06 May 2014
When Girl Meets Oil
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Christine Bader, author of The Evolution of a Corporate Idealist: When Girl Meets Oil talks about what corporate social responsibility really means to big business.



Music: Happytime by Podington Bear

The Business is a Harvard Business School podcast. Twice a month during the academic year, host Brian Kenny will bring you a new take on the business world through unexpected stories, and conversations with business leaders, entrepreneurs and faculty members. Subscribe on iTunesU.

 

Transcript

Brian Kenny: Christine Bader is the author of The Evolution of a Corporate Idealist: When Girl Meets Oil, published by Bibliomotion in 2014. She’s a visiting scholar and lecturer at Columbia University, where she co-teaches a course on human rights and business, and a human rights adviser to BSR. What does BSR stand for?

Christine Bader: Business for Social Responsibility.

BK: Great. Thank you for joining us today, Christine.

CB: Thank you. Thank you for having me, Brian.

BK: So let’s just start with a very basic notion of what is a corporate idealist and how do you become one?

CB: A good place to start. So a corporate idealist is someone who wants to have a positive impact on the world and thinks that business is the way to do that – sees the potential impact, reach, scale, scope of the private sector and thinks “I can put that to good use.” So you can become one by any number of ways. I came at it by going to business school and then joining a company that clearly had really big impacts on the world, and that was BP.

BK: Right.

CB: The role that I carved out for myself was one where I was investing in the health and safety and well being of contract workers and of communities living near big BP projects in the developing world, because everybody who I came across in the company understood that what was good for those communities was good for our business. There were lots of terrible examples all around the world, but also in Indonesia, where I was, of how things had gone horribly wrong between the company and the community, which had serious bottom line impacts on the company.

BK: Right. So you’re at BP, did they sort of say to you we need somebody to come in and help us think about this? Or was there a group that was already thinking about corporate social responsibility in the context of what BP did?

CB: So when I got there, to be honest, I was pleasantly surprised by what I found there. Everyone seemed to be in constant conversation about the company’s role in society – whether that was fighting climate change or the company’s role in the communities and countries and societies where it operated. So when I joined the company fresh out of business school, a newly minted MBA – idealistic, convinced that business was a force for good – I went out to Indonesia. So I was crunching data, which wasn’t that interesting, but there was one project in particular that was proving really interesting. It was a big fat juicy gas field that sat really close to the surface. BP was going to exploit that asset and build an on-shore liquefied natural gas processing plant. And BP’s done that all over the world – that was not a big deal – but never in a place like West Papua, which is at the eastern tip of Indonesia. It’s environmentally and socially one of the most sensitive places on earth. So again, technically, it was a very straightforward project. But the more that we looked at the risks, it was the non-technical aboveground risks that might actually threaten the viability of the project. So at the time – this was in the fall of 2000 – corporate social responsibility was sort of around, but not like it is today. It wasn’t on the lips of every CEO. There wasn’t a department called CSR there. But we clearly needed more people to focus on those issues. So I put my hand up and said, "yeah, whatever that is, I’d like to work on it."

BK: OK.

CB: So that’s what I did.

BK: So you were really a pioneer within BP of recognizing, you know, this need to balance what’s good for the company but also what’s good for the communities where the company operates.

CB: And I would say not even balance, but align because there – again, there were plenty of horrible examples around the world and in Indonesia where it had all gone wrong. So at the other end of the country, in Aceh, ExxonMobil had a similar facility – a liquefied natural gas facility – that it had to shut down for four months in 2001 because of the social strife going on around it that some people accused that company of exacerbating. And I did some research for my book. I couldn’t find an exact figure, but I found estimates that said that that cost – that shutdown cost ExxonMobil anywhere from $100 to $350 million. And even for ExxonMobil that’s actually real money.

BK: That’s a business argument.

CB: Yes, it is.

BK: Right. Right. So there are strong business arguments to be made for this – and that’s really where a business will be motivated. To the extent that these kinds of initiatives can be directed with that in mind, there’s a greater chance for success.

