Leopard Changing Its Spots? BP’s New Position On Biodiversity Crisis

Addressing the global biodiversity crisis has become a major priority for world leaders in recent months.

An alarming report by WWF’s Living Planet Index last month showed global species loss of 68% in the past fifty years (since 1970). Of the 8.7 million species identified, we are losing species at a rate that is 1000 times greater than the natural background rate. Almost all of this is attributed to the ways that humans and the current economic system use our planet.

The rate of scientific discovery of 71 species a year reveals how much we are yet to learn about life on the planet.

There are many misleading headlines that the world ‘only’ lost 31 species compared to 71 new species discovered each year. However, this is due to the method for how extinction statistics are calculated. Scientists wait years or even decades before announcing a species is extinct (often delaying such announcements if species are already extinct in the wild but single specimens exist in captivity or zoos). Conversely, scientists will immediately recognize a novel species. So extinction numbers of 31 lost species may relate to events in the 1970s, not necessarily the much higher rates being seen from species disappearing in 2020. Human impact on rare species that have not been classified by science is not even being counted in these statistics.

So this means that the true extinction rate last year is likely in the hundreds or thousands of species, and even this is only from the baseline of species that have been categorized or ‘scientifically discovered.’

This means that the world is in the midst of a true biodiversity collapse, or what has been referred to as the Sixth Mass Extinction. Urgent action is demanded of all leaders - public and corporate.

A failed generation of leadership

It is clear that environmental efforts have not been good enough - by political leaders, business leaders, and even environmental NGOs have not innovated fast enough to get ahead of the problem. A whole generation of leaders have failed nature.

Even the post-Covid-19 recovery plans by many Governments have failed to be as green as initially promised to secure these funds.

This is why a new environmental movement has been emerging, led by younger, more diverse faces such as Greta Thunberg of Sweden and Vanessa Nakate of Uganda.

Figureheads such as Prince William and David Attenborough have called for urgent action, and announced new $65m ‘Earthshot prize,’ although is this sufficient relative to the challenge the planet faces?

64 world leaders have signed a biodiversity pledge at the United Nations last month. This pledge was as noticeable for who did not sign (USA, Russia, Japan, India, Brazil, China) as much as for who did. The question is whether these leaders mean action, as biodiversity targets set since the 1992 Rio Summit have been missed each decade.

Bolder new actions such as significant re-wilding is called for, but few appear to be willing to step up to take or invest in such solutions.

Enter BP’s new CEO

With pressure on corporations to take greater social and environmental responsibilities in return for social operating license and favorable tax treatments, several have started to make public pushes into biodiversity and safeguarding nature.

For an oil major at the center of attention following the world’s largest oil spill in 2010 (BP Deepwater Horizon) and the high visibility that climate change is having, this is certainly a bold position for the 111 year old company.

In February, BP selected a new CEO after a decade of recovering from BP Deepwater Horizon impact, under the leadership of by Bob Dudley. BP’s new CEO is Irishman Bernard Looney. He has committed to help BP navigate through to a low carbon and lower environmental footprint.

It shows that big corporations who are willing to take the right actions will be rewarded by customers and the market (i.e., investors), so long as these commitments are genuine and not greenwashing (i.e., making fashionable environmental statements, but actions that indicate more business as usual).

Lessons from Deepwater Horizon disaster

BP learnt some harsh lessons from the 2010 Deepwater Horizon disaster. Most important was - do not spill any oil in the ocean.

The other takeaways from the biggest oil spill in the ocean in history that took 3 years of active cleanup, and a decade of monitoring were:

• Immediate response. BP CEO, Tony Hayward, was criticized for sailing and appearing to be on vacation during the worst oil spill in history. His response became a classic business school case study of what not to do in the midst of a crisis, and he was promptly replaced as CEO by Bob Dudley.

• Cleanup was worse than the oil spill. BP ended up using highly toxic chemical dispersants, that had the effect of visually removing the oil, but created many longer term and more complicated impacts on marine life along the Gulf of Mexico. Much of that is still being felt today, and more lawsuits were launched based on the exposure of several oil spill responders to this deadly chemical cocktail. It was because BP knew the composition of the oil, it selected the particular chemical dispersants it did. The lack of disclosure about the oil and cleanup techniques were heavily criticized in the lawsuits that followed.

• Accusations of a cover up. BP was accused of a cover up when the Joint Operations Center handling the oil spill ‘conveniently forgot’ which aircraft took off and sprayed chemical dispersants over the oil spill. It was 2010, a time when technology platforms such as Facebook, Google, Palantir, Amazon AMZN , Microsoft MSFT , Apple AAPL , were all well in existence. ‘Forgetting’ or ‘not recording’ aircraft spraying an oil spill appeared to be a major oversight.

