Welcome back to the Strategic CSR Newsletter!
The first CSR Newsletter of the Fall semester is below.
As always, your comments and ideas are welcome.
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The Newsletters this semester begin with the article in the url below, which contains a stunning number that emerged over the summer:
"BP PLC said its costs from the deadly 2010 Gulf of Mexico oil spill would rise by an additional $5.2 billion and ultimately cost $61.6 billion to put one of the worst environmental disasters in U.S. history behind it."
Acting according to the expectations of stakeholders is a surprisingly difficult message to convey to large corporations. But, if there is ever a compelling argument to focus on building an ethical organizational culture that encourages investment in the short-term in order to create broad-based value over the medium to long-term, BP would seem to be it:
"The British oil giant said on Thursday the pretax charge for its second quarter likely would be the last from the Deepwater Horizon accident to have a 'material impact' on its financial performance, signaling an end to six years of mounting costs that humbled one of the world's largest energy companies."
To put this number of $61.6 billion into some kind of context:
"BP's costs are much larger than the fines levied on individual banks involved in the subprime mortgage crisis last decade or the 1989 Exxon-Valdez spill, which cost the U.S. company $4.3 billion."
The graphic accompanying the article (https://si.wsj.net/public/resources/images/BT-AJ867_BP_16U_20160714181507.jpg) compares BP's penalty to those of other firms that caused environmental disasters in the US. While these fines are not inflation-adjusted, the contrast remains striking:
- Three Mile Island (1979): $1 billion
- Hudson River PCB contamination (1970s): $1.6 billion
- Exxon-Valdez oil spill (1989): $4.3 billion
- Deepwater Horizon oil spill (2010): $61.6 billion
Hope you all have a good semester.
David
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
BP's Gulf-spill Tab Hits $62 Billion
BP's Gulf-spill Tab Hits $62 Billion
By Michael Amon and Tapan Panchal
July 15, 2016
The Wall Street Journal
Late Edition – Final
B3