CB: That’s right. So it’s bottom line impacts. It’s risk mitigation. But hopefully you also find some upside – you find something that’s a little bit more inspiring than just oh, you don’t want that horrible thing to happen, do you? Around the Indonesia project that I worked on, I think there was some genuine curiosity as to whether we could actually refute the resource curse. Why does it have to be inevitable that oil and gas and mining projects are a terrible thing for the people who live nearby? Why does it have to be terrible? If we really invested the time and the energy and the resources up front, could we actually make a resource development a good thing for local people? So that’s what we’d set out to do.

BK: There must have been some moments of humility along this way where you find yourself in a situation you just really didn’t expect. Can you describe one of those for us?

CB: I was working on a joint venture between BP and Sinopec, one of China’s state-owned energy companies. Migrant worker safety in China is a really big issue. There have been lots of horrible accidents. So my first week there on this joint venture, I was sitting in a meeting, and it was half BP guys and half Sinopec guys – all guys. And we were reviewing the spreadsheet of the latest estimates for the timeline and the costs, the budget for the project. We were going down the spreadsheet, and there was a number eight, but the label hadn’t yet been translated into English. My BP colleague said, “What’s the number eight? What’s the label?” And the Sinopec guy said, “Oh, that’s the projected number of fatalities.”

BK: Oh, my goodness.

CB: And my colleague said, “Excuse me?” And he said, “Yeah, for a project this big, this many man hours, we project eight fatalities.” And my colleague said, “Um, the target is not eight. The target is zero.” And his Sinopec counterpart said, “Well, that’s not realistic.” And I realized that he was right. That based on their track record, you would expect about eight fatalities. So this was the sort of conversation that I was stepping into there. If you set an expectation that you’re going to kill eight people, you’re probably going to kill at least eight people. So I was in there to try to figure out, well, how do we, first of all, make it clear that that’s not acceptable and then make the target of zero actually achievable?

BK: So let’s talk about the Deepwater Horizon incident.

CB: That’s what compelled me to write the book. I had left the company in 2008, two years before the disaster, but it was that disaster – and the BP that emerged in the press, in the investigations as a place that was reckless, that was cutting costs at the expenses of safety – it just didn’t seem to be the BP that I thought I had gotten to know so well. That, in Indonesia and in China and elsewhere, had gone above and beyond what was required to protect people and protect the environment. So this BP that emerged in the aftermath of that disaster – my first reaction was, well, that’s not my BP. And then my second reaction was or was it? And that made me think what does it mean to do this work inside a big company? So it was really to reconcile those two BPs that I started to talk to lots of other people – lots of peers who I’d gotten to know over the years – similarly pushing for more responsible and sustainable practices deep inside some of the world’s biggest and best known companies – and talk to them when their companies deeply, deeply disappointed them – so talking to friends who work in apparel after the Rana Plaza factory collapse in Bangladesh, who similarly thought, hang on – I’ve been doing really good supply chain work in improving factory conditions over the past 20 years, and still we just killed 1,200 people in a heartbeat. What does it mean to do this work? And that’s what compelled me to write the book. I realized that we face so many similar themes and challenges and that we really have a story to tell, because I’ve gotten so frustrated with the public conversation after every corporate disaster which seems to be, oh, that company is evil – we need more regulation. I think we need to be looking deep inside these companies at the people that are trying to prevent these very disasters from occurring and asking why they fail.

BK: And I think oftentimes the knee-jerk reaction seems to be, somebody needs to be fired. We need to – you know, get rid of that CEO kind of thing.

CB: Yeah. A head has to roll.

BK: Yeah, a head has to roll. And that, in many ways, is probably pandering to the initial public reaction, where you might actually remove a CEO or a leader who could make a difference if they were allowed to continue on. We look at what’s happening right now with General Motors and the scrutiny that they’re under, and the CEO is answering questions for decisions that were made when she wasn’t in that role. So I think this is the society that we live in right now.

CB: I think that’s right. The General Motors case, I think, is really relevant and really interesting because, for example, they’ve appointed a safety czar. Well, I suspect they’ve had a lot of people working on safety for a long time. We need to look at why they failed and whether imposing a new superstructure is actually going to help them succeed.

