Advertising and Environmental Stewardship: Evidence from the BP Oil Spill

Abstract

This paper explores how advertising impacts the consumer response to news about unobserved product quality. Specifically, we estimate how British Petroleum's (BP) 2000-2008 "Beyond Petroleum" advertising campaign affected the impact of the 2010 BP oil spill. We find that BP station margins declined by 4.2 cents per gallon, and volumes declined by 3.6 percent after the spill. However, pre-spill advertising significantly dampened the price response in the short-run, and reduced the fraction of BP stations switching brand affiliation in the long-run. Our results suggest that advertising provides insurance against adverse events. We discuss implications for private provision of environmental stewardship.Lint Barrage

Greenwashing Behaviours: Causes, Taxonomy and Consequences Based on a Systematic Literature Review

“…Previous studies have often assumed that greenwashing involves aspects such as information disclosure decision that are deliberate and initiated by companies and beneficial for them, but costly to society. This understanding is useful as it helps researchers model and measure greenwashing in empirical studies (Lyon & Maxwell, 2011;Barrage et al, 2014;Du, 2015).…”

Visuality as Greenwashing: The Case of BP and Deepwater Horizon

“…In 1954, the company officially became “The British Petroleum Company,” a brand name which was in use until 1998 when its then-CEO, Lord John Browne, launched the “Beyond Petroleum” campaign and the acronym “BP” was permanently adopted as the company’s name. The “Beyond Petroleum” tagline deliberately played on the BP acronym and came alongside a new logo, a yellow and green sunflower symbol representing the Greek sun-god Helios, with which all of BP gasoline stations were rebranded to reflect the company’s newly stated dedication to environmental stewardship (Barrage, Chyn, & Hastings, 2014). In fact, Browne, one of the first major oil company executives to acknowledge the existence of global climate change, spent 120 million dollars in 2000 alone to rebrand the company as “green” and strategically pushed to distance BP from its “tarnished image” (Schwartz, 2004) and “its big oil ways of the past” (Muralidharan et al, 2011).…”

“…In this article, we draw on previous work which looked at the various dimensions of the BP disaster, including the role of BP’s green advertising in its subsequent financial recovery (Barrage et al, 2014); the lessons learned from “corporate brand exuberance” when a company cannot deliver what it promises (Balmer, 2010; Balmer, Powell, & Greyser, 2011); the role of social media in BP’s image restoration (Muralidharan et al, 2011) as well as BP’s initial image restoration strategies after the oil spill (Harlow, Brantley, & Harlow, 2011); and the ways in which the law can more effectively address greenwashing cases such as BP, including fraudulent claims of corporate social responsibility (Cherry & Sneirson, 2011). Despite the diverse perspectives taken in these studies, all authors seem to agree that the 200 million dollars that BP spent on green advertising cushioned the impact of the spill, a finding which, in turn, raises serious questions about the incentive for companies to greenwash.…”

Website stories in times of distress

“…‘The British Petroleum Company’ became ‘BP’ in 1998 when its then-CEO, Lord Browne, launched the ‘Beyond Petroleum’ campaign (Cherry and Sneirson, 2011). The ‘Beyond Petroleum’ tagline deliberately played on the BP acronym and came alongside a new logo, a yellow and green sunflower symbol representing the Greek sun-god Helios, to reflect the company’s dedication to environmental stewardship (Barrage et al, 2014). Browne, one of the first oil executives to acknowledge the existence of climate change, strategically rebranded BP as ‘green’ and pushed to distance it from its ‘tarnished image’ (Schwartz, 2004).…”

“…Although previous research examined different aspects of the disaster, including the role of green advertising (Barrage et al, 2014) and the role of social media in BP’s image restoration (Muralidharan et al, 2011), the use of its website in its recovery efforts has been neglected. It is to this analysis that we now turn.…”