Esso fails to pacify the sceptics

The company's first global CSR offensive in a decade has resulted in accusations of a 'greenwash', by Robert Gray.

'We're all for reducing emissions'. So runs the strapline to one execution in the Esso print and TV ad campaign that broke last week. Next to a striking image of a kettle recycling its own steam, the copy extols the strides Esso has made in energy efficiency at its refineries.

Another ad boasts of the company's sponsorship of California's Stanford University's Global Climate and Energy Project, an ambitious programme exploring how the world's growing energy demands can be balanced with a reduction in greenhouse gas emissions.

So far, so typically socially responsible. But CSR is hardly something for which Esso is renowned. Doesn't Esso, and in particular its US parent ExxonMobil, have the unwelcome reputation of being one of the least environmentally friendly of the giant oil companies?

Its reputation led a trio of leading environmental NGOs - Friends of the Earth, Greenpeace and People & Planet - to urge a consumer boycott of its products through a Stop Esso campaign, which has included organising protests on its petrol station forecourts.

So is Esso now taking green issues as seriously as it rivals? Or has it engaged in a high-risk communications strategy in which it is paying lip service to environmental concerns without truly addressing the way in which it does business?

Environmental concerns

Unsurprisingly, many of the NGOs believe Esso's stance is illusory. 'This ad campaign is designed to pull the wool over the shareholders' eyes, it's a greenwash,' says Stop Esso campaign co-ordinator Cindy Baxter.

'None of the oil companies are great, but the others have signed up to (global-warming treaty) Kyoto and have large investments in renewable energy sources. Exxon has not signed up and questions the impact that burning fossil fuels has on climate change,' she adds.

Friends of the Earth climate campaigner Nick Rau says: 'It seems to be belatedly making an attempt to clean up its image as Shell and BP have done. It rings particularly hollow in Exxon's case, it's all just window-dressing.'

The timing of the ad campaign is interesting to say the least. Exxon's annual general meeting, at which environmental issues are sure to be aired, takes place today, 26 May. At last year's AGM, Exxon rebuffed two resolutions supported by about 20% of shareholders. One called for research to be commissioned to examine how climate change would hit Exxon's operations and reputation. The other called for clarity on the company's approach to renewable energy.

Moreover, the end of this week sees the release of environmental disaster movie The Day after Tomorrow. In what must be an embarrassment for the company, the Stop Esso coalition has set up a website spoofing the movie - www.thedayaftertomorrow.org - on which Esso is credited as the director of the catastrophe, while President George W Bush is lampooned as the producer.

Esso responds that its position is often misrepresented by special interest groups and asserts that the ad campaign has not been launched in response to Stop Esso. According to head of media relations David Eglinton, extensive data analysis shows the campaign has had no discernible effect on UK service station sales volumes.

The advertising, Eglinton says, is not a CSR campaign, but rather a consumer information exercise intended to explain the difficult issues it faces, encapsulated in the endline 'Taking on the world's toughest energy challenges'.

Esso's stance on environmental issues is articulated more fully in a report it released in February on energy trends. This explains that it is not pursuing investment in renewable energy because 'current renewable technologies do not offer near-term promise for profitable investment relative to the attractive opportunities that we see in our core business'. In other words, oil makes much more money.

Investment efficiency

'You could say our problems would go away if we put some windmills at our service stations,' says Eglinton. 'But the challenge is to use existing fuels (oil and gas) more effectively and efficiently.'

Esso did invest about $500m (£279m) in solar-energy research during the 80s, but scrapped the initiative as unviable. Its lack of investment in renewable energy today may be seen as its Achilles heel. BP's Beyond Petroleum positioning and Shell Renewables - which has become one of Shell Group's five core businesses - signal a commitment to alternative energy that Esso has not matched.

'If you don't invest in protecting your licence to operate, if you're not seen as a good corporate neighbour, it will make it harder for you both in the Western world and the developing world,' says Tom Kearney, head of Shell's corporate identity programme.

The tone of its advertising suggests Esso is trying to be seen as a good corporate neighbour. But despite the pressure it is under to change its ways, massive investment in renewable energy seems unlikely in the short term. Why? Because in January it unveiled annual profits of $17bn (£9.5bn), the biggest in corporate history.

DATA FILE - SHELL

Shell has led the way in CSR ever since its image took an almighty hammering during the Brent Spar oil platform crisis of 1995. In 1998 it issued its first Shell Report, which has become a benchmark in corporate communications relating to sustainable development.

Several major ad campaigns by J Walter Thompson have sought to take Shell's CSR message to a broader audience. In 2001 it used ads to try to reconcile the demands of shareholders and an environmental agenda. Its latest campaigns show real people putting Shell's business principles into practice.

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