BP Global - Press - Social responsibility on a global scale

Now I'd like to turn to BP. You probably think you know the company. But I suspect you don't. Since the end of 1998 - thats less than three-and-a-half years ago - the company now known as BP has changed its name twice and more than tripled in size following seven large mergers or takeovers.

We were British Petroleum, then BP Amoco and now we're just BP. We're a new company - and truly a global company.

This new company is the worlds second largest publicly-quoted oil and gas company. It employs 110,000 people compared to British Petroleums 56,000 in 1997. Its represented on all six continents and in more than 90 countries. Its turnover last year was $175 billion compared to British Petroleums $71 billion in 1997.

As part of this transformation we set about revolutionizing our relationships with society. The starting point was a new statement of values - "What We Stand For" - which was issued first by British Petroleum in 1997 and updated periodically as the new company developed.

I mention this because of the section on Relationships. Its this section which guided us as we defined what social responsibility might involve on a global scale.

Various working parameters are laid down in "What We Stand For". I'd mention five for this discussion. That relationships be founded on trust and mutual advantage. That we seek partners whose policies are consistent with our own. That communities should benefit directly and measurably from our presence. That we take into consideration the specific developmental needs of communities in which we operate through a process of consultation and dialogue. And that we strive to minimise any disruption to the environment arising from our activities.

Essentially the SR challenge for us has been threefold. One - to translate these commitments into consistent behaviour around the world. Two - to meld the British Petroleum, Amoco, Arco approaches to social investment. And three - to satisfy external expectations. These have been heightened greatly since 1997 by the BP stance on climate change and the "Beyond Petroleum" advertising campaign in 2000.

Of course, we didn't start with a blank sheet of paper. In fact we had to work with more than 130 fully functioning Business Units. Each a largely autonomous operation with its own identity and imperatives. Each with its own history and relationships. And all at different stages of evolution in terms of profitability, capacity and understanding.

Our answer was to approach the BUs on a performance-related basis which was specifically designed to help them achieve their business goals. After all, these goals cannot be achieved unless the companys operations are sustainable.

This emphasis on business performance is critical. As a company we don't get involved with communities in order to replace governments or social services organizations. We also have overriding responsibilities to our shareholders to ensure that our activities are profitable. So clearly, we want to create value with our social investments.

But if we're going to thrive, we accept that the societies in which we operate must also thrive. To us, social investment is the means through which we manage the impact of our business and the means by which we add value for society.

In the event three linked objectives have come to dominate our global approach. One - engagement must precede involvement. Two - we seek measurable improvement in the self-directed sustainability of the communities of which we are a part. And three - the results of this engagement should include improvement in our reputation as a company.

We put our initial emphasis on investments that helped job and wealth creation. This was a deliberate strategy intended to give focus and collective meaning to some very far-flung existing initiatives in what was a new company.

In fact the central thrust of social investment since Day One of BP Amoco (as we were then) has been toward decentralization - vesting full responsibility for engagement and investment in the hands of the Business Units. So it wasn't long before we moved on from the job-and-wealth creation tagline.

Today the over-arching social goal that inspires us, everywhere, is the concept of sustainable progress. Clearly, the definition of this progress can vary. In some places it means supporting capacity building. In others it means helping education or health service reform. Or it may mean underwriting job creation schemes or conservation projects or moves to achieve greater self-sufficiency.

In other words, motives vary according to circumstance, local circumstance.

Just as important is pragmatism. We aren't a government, we have no democratic mandate and we aren't in the business of fixing communities - although we may help to make them stronger. What we can do is to initiate dialogue, act on what we learn and commit funds. Thats the strength of a performance-driven, decentralized approach.

We rarely act alone. Usually many others are involved with us, including governments, local officials, educators, NGOs and the local media. A central part of our approach is to work with them all, based on mutual advantage.

Sure, there are many barriers to successful implementation - inside and outside the company. Communities vary hugely in their attitudes to international companies. Knowledge of the issues, and what can be done about them, varies greatly. The whole question of the structure of a company and the incentives needed to encourage managers to undertake social investment projects is a complex one.

Suffice to say you can't just press a button marked "social investment" and get a result.

Two years down the line we've achieved quite a bit and learned a huge amount. This isn't the place to describe in detail the many initiatives around the world that are supported by BP. But last year we invested nearly $95 million on social initiatives globally. Our employees donated a further $13 million.

One-third of BPs contributions went on community development, 30 % on education and 15 % on environment and health.

The range of the projects is vast - everything from aiding small farmers in Colombia, to underwriting female adult literacy in Angola, heightening environmental awareness among children in China, teaching corporate governance in Zambia, encouraging clean business in Poland and comforting cancer patients in Egypt. Not to mention scores of initiatives in Europe and North America.

And just to mention some of the better-known organizations we work with: WWF in China, the Red Cross in Angola, Fauna & Flora International in South Africa, Save the Children in Vietnam.

We've been building relationships with NGOs for years, initially with environmental NGOs and more recently with groups concentrating on human rights, development and poverty alleviation. These aren't passive relationships. To give you one example: we've incorporated Amnesty Internationals guidelines for multinational companies into our policies and security guidelines.

So what have we learned?

The first point I'd make is the need to work at corporate social responsibility. It doesn't happen without real effort. This effort has to be sustained. And it needs a high-level champion in the sponsoring organisation - someone with real clout. The more international and decentralized a company is, the more this is true.

Another important lesson is that a global company has to be socially-responsible on a global scale. This means that common standards need to be defined and upheld. In terms of a companys general approach, there has to be a central focus - something that everyone can buy into.

This is particularly important if the company is a new one made up of differing cultures and experiences. Its very hard to pull together from the bottom up. To begin with, there needs to be strong direction and clear information from the centre.

Equally important: you have to find ways to encourage local initiatives and respond to local circumstances. Where social investment is concerned, one size doesn't fit all. There's no silver bullet.

Related to the last point: keep everything as simple as possible. The scope for misunderstanding is vast.

And - never under-estimate the level of expectation. Where major companies are concerned, global society is demanding ever higher levels of social performance.

Finally, social investment is not a quick fix. It should be seen as a professional activity integral to business performance. It's the investment we make to improve the social performance of our business. But it needs time to be understood, inside and outside companies. And it takes time to show results.

Thank you very much.