healthier we get, the more people become convinced that we are poisoning ourselves, and that modern medicine is not the solution to our woes, but part of the cause.
The turn away from the benefits of modern medicine is one of the most disturbing and pernicious aspects of the authenticity hoax. My book has been interpreted by many as an attack on “the left”, but it perplexes me that things like naturopathy, anti-vaccination campaigns, and belief in the health benefits of raw milk are considered “left wing” or “progressive” ideals. As far as I’m concerned, this is part of a highly reactionary political agenda that rejects many of the most unimpeachable benefits of the modern world. We know that naturopathy and homeopathy is a fraud; we know that vaccines don’t cause autism and that public vaccination is the one of the greatest public health initiatives ever; we know that pasteurization has saved countless lives over the years.
But for reasons I cannot fathom, these and many other related benefits are ignored or shunned in favour of an “authentic” lifestyle that is an absolute and utter hoax.
Boycotting BP is Futile and Unethical
Do not boycott BP.
I know you’re mad. I am too. But a boycott won’t accomplish any of the things you’re trying to accomplish. And it’s unethical.
The push to boycott BP (as a punitive response to the Deepwater Horizon oil spill, obviously) comes from the advocacy group Public Citizen, which encourages you to: “Boycott BP: Take the Beyond BP Pledge today!” There’s also the inevitable Facebook group, Boycott BP.
This move is well-intentioned, but entirely wrong-headed, for a number of reasons.
The first reason has to do with alternatives. Sharon Begley at Newsweek, with the sarcastic title “Boycott BP! Because it’s much better to give your money to Exxon.” It’s highly unlikely that those who participate in this boycott are going to eschew gas purchases altogether. With a few exceptions, they’re much more likely to simply start buying their gas at the non-BP station down the street. And, as Begley points out, as far as the oil companies providing the oil go, good luck finding one that meets your high ethical standards — or even minimally decent ones. Every oil company you can name is in roughly the same moral category. So boycotting BP just means jumping out of the frying pan and into the fire.
Second, there’s the fact that a boycott of BP gas stations won’t actually hurt the organization you’re trying to hurt. In practice, “boycotting BP” means boycotting BP-branded retail outlets. And as an editorial in the LA Times pointed out, “BP stations are independently owned, so a boycott hurts individual retailers more than London-based BP.” So, sure, boycott BP stations — that is, if your goal is to hurt a bunch of small businesses already operating on razor-thin profit margins. Put a few minimum-wage gas jockeys and cashiers out of work. The difference simply will not be felt at BP’s head office. (The same naturally goes for vandalism of BP stations, which is both unethical and criminal.)
Finally, there’s the question of tokenism. Buying gas for your car is far from the only way many of us indirectly buy from BP on a regular basis. As “DanH” points out in the Comments section of this blog entry, (see comment at June 3rd, 2010 2:52 pm) BP also makes home-heating fuel, airline fuel, ingredients for plastics, and the natural gas from which much electricity is generated. Oh, and solar panels — BP makes those, too. If you want to make this boycott real (which you shouldn’t) you’ve got to boycott those things, too.
Can consumers take action? Sure they can, by doing things — long-term things — to reduce their reliance on fossil fuels. They can also write their elected representatives to encourage tougher regulation of risky practices like deep-water drilling. And so on. I know, I know: in the immortal words of Homer Simpson, “But I’m mad now!“ Well, then direct the righteous indignation you’re feeling now toward change that will make the world better for the future.
It’s fine to be angry about this disastrous oil-spill. Being angry is entirely appropriate. And it’s good to want to do something. But do the right thing, not the first thing that comes to mind.
(Tip of the hat to AP.)
BP: Not Really “Beyond Petroleum,” Just Greenwash After All
When British Petroleum rebranded itself a few years ago as just “BP,” it adopted the tagline “Beyond Petroleum,” in an attempt to signal a commitment to new energy technologies, and to new ways of doing business.
Of course, there were skeptics. Back in 2000, CorpWatch had this to say about the rebranding:
BP’s re-branding as the “Beyond Petroleum” company is perhaps the ultimate co-optation of environmentalists’ language and message. Even apart from the twisting of language, BP’s suggestion that producing more natural gas is somehow akin to global leadership is preposterous. Make that Beyond Preposterous.
