Corporate Irresponsibility: Dow Chemical Promotes Climate Hype Instead of Drill, Drill, Drill

Posted: Sep 06, 2008 12:01 AM
Corporate Irresponsibility: Dow Chemical Promotes Climate Hype Instead of Drill, Drill, Drill

Just as good political advertising can sway an election, effective ads on issues such as energy can move public opinion and Congress. At a time when the soaring price of energy has public sentiment strongly in support of off-shore oil drilling, corporations have a unique opportunity to drive home the importance of developing domestic natural resources. With corporate profits being stung by the high cost of energy, aggressive advertising promoting fossil fuels is in the corporations’ self-interest.

Yet companies are squandering this opportunity. Why? Because liberal CEOs have adopted the leftist-inspired definition of corporate social responsibility (CSR), which is characterized by commitments to combat global warming. As a result, companies promote efforts to cut greenhouse gases rather than advertise the economic and social benefits of domestic energy exploration.

But by reinforcing the war against fossil fuels, CEOs are harming their shareholders, their employees and the economy.

The Dow Chemical Company provides an excellent example of a self-defeating CSR policy.

Because its profitability depends on cheap supplies of fossil fuels, Dow should be a leader in advertising the benefits of fossil fuel exploration. High fossil fuel prices harm Dow by raising the cost of the natural gas and petroleum it uses while reducing demand for its products in the automobile and housing industry.

Indeed, the impact of high energy prices on Dow is palpable. MarketWatch reported Dow’s 2nd quarter profits fell because “…the surge in raw-materials and energy prices added $ 2.4 billion to its overall costs compared with the first three months of 2008 and the company reported a 27% decline in profit.”

However, advocating greater and more economical supplies of fossil fuels would conflict with the CSR strategy designed by Dow’s liberal CEO, Andrew Liveris. As a result, not only is Dow wasting its money on touchy-feely CSR ads, but it is also a member of the United States Climate Action Partnership (USCAP) – the coalition of industry and environmental activist groups seeking federal cap-and