There can be few more pathetic sights than BP CEO Tony Hayward squirming his way through a congressional hearing on the Gulf of Mexico disaster. What was most striking about Hayward’s performance was how far removed he was from the archetypal Captain of Industry we would expect to be leading such a huge corporation. He looked more like a student up in front of his Vice-Chancellor trying to explain a drunken prank gone wrong. And his earlier bleat that he “just wanted his life back” was reminiscent of a teenager moaning about being sent out to clear a blocked drain. BP is the fourth largest company in the world, we asked ourselves, how on earth did he end up in charge?

Six years ago, under ex-CEO Lord Browne, BP rebranded itself “Beyond Petroleum”. This was intended to signify a switch from the fossils fuels of the past to the low carbon technologies of the future. Initially they made some good noises – cutting emissions from their processes and investing in renewable energy. But they made a fundamental mistake - they didn’t give up their reliance on oil as their core business. The backlash from environmentalists and the media was ferocious and the phrase “Beyond Petroleum” is now used contemptuously as the classic example of greenwash.

Under Hayward many of the renewables investments have been quietly binned and BP continued business as usual. In the meantime a whole raft of BP executives, dubbed the “Beyond Petroleum Generation”, have jumped ship to join renewable energy start ups. Former Head of Refining Cynthia Warner said “it was better to create the key to the future than to nurse along the dying past.” Maybe this is what happened to BP’s talent pool – they lost the people with the gumption to realise that business as usual was not an option and who had the entrepreneurial nous and drive to make change happen. Leaders, in other words.

In most businesses “the environment” is an issue to be managed. Managers set up and run environmental management systems, they obediently commission environmental impact assessments for major projects, and they ask their staff to switch off their computers at night. As far as the managers are concerned, as long as the boxes are ticked, all is well.

We cannot manage our way to sustainability. Whichever sustainability target we choose – an 80% reduction in carbon emissions, a ten times improvement in how efficiently we use resources, or a wholesale switch to mimicking nature’s solar powered cycles of material – the change required is immense. Big change requires leadership, not management. And what most people fail to grasp is that leadership means not only starting doing good stuff, but stopping doing bad stuff.

There are a handful of business leaders showing how to do green properly. Ray Anderson, CEO of carpet tile giant Interface, has declared that the company will have a zero ecological footprint by 2020. The company has not only developed invested heavily in renewable energy, developed a raft of greener products and set up recovery schemes for old carpet to ‘close the loop’, they have also killed off many product lines which aren’t compatible with that totemic goal. Outgoing Chairman of Marks & Spencer, Sir Stuart Rose, put £200 million of commitment into the company’s Plan A sustainability programme. M&S have not just tinkered around the edges but have started building whole new supply chains for recycled yarn for their clothing. Tesco’s retiring CEO Sir Terry Leahy has made and kept a strong commitment to green up its act despite the recession. Along with other major retailers like WalMart and IKEA, Tesco is driving changes down through its supply chain.

It is this type of leadership we require to tackle the big three environmental pressures breathing down our necks – climate change, resource depletion (including peak oil) and plummeting biodiversity. Our political leaders made a show of leadership at Copenhagen in December, but their intentions fell short. Given the sheer economic power and reach of global corporations, there is a strong argument that business can deliver where politics has had lukewarm success.

True business leaders like Ray Anderson, Sir Stuart Rose and Sir Terry Leahy have shown the way. But the energy sector as a whole has dithered – not just BP, but Shell too, while ExxonMobil is barely out of denial. The renewables industry remains at the plucky little guy stage, striving for the elusive tipping point. Big Oil has the resources to accelerate the transformation, if only they had the will. So, will any of their Chief Executives show true leadership and step up to the mark? If they don’t, they could well end up not so much the fossil fuel industry, but the fossilised fuel industry.

Gareth Kane is the director of Terra Infirma Ltd and the author of The Three Secrets of Green Business. E-mail: gareth@terrainfirma.co.uk

Contact: Gareth Kane, 0191 265 7899, gareth@terrainfirma.co.uk

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