So, the accusation was basically one of greenwash — essentially, an attempt to mask a lousy environmental record with a thin patina of environmental commitment. Had I commented back in 2000, I might have suggested that it was too early, then, to confidently accuse the company of greenwash. Sometimes companies do undergo substantial changes — changes in policy, in culture, and in leadership. The worry then is that if we criticize or mock a company’s stated intention to turn over a new-and-greener leaf, we may actually be doing more harm than good by taking the wind out of the sails of what might actually be positive change.
OK, fast-forward to 2010, to the biggest oil spill in U.S. history and to the Center for Public Integrity stating that BP accounts for “97 percent of all flagrant violations found in the refining industry by government safety inspectors over the past three years”.
Greenwashing? Case closed, as far as public opinion of BP is concerned. And perhaps more importantly, it now becomes just that much harder for the public to take seriously any big company’s claim that it really wants to improve its environmental performance.
The BP Disaster: Regulating (and Managing) Complexity
Filed under: complexity, disaster, environment, management, product safety, regulations, technology |
Comments (3) 
In my previous blog posting on the BP oil-rig disaster, I pointed to the disaster’s ethical complexity, measured in the sheer number of relevant ethically-interesting questions that we might be interested in.
But the issue of complexity arises in a much more straightforward way in the BP disaster, namely in the fact that the oil rig on which the disaster took place was itself a terrifically complex piece of technology.
See this nice piece by Harvard economist Kenneth Rogoff, The BP Oil Spill’s Lessons for Regulation.
The accelerating speed of innovation seems to be outstripping government regulators’ capacity to deal with risks, much less anticipate them.
The parallels between the oil spill and the recent financial crisis are all too painful: the promise of innovation, unfathomable complexity, and lack of transparency (scientists estimate that we know only a very small fraction of what goes on at the oceans’ depths.) Wealthy and politically powerful lobbies put enormous pressure on even the most robust governance structures….
Rogoff’s point is about regulation, but it could just as easily be about management, and/or the relationship between the two. And to Rogoff’s examples of complexity-driven disasters, you can add Enron and a couple of NASA shuttle explosions. Now, none of these cases can be explained entirely in terms of the difficulty of managing complex systems; each of those cases include at least some element of bad judgment and probably unethical behaviour. But in each of them one of the core problems was indeed complexity — either for those inside the relevant organizations or for those outside trying to understand what was going on inside. When systems (financial or mechanical) are mind-numbingly complex, it becomes all the easier for poor judgment to produce catastrophic results. It also makes for good places to hide unethical behaviour.
So, if we’re going to build fantastically complex systems, we also need to learn how to manage those systems in highly-reliable ways. In other words, we need management systems — effectively, social technologies — that are as sophisticated as the physical and economic technologies they are intended to govern. We already know a fair bit about error-reduction and the design of high reliability organizations. Aircraft carriers are a standard example of one type of seriously complex organization that, through careful design of management systems, has managed to achieve incredibly high levels of reliability — i.e., incredibly low levels of error, despite their complexity. Similar thinking, and similar design principles, could presumably be applied pretty directly to the design and management of oil rigs. Presumably, that’s already the case to at least some extent, though as BP has proven, more needs to be done. The bigger question is whether business firms are ready and able to apply those principles to the design of all of their complex systems — whether mechanical or financial — such that we can continue to reap their benefits, without suffering catastrophic losses.
(Thanks to Kimberly Krawiec for showing me Rogoff’s article.)
Questions About the BP Oil Disaster
There’s been an enormous amount of reporting and commentary about the disaster at BP’s Deepwater Horizon oil rig and the ensuing oil spill. One of the challenges of blogging about this story, from an ethics point of view, is figuring out where to begin. The story of the Deepwater Horizon is such a rich and complex one that Business Ethics profs will be teaching this case for decades.
Of course, what questions we need to ask depends in large part on what our purposes are. But the meta-question (“Which question is the right question?”) is still worth asking, not least because at least some of the questions currently being asked may not be a) fruitful or b) answerable.
