Operation Total Makeover

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Droves of companies are adopting similar regimes these days, especially in Europe. Corporate social responsibility (CSR) and sustainable development are the buzzwords of the movement, and they have spawned a fast-growing industry of consultants, accountants and legal and p.r. specialists. All but six of the U.K.'s largest 100 companies now publish details of their environmental or social policies. Some firms, including Total's European rivals Shell and BP, are even making ethics a focal point of their marketing. "Profits. Principles. Or Both?" reads the tagline on a series of recent Shell ads. The big question, as Dairon suggested, is whether all this marks a tangible change in the way corporations behave, or whether it's simply "greenwash," a p.r. exercise designed to make firms appear sensitive to consumers concerned about the impact of globalization.

Why is Total's move toward corporate responsibility happening now? The main reason is that they're feeling pressure from investors, not just activists. There's a small but growing industry of politically attuned stock funds in Europe — with an estimated $40 billion under management — which only invest in companies they consider to be socially responsible. But there's also a far larger universe of mainstream institutional investors in both the U.S. and Europe who have started to look at corporate behavior post-Enron as part of their overall performance reviews. Total is playing to this crowd. "Investors want the best possible investment. Even if ethics is not their cup of tea, they consider companies that take into account good ethical principles to be well managed," says Jean-Pierre Cordier, the senior Total executive in charge of the ethics drive. A few years ago, Cordier says, many in the company would have viewed an ethics push as an unnecessary expense and a distraction. Now, he says, "everyone understands this is really a part of the business."

Even so, such efforts are unusual in the notoriously dirty oil business. Evidence of alleged bad behavior abounds: this year alone, a U.S. consultant and a former Exxon Mobil executive have been indicted in New York City, the chairman of Norway's Statoil resigned amid bribery charges and a former chief executive and two senior officials of France's Elf Aquitaine — now part of Total — were convicted in Paris, all for separate corruption-related offenses.

Unlike consumer-products companies such as Nike, which moved relatively quickly to deal with allegations of unethical labor practices in the mid-1990s, Big Oil long resisted calls to clean up its act. BP and Shell were the first to change. In Shell's case, the firm was shaken by two scandals in quick succession: the execution in 1995 of Nigerian poet Ken Saro-Wiwa, who vigorously contested Shell's oil operations in Nigeria, and the company's plans that same year to sink the Brent Spar oil rig in the North Sea. Both sparked huge international protests and boycott calls that led to a change of management and a complete revamp of Shell's ethical standards and operating behavior.

Disaster is also behind Total's ethical epiphany. In December 1999, when the oil tanker Erika sank off Brittany, spewing Total oil up and down the French Atlantic coast, French TV showed agonizing pictures of oil-drenched beaches and suffocating seabirds. For two long weeks, Total stood behind the thin excuse that the tanker did not belong to the company. "What we didn't know at the beginning was that we had a genuine catastrophe on our hands," said Thierry Desmarest, Total's chief executive, later.

To re-establish credibility, Desmarest put in place a high-level team charged with devising new standards of behavior and ensuring they are implemented. Cordier, 56, was appointed ethics czar and set up an ethics committee in 2001. He reports directly to Desmarest, and his committee has written a new code of conduct — with provisions that ban employees from getting involved in local politics or accepting large gifts — and initiated Dairon's ethics road show.