BK: You have a manifesto as part of the book. And there are 10 items in your manifesto. Is there one of these 10 items that you feel is most relevant, most poignant, most powerful?

CB: Yeah, there are a few. One of them I’ll pick up is the third point, which is sharing the stories of the people and communities my company affects is part of my job. One theme that emerged from a lot of my interviews was the importance of bearing witness, because CEOs and people at top levels in a company can be very far removed from the impacts of their decisions on communities and on workers at the tippy toes of their supply chain. To me, flying to that project in Indonesia for the first time that’s when I really saw that, oh this is what we do and this is how important it is.

BK: Much different than reading it on a report or hearing it in a PowerPoint presentation or –

CB: Or seeing a dashboard with traffic lights, which people love.

BK: Exactly.

CB: Yeah.

BK: And that brings to mind the notion of – or the role, rather, that technology and social media plays today. So you, as a consumer, can help a company bear witness to things that they might not otherwise see.

CB: That’s right.

BK: Talk a little bit about social media and how you think that can help consumers to become more empowered to hold companies accountable.

CB: It has helped. What some people who I interviewed for the book have said is that social media is actually incredibly helpful to them to point to what consumers care about. It’s not just them being a crazy person inside the company trying to say that these issues are important. Now it’s as easy as a hashtag for consumers to express concerns.

BK: But it’s not all on the consumer, right?

CB: Right.

BK: So the other thing that I would say is that, you know, consumers can motivate and can move an organization, but one individual consumer trying to do that is hard. When you get a movement together, that makes a difference. On the inside of an organization, is it a similar thing? If I’m like one sort of mid-level employee at a large organization, how can I start to move my organization in that direction?

CB: There are two pieces of that question that I think were interesting. One of them is the consumer piece. And while I think it’s really important, frankly, I don’t have a lot of hope for consumers to be the ones who are really going to move companies, because there are lots of studies that show that, even though consumers say that they want ethical practices, they want fair trade products, they don’t pay more for them – and they can cost more. So there are studies that I cite in the book that show that, if there are two piles of socks and one of them is marked fair trade –customers will buy the fair trade one if they are the same price. But as soon as you bump the price up, they walk away. And I think, after the New York Times exposé on working conditions in Foxconn factories, we saw a lot of public outrage and people protesting in front of Apple stores, but I think that a lot of the people participating in those protests were tweeting about it from their iPhones.

BK: Yeah.

CB: So I don’t have a lot of hope in consumers, unfortunately. I think it’s really important. And when consumers act, that’s very powerful. But again I’m focused on the people inside those companies. So then you ask, well, what makes them effective? And how can they be the lone change agent? And what is that like? So one theme that emerged from my interviews was the importance of community and building community across industries with peers in other companies, who get together and can share – oh, you faced that argument from your lawyer too? So did I. How did you overcome that? How did you make the case internally? So building community is incredibly important.

BK: We’ve got a generation of young people who are looking for organizations to work for that take these things seriously.

CB: Absolutely.

BK: What advice would you give to the HBS Class of 2014?

CB: The first piece of advice I always give people is never to take anybody’s advice, because nobody else knows where you’re going to thrive. We all thrive in different environments. I wrote the book because I wanted to give people a more realistic view of what it will be like if you choose to do this work inside a big company. I did interview some people who had had enough after a while and left and said, you know what? I can’t do this. It’s too incremental. It’s too difficult. And I’m going to go work at Amnesty International. And there you’re going to spin your wheels a different way, and it has its own frustrations. But again we all have to pick where we’re going to thrive. So I think that it’s really important to have some of the best and brightest and most idealistic people in the world working deep inside big companies, but know that it’s going to be challenging work. I joined BP because of the progressive stances that Lord Browne had staked out on human rights and the environment and now, looking back, I realize how complex those issues are and how complicated and difficult it is to live up to those ideals in a company with 100,000 people operating in 100 countries. But I still embrace that with a platform that big, it is complicated but that’s where you can really change the world.

BK: Christine Bader thanks for joining us.

CB: Thank you.

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