There were many other lessons, but these three alone were damning and in the complex set of legal settlements, it was estimated that by June 2016, BP paid over $63 billion in legal fees and cleanup costs.

The damage to BP’s branding and market value was even greater, and the CEO, Tony Hayward, lost his job.

The CEO replacing Tony Hayward, Bob Dudley, expressed his apology for the company, saying in a speech to oil executives in June 2011, “The first thing I want to say is that I am sorry for what happened last year,” in a speech entitled “New Era, New Responsibilities.” He had gone on to say that BP was working to earn back the trust of the industry, state and federal leaders and coastal residents. 

The author and researcher, Dan Ariely, has famously written about how corporations have to learn to apologize when they make an error. His bestselling book, ‘The (honest) truth about dishonesty,’ serves as a CEO guide for how many executives have had to handle the consequences of their company’s actions.

It will be interesting to see to what extent these lessons have been learned and internalized by the energy giant.

BP’s new Biodiversity Position

BP’s new Biodiversity Position, announced in June 2020 stated BP’s goals and intentions as, “The rich biodiversity of our planet is under threat. We understand that transformative change is needed and recognize there is also an intrinsic link between the need for global action on biodiversity and climate change. As part of our purpose to reimagine energy for people and the planet, we are taking action to restore, maintain and enhance nature.”

BP went on to make five bold commitments:

• We commit not to operate any new oil and gas exploration or production activities inside the boundary of officially inscribed UNESCO World Heritage sites. We will consult with UNESCO if we are considering operating any such projects in the buffer zone or adjacent to a World Heritage Site. We will seek to avoid any associated activities that would have a direct residual impact on the value and integrity of a World Heritage Site.
• We also commit not to operate any new oil and gas exploration or production activities inside the boundary of Strict Nature Reserves (International Union for Conservation of Nature (IUCN) category Ia) or Wilderness Areas (IUCN category Ib) as listed on 1 January 2020. If we enter other protected areas, we intend to work with relevant stakeholders and biodiversity experts to help manage any potential impacts and assess opportunities to improve the management of the site.
• We will aim to achieve a net positive impact on biodiversity in our new projects. From 2022 onwards, new BP operated projects whose planned activities have the potential for significant direct impacts on biodiversity will be required to develop net positive impact action plans for those activities. This requirement will apply to projects across our portfolio – from oil and gas to renewables – and our business will be required to implement the action plan for as long as we operate the asset.
• We will aim to enhance biodiversity around our existing major operating sites. We are also putting in place measures so that from 2022 we can require BP major operating sites to have plans established to enhance local biodiversity, starting with sites in biodiversity sensitive areas. For example, restoring wetland habitats, conserving threatened species or improving the management of protected areas.
• We will support biodiversity restoration and the sustainable use of natural resources. In countries where we have existing and growing investments, we will aim to further the conservation and restoration of biodiversity, and the sustainable use of natural resources by local communities.

Questions remain whether such commitments are bold enough to reverse the decline of biodiversity, or whether these are just operational good practice that BP should already have been applying (making one wonder what was happening before).

Mauritius oil spill threatens rare species with extinction

The clock on extinction is ticking.

The Indian Ocean island of Mauritius suffered the worst oil spill in its history in August as a passing Japanese iron ore ship with over 1 million gallons of oil on board, hit Mauritius’ shores and spilled oiled into a network of internationally protected nature reserves.

This included a small coral atoll which was home to hundreds of the last remaining species on Earth of particular plants, trees, birds, reptiles, insects and corals. There was incredibly unique genetic diversity in these outlying islands and surrounding coral reefs.

As the citizens of Mauritius continue to call out that they are being abandoned by the international community during Covid-19 lockdowns, the actions of major corporations impacting these communities are coming under increasing scrutiny.

There has been particular concern about the role of the UN ‘s global shipping regulator, the IMO and oil industry groups such as ITOPF in Mauritius as controversy has raged about the oil fingerprinting for the grounded Wakashio that was responsible for the oil spill.

BP: the leopard or the wolf?

This means corporations who know they wish to be on the right side of history have to step up. In doing so, it means placing sustainability at the core of their business operations, not in a side marketing or CSR division.

Investors and customers have learnt to see through this.

The question for BP with its new CEO and a new Biodiversity Position is whether the leopard really has changed its spots, or is it just a wolf in sheep’s clothing?