So, what’s the right question to be asking about the worst oil spill in U.S. history?
Here’s a very incomplete list of possible questions:
- Who is to blame? BP’s CEO? BP as a whole? The rig’s foreman? The crewmembers directly involved? Transocean (the owner of the rig)? Halliburton (subcontractor for a crucial element of the drilling operation)? The U.S. Government’s Minerals Management Service? Or, more appropriately, we could ask: what’s the right way to apportion blame among those individuals and organizations?
- What role did the pursuit of profit play? Are there other, more important, ideas likely to have influenced the mind-set of the persons most directly responsible?
- Who is (ethically) responsible for cleaning up the mess — BP? The U.S. government? Coastal state governments? (Note that that question is in principle different from the one above.)
- What penalties should companies pay in the aftermath of an oil spill? (See the discussion at the excellent Marginal Revolution blog, here.)
- Is there anything ethically unique about the Deepwater Horizon disaster, or is it “just” another disaster like others we’ve seen before?
- Assuming that oil spills, big or small, are more-or-less inevitable, are such spills an acceptable cost of our unfortunate addiction to oil? As the old saying goes, “you can’t bake a cake without breaking a few eggs.” Does that apply here?
- What cultural factors within BP are likely to have played a positive or negative role? Or, since most of us don’t know much about the corporate culture at BP, what might be the crucial variables here? What should we want to know about BP’s (or Halliburton’s) corporate culture?
- If you were a senior executive at another oil company, how would or how should your day tomorrow look different than a randomly-selected day before the blowout on the Deepwater Horizon? That is, is there anything for other companies to learn, here?
- Beyond the massive cleanup to be carried out over the coming years (and it will be years), what should be on BP’s agenda for the next few years? What should BP (and Transocean and Halliburton) learn from this?
- Does this incident prove that regulations are too lax? After all, no system of regulation is perfect. Even tough laws against murder don’t bring the murder rate to zero. Did this disaster happen because of, or in spite of, the current regulatory regime?
- Would your own moral reaction to the Deepwater Horizon spill be different if you were an employee of BP (say, an employee not directly involved)? Or if you were a BP shareholder?
- Should shareholders in BP feel bad about this? If you think they should feel bad, should they feel more, or less, responsible than, say, BP’s customers?
So, if there’s anything to be learned from this disaster, what questions should we be asking?
I should add the one thing I know for sure about the questions listed above: none of the presents an easy, obvious answer.
Greenwashing the Tar Sands
Regular readers will know that I have an interest in what’s often referred to as “greenwashing”.
Here’s a good example. An ad for Suncor (a big Canadian energy company) appeared in a recent issue of Canadian Business Magazine (May 10, p.24). The ad includes the obligatory green imagery (excerpted at left). The text of the ad reads as follows:
“As Canada’s premier integrated energy company, Suncor has achieved success by seening the possibilities. Developing Canada’s oil sands, as well as energy resources from coast to coast and beyond, brings us even more opportunity to take action on environmental issues. Just as innovation made oil sands production viable, new technology is helping us reduce our impact on air, land and water. For Suncor, seeing the possibilities is the first step towards responsible development.”
What makes this greenwash? Well, to start with, there’s the green imagery and allusions. The pretty picture, and the vague reference to “taking action on environmental issues,” etc. Put that against the backdrop of Suncor’s reality: the oil sands (a.k.a. “tar sands”) are an undeniably dirty source of energy, and more generally the company’s environmental record is far from stellar. Now, it’s worth noting that this ad goes beyond mere associative advertising. Suncor isn’t just trying to put its name next to a pretty picture of trees and fluffy clouds. The ad cites stats. In particular, it brags about:
- “45% decrease in GHG [greenhouse gas] emission intensity at oil sands based on progress to to the end of 2008 compared to 1990 baseline.” Sounds good, but is it? How does that compare to other companies? Is that a legislated reduction, or voluntary?
