Setting up the $20 billion (£13.5 billion) escrow account to compensate people around the Gulf of Mexico arising from the Deepwater Horizon oil leak, sees the start of the end of this sad chapter in the BP story. The company will now begin to rebuild its reputation to win back the confidence of its customers, investors, employees and other stakeholders – see the full story.
This incident is a game changing event in several ways. First, let’s roll back to President Obama’s address to the people of America from the Oval Office. As he said, this is an environmental 9/11, a wake up call to America about its dependence on oil that will require the country to scale down the excesses that squander this resource. Not an end to the car, but call for modest hatchbacks rather than gas-guzzling SUV’s.
The second message is far more significant. The BP settlement puts all businesses on notice that they are responsible for the consequences of their actions and there is potentially no limit to that liability. Just think of the implications of that.
It is not just oil companies, but mining companies, drug companies, food manufacturers, car manufacturers, agrochemical producers perhaps even financial institutions that should worry. If your actions cause harm then you are liable. Just imagine if another Thalidomide or Bhopal disaster were to happen now and the scale of compensation that that could incur.
I have no doubt that astute insurance companies are even now devising products with hefty premiums to protect against such massive claims. But there is a danger in seeing such crises in purely financial terms. The real impact of major crisis is on reputation – and that can take years or decades to rebuild.
The best insurance that any company can have is to adopt practices that will avoid a crisis and build a sound reputation for responsibility, transparency and fair dealing. If you need a primer to help understand the principles behind this then check out the Free-PR-Advice site and look at the checklists on Corporate Social Responsibility and Taking a Pro-Environment Position.
Many of our PR clients are already taking these issues extremely seriously. Senior Hargreaves, a supplier of ventilation ductwork for construction projects, and Hy-Ten, suppliers of steel reinforcement bar for concrete frame structures, both operate to the ISO 14001 environmental standard. This is a continuous process for looking at business operations in a sustainable way and striving to reduce material and energy inputs, CO2 production and ensure the recycling of waste products.
Another client, Crown Oil UK/Crown Energy, providers of liquid fuels, lubricants and utility connection services, offset their own transport emissions and offer total carbon offset as an option for their construction industry customers. Green thinking permeates every aspect of the business.
To leverage environmental issues to bolster your reputation give Ainsworth Maguire PR a call on 0161 447 8550. We are happy to help.