In recent years we have seen numerous companies suffer reputation and brand damage as a result of actions or inactions by company executives and employees. For example, in 2015, the top 10 brand scandals according to Inc. online involved a wide variety of companies and personalities including Amazon, Bill Cosby, Comcast, The Duggars, FIFA, McDonald’s, Nestle, Turing Pharmaceuticals, VW, and Yum.1
BP’s safety advertising campaign
Recently, BP has been running television commercials featuring “safety” and BP’s “Commitment to the Gulf” during national prime-time evening news. An Internet search revealed that BP has a series of likeminded commercials.2 All of the commercials come across as enhancing BP’s safety and community relations image. None of them involve selling a product other than projecting a “touchy-feely” message toward BP.
After watching these commercials, I wondered, why in the world would BP go to these rather unique and expensive lengths to promote a positively re-tooled attitude toward safety along with reassuring Gulf coast residents that BP is committed to the region following the Deepwater Horizon incident? From a safety standpoint, I believe this is one of those rare moments, albeit the ONLY moment I can recall, when a company staked the revitalization of its corporate image on the shoulders of safety. Since the BP oil spill, where 11 people were killed, there has been a great deal of on-going bitterness from those harmed by the spill as well as significant resentment from BP regarding those who have received compensation for alleged harm. I understand the BP safety message being conveyed; however, I fail to see the relevance of the message to a national audience – since most have no association with safety in the context of exploration or refining. Indeed, most “people-on-the-street” would expect a company like BP to care about the safety of their employees as a given.
CEOs are focused on reputational risk
According to a Deloitte 2014 Global Survey on Reputation Risk3, of 300 executives surveyed, from companies representing every major industry and geographical area, 87 percent rated reputation risk as “more important” or “much more important” and 88 percent say they are explicitly focused on reputation risk as a key business challenge.
Reputation risk based on the survey was directly associated with risks related to ethics and integrity, security, followed by product and service risks, such as risks associated with safety, health, and environment. Survey respondents strongly agreed the responsibility for reputation risks resides in the boardroom and the C-suite.
Companies surveyed believe they are most prepared to manage risks within their control – 69 percent regulatory compliance and 68 percent employee misconduct. And as far as least prepared for risks beyond their direct control – 44 percent said hazards or other catastrophes. Of those companies that have experienced a reputation risk event, 41 percent said the loss of revenue was the biggest impact and 41 percent said they lost brand value. Thirty-seven percent said regulatory investigations were a major consequence. Granted these regulatory investigations were not all EHS investigations, but certainly some of the investigations involved EHS issues.
EHS pros must expand their focus
So what does corporate reputation have to do with safety anyway? Good grief, don’t safety professionals have enough to do without worrying about corporate reputation for crying out loud? In two words, YES, BUT! The results of the Deloitte survey and the scrutiny corporations are receiving from regulatory agencies, consumer advocacy groups, and the mainstream media indicate a need for safety, health, and environmental professionals to consider their contribution to their organization in the framework of reputation risks. In this columnist’s opinion, the EHS professions need to break away from the mental paralysis we have endured for decades thinking that all we need to do is re-package what we have been doing and do it harder.
Steps to take
Deloitte provides a framework it calls the Risk Sensing approach for business where I believe EHS professionals could add value to a risk scanning, sensing, and tracking program.4 Deloitte offers the following four steps when implementing a Risk Sensing program, which I have taken the liberty to state in a EHS context:
- Identify the EHS risks to be monitored and the scope of the effort.
- Define the elements required to enable strategic EHS monitoring – applications, human resources, workflows, and stakeholders.
- Configure the platform to enable scanning, analyzing, and tracking of EHS risks.
- Continue monitoring the EHS data sources and generating ongoing EHS risk insights.
In considering Deloitte’s Reputation Risk survey results from a EHS perspective, EHS professionals should consider framing their work in the context of corporate reputation risk to complement the risks being tracked by the business for the purpose of remaining in business and succeeding.
It is critical in this columnist’s opinion that EHS professionals need to evolve in our thinking and contribution to the corporations that employee us. We also need to become more involved in the scanning, sensing, and tracking of EHS risks our corporations face, offering innovative approaches to controlling or eliminating those EHS risks or, at least, minimizing the potential consequences of those risks.
References
- James, G. The Top 10 Brand Scandals of 2015. Inc. Marketing. 26 September 2015. Retrieved from http://www.inc.com/geoffrey-james/top-10-brand-scandals-of-2015.html.
- BP Safety and Commitment to the Gulf commercials. Retrieved from https://www.ispot.tv/brands/dJG/bp.
- Deloitte. 2014 global survey of reputation risk Reputation@Risk. October 2014. Retrieved from http://www2.deloitte.com/global/en/pages/governance-risk-and-compliance/articles/reputation-at-risk.html
- Deloitte. Risk Sensing The (evolving) state of art. Retrieved from http://www2.deloitte.com/global/en/pages/governance-risk-and-compliance/articles/risk-sensing.html