- “22% decrease in absolute water use at oil sands from 2003 to 2008.” Again, sounds good. But while “absolute” (i.e., total) water usage is important, a reduction in that doesn’t necessarily imply an improvement in methods. It could just as easily imply a change in overall production.
- “$750 million actual and planned investments in renewable energy.” Again, a big number. But not quite so big once you consider that Suncor is a company with over $30 billion in revenues each year. And most importantly, notice that the $750 million includes planned investments. In other words, the company is taking credit for stuff it hasn’t done yet, or even (as far as we can tell) started.
So, what’s wrong with the ad? Are there any lies? Not literally, I think. And probably no lies in the sense of false claims that would be actionable under false advertising legislation. Is the misleading? Well, it’s certainly a rather glossy portrayal of a company engaged in a dirty business. So, like other examples of greenwashing, it’s a distraction from the truth. It attempts a bit of sleight-of-hand. Is a stage magician lying when he distracts you with the flowers in his right hand while his left hand dips into his pocket to retrieve the missing coin? No, not really. But then, the magician is offering entertainment, making our lives better. Greenwash offers a form of distraction that does little more than muddy the waters of discourse about corporate environmental responsibility.
(Thanks to Robin Hansen for showing me the ad and pointing out the greenwash.)
Taking Your Hybrid to the Carwash Greenwash
Filed under: consumers, energy, environment, greenwashing, sustainability, technology |
Leave a comment Wired featured the following story yesterday: Hybrids, We Never Knew Ya (by John Gartner), about the fact that not all “hybrid” cars are as environmentally progressive as the name seems to imply.
Marketers are jumping on the green-car movement and the gears are audibly grinding over what counts as a “hybrid vehicle.”
First applied to small sedans emphasizing fuel economy, the term is now blithely used to encompass a vast array of trucks, SUVs and luxury cars that in some cases offer only modest fuel savings over traditional vehicles, some critics charge.
…
Scott Nathanson, the national field organizer for environmental activist group the Union of Concerned Scientists (or UCS), contends the term “hybrid” is confusing at best and misleading at worst. “People think that it if you slap a hybrid label on something, that makes it a green vehicle,” he said. Not so.According to UCS, the upcoming 2007 Saturn Vue Green Line SUV along with the GMC Sierra and Chevy Silverado hybrids, make claims that are “hollow” and classify them as “mild hybrids” that should not be considered the same class of vehicles.
Nathanson said that while the Saturn Vue hybrid includes useful fuel-saving features such as deactivating cylinders when not in use and shutting off the engine while idling, a hybrid should include a battery with a minimum of 60 volts of electricity. By way of comparison, the Saturn hybrid’s batteries (produced by Ovonics’ subsidiary Cobasys) are rated at 36 volts, while the Toyota Camry hybrid includes 244-volt batteries.
While hybrid vehicles from Honda, Toyota, Ford and Lexus include battery packs that can recover substantial amounts of energy from the braking system (known as regenerative braking), the Saturn hybrid battery pack “doesn’t have sufficient power to provide an assist to the engine,” according to Nathanson.
The worry, here, is that at least some so-called “hybrids” are being promoted as part of an effort at “Greenwashing.” “Greenwashing” is a pejorative term derived from the term “whitewashing,” coined by environmental activists to describe efforts by corporations to portray themselves as environmentally responsible in order to mask environmental wrongdoings. (Melissa Whellams & I have written an article on Greenwashing in the forthcoming Encyclopedia of Business Ethics & Society) So, it seems in this case, certain auto manufacturers (some with really awful environmental records) are putting a handful of vehicles on the market that can technically qualify as “hybrids”. By doing so, the companies stand to improve their reputation in terms of environmental performance, without actually making any real commitment to improving actual environmental performance.
The problem with accusations of greenwashing, of course, is that a lot depends on a corporation’s intentions, and intentions are notoriously difficult to read. If a given company produces just a handful of hybrid cars, while churning out gas-guzzling SUV’s by the millions, is that deceptive greenwashing or the first step towards real improvements? If a company markets what the story above calls a “mild hybrid” (one with an electrical system too weak to do much good), is that a half-hearted effort, or an engineering stepping-stone to something better?
The Business Ethics Blog 