The Story of an Environmental Incident -A Case Study of BP's Quarterly Reports during 2010

Abstract

Background and problem discussion: In the Gulf of Mexico on 20th of April 2010 there was a large environmental accident as an oil rig exploded and a huge oil spill occurred. An unforeseen event, such as an accident, may for example affect a company’s reputation and financial situation. Over the past century a number of major oil spills leading to disastrous environmental consequences have occurred. If a catastrophe is caused by a company, they must respond to and communicate with their stakeholders if not to reduce the reputational capital. If they do not provide the right type of information quickly, it may aggravate the crisis for the company. In this paper the authors examine how the crisis information presented by a company in its quarterly reports change during the year an accident occurred. Aim: The aim of this thesis is to find out how crisis information changes in companies’ quarterly reports. The authors wanted to understand what kind of information and what amount of information companies present, how they are affected by laws and IFRS frameworks, and if the companies express that they take responsibility for the occurred event or not. Method: The thesis is a case study of BP and their quarterly reports from 2010. The authors have made a content analysis of the quarterly reports and have focused on how a company described a crisis. Focus has been on aspects like the amount of information, if the company takes responsibility and how they refer to laws and regulations they have to follow. Empirical findings and conclusions: BP wrote in all of their reports that they follow the laws and the standards required. After the accident they wrote about what responsibility they took by presenting information about the actions for restoration they made, such as paying for claims and costs caused by the oil spill. The information between the reports two to four did not differ much other than for some exceptions related to amounts and specific occurrences during each period. The first report was not influenced by the oil spill and was not directly comparable to the other three reports when it came to the change of information concerning the oil spill. The authors made the conclusion that BP took responsibility for the work after the accident but not for the accident itself. BP used personal pronouns when they wanted readers to notice positive information and they sometimes used a mitigated language and wrote negative information by using long and more complex sentences. Suggestions for further research: Investigate the oil spill from medias point of view, or after a couple of years do another study about BP to see how the oil spill has affected the development of the company’s financial situation during these years.