It was about a decade ago when British Petroleum became bp. And bp came to stand for beyond petroleum, signalling a break away from a corporate strategy that concentrated on fossil fuel extraction and exploration to one that pursued environmentally friendlier energy mixes, in particular with solar energy (hence, the green-ish sun as logo). With this new name and an endorsement of renewables, the company sought to reinvent itself as a good corporate citizen.

Like regular virtuous citizens, good corporate citizens act socially responsible. They benefit society in ways that go above and beyond what companies is legally required. Beyond the rebranding, bp does a lot of things a good corporate citizen should be doing. As early as 1997, the company left the climate-denying Global Climate Coalition and became – 10 years later – a founding member to the US Climate Action Partnership, a business-NGO advocacy group for progressive climate policy. Since 1998, it reports on its sustainability performance. Moreover, the company, helped by the NGO Environmental Defence, introduced an internal carbon trading system to reduce its emissions and it sought advice for ‘greening’ oil extraction by the NGO Conservation International.

What a good, green citizen should not have to do, however, is what we observe in the Gulf of Mexico since April 20 – bp desperately trying to deal with an oil spill from its rig Deepwater Horizon. While it is not entirely clear what happened, the good corporate citizen bp may have acted carelessly if not in violation of operational rules: It used, partly for financial reasons, a particular type of casing to seal the well rather than a safer alternative. In fact, Deepwater Horizon has not been the only oil-related incident that happened ever since British Petroleum moved beyond petroleum. A trail of accidents, including the Texas Refinery explosion (2005), as well as oil pipeline leaks in Alaska 2006-2008, does not fit well with bp’s green image.

All the benefits of being a good corporate citizen, such as a greener image attracting more motivated staff, more value-driven customer loyality, and the like, are at risk now. Even more impressive, the existence of the entire company is at stake. This is not only because of the expected clean-up and compensation costs (a worst-case scenario expects $12 billion for the clean-up alone), the mockery about green image campaign, or the threat of criminal enquiry by the government. Due to a 34% fall in share prices, bp may ultimately be taken over by a competitor.

Intriguingly, in contrast to what advocates of corporate social responsibility (CSR) say, some research on ethical investments has shown that it pays to be bad. A case in point is oil giant Exxon, the arch enemy of many environmentalists. It has been more profitable than the greener Shell and bp (not necessarily ‘because of’ being bad but at least ‘in spite of’). Even after the Exxon Valdez disaster, regardless of adverse reputational effects, its share prices held on well – in comparison to those of BP after the current spill.

Why does bp suffer more than the conspicuously ‘evil’ Exxon? One of the main problems may in fact be its commitment to being more socially responsible. Once such a commitment is made publicly, e.g. through adverts, sustainability reporting, mission statements, the public, especially NGOs, scrutinizes such companies more intensely and holds them acccountable to these standards. In such an environment of public scrutiny, not only violations of regulations but even the choice of less safe methods potentially leads to particularly severe backlashes.

This becomes particularly problematic in the case of high-complexity industrial operations such as deepwater offshore drilling. Yale sociologist Charles Perrow argues that systems are bound to fail if they are interactively complex so errors interact with each other in unexpected ways, and if they were tightly coupled so we could not slow them down or shut them off. Intriguingly, bp’s Vice-President for Deepwater Operations, David Eyton, noted in 2005 that “if we’ve learned anything so far about the deepwater Gulf of Mexico, it is that it contains surprises. And that means an operator needs depth — depth in terms of resources and expertise — to create the capability to respond to the unexpected”.