A new US study claims that a prolonged “green advertising” campaign by BP helped the company recover from the catastrophic Deepwater Horizon oil spill in the Gulf of Mexico. It argues that green advertising functioned as an insurance policy against the cost of an environmental disaster.
However the study seems to be flawed. The conclusion put forward by the researchers is – at the very best – wildly optimistic. There is certainly nothing substantial to support the suggestion that the study may give corporations “incentive to greenwash” in the wake of a crisis.
The working paper from the US National Bureau of Economic Research examined BP’s controversial “Beyond Petroleum” green advertising campaign, which began in 2000, and tried to relate exposure to the advertising to the degree to which customers “punished” the company after the Deepwater Horizon disaster in 2010. Using just three main measures – petrol sales, petrol price margin and outlet affiliation – they calculated that short-term customer response had been less severe in places where there had been more exposure to the advertising. On that basis they concluded that environmental advertising cushioned BP from long-run negative impacts.
But is such a conclusion sustainable? While they looked at advertising exposure between 2000-2008, there was no mention of the high-profile BP Texas City refinery disaster in 2005 which killed 15 and injured over 170 in the worst industrial accident in America for decades. Nor any mention of the spill from a corroded BP pipeline in Alaska in 2006 which shut down America’s largest oil field and drove up petrol prices across the whole country. Wouldn’t those events have had a pretty substantial impact on sentiment during the advertising period?
There was no examination of changes in share price, which is often regarded as a key measure of public feeling about a company. And while the researchers briefly considered reputation studies BEFORE the 2010 spill but didn’t examine any of the many reputation surveys undertaken afterwards.
Finally, the researchers conceded that any advertising – green or otherwise – could have had the same short-term price and loyalty effect!
Moreover, the study seemed to use the terms green advertising and greenwash as if they were interchangeable. Greenwashing is when green PR or advertising is used deceptively used to promote a false perception that an organization’s products, aims or policies are environmentally friendly. It has no place in responsible issue or crisis management. Indeed, there are many critics who believe BP’s “Beyond Petroleum” campaign fell into this category. For example, the NGO Corpwatch famously renamed it “Beyond Preposterous.”
There is plenty of scope for legitimate green advertising, when a company uses advertising to communicate to stakeholders about real environmental performance or achievement. Yet despite the claims in this study, for any organization thinking about environmental advertising as a way to “buy” reputation, or to somehow insure against the impact of a crisis or major issue, the best advice would be: Think again.