Issue link: https://www.e-digitaleditions.com/i/59979
Now must be a fascinating time to be a CEO in the energy industry. Demand is growing, prices are sky- rocketing, and much of the world's oil supply lies in a volatile region of the world. What do you see as your biggest challenge at this moment? Our principal purpose as a firm always is to provide secure supplies of energy to give people light, heat, and mobility. So far we've been able to do that without interruption, at a scale and a growth rate that matches demand. To continue to meet demand, we will have to keep finding new reserves of oil and gas all over the world, and that's always the biggest challenge. In 1997, you announced that BP would essentially go green. The company began working to reduce its CO2 emissions, improve efficiency, and take other meas- ures to protect the environment. What led you to become such a passionate supporter of sustainable development? I think, in any business, you need to be mindful of your cus- tomer base. Ideally, you want as many people as possible to have choices; and you want to make sure you have the prod- ucts, technology, and reputation for trust that will make peo- ple choose you over others. But in the energy field, the issue of sustainability says that we also have to think about the loca- tions where we work and how good we are at helping people through the challenges of development. We also have to be mindful of the environment. It's not a free good, whether you're talking about the earth, the water, or the upper atmosphere. That doesn't mean we can keep the environment pristine or roll back the problems of the past. But it does mean we can supply technology and behave in ways that allow us to reduce the harm that is potentially being done to the environment without reducing the rate of human progress. That's why I'm passionate about reducing greenhouse gas emissions to the atmosphere. The scientific evidence and the forecastsmade on simulationmodels of the future increasing- ly show that if something isn't done, there will be an impact on the earth's temperature through manmade emissions. That's not a dead certainty, but the probabilities can't be ignored. People often debate whether the science behind these predictions is absolutely solid. I give the answer that Karl Popper would give: "All science is provisional." It's a bit like real life. You don't normally take out house- hold insurance after the burglar has been there. You take it out because, on the balance of probabilities, something may happen and you need to do something about it. 20 BizEd NOVEMBER/DECEMBER 2005 A number of business schools are starting to focus on corporate social responsibility and sustainable devel- opment, but it's still a largely overlooked field of study. How do you think business schools should teach sustainable development? I would first say it's very important to study it as part of busi- ness, not as separate from business. Students should not be taught a specialist subject on sustainable development that makes it feel like an elective. Because in life, it's not an elec- tive. Sustainable development should be an integrated part of making business decisions. Personally, I worry about the phrase "corporate social responsibility." While I completely agree with many of the themes behind it, the phrase sends the signal that corpora- tions could be irresponsible. In my view, to do business, corporations first have to understand their purpose, which is always about providing great goods and service so people will choose them over oth- ers. Second, they have to do business in a way that offers mutual advantage to the corporation and anyone it comes across. One way is to offer products with better features. At BP, we want to make gasoline go further and have less pollu- tion. In our exploration and production business, we want to use less steel in the platform. When we produce oil and gas, we make sure none of it escapes or is burned up unnecessari- ly. All of these measures provide mutual advantage. It's very important that these are considered part of business rather than separate pursuits. BP is investing R&D in solar energy and other alter- native energy sources. Is one of your goals to make sure you're in the energy business even if the energy business changes? What are the other benefits? Oil and gas themselves will last a tremendous amount of time, so we're also doing a lot of R&D on them. Can they be burned more cleanly? Can we recover them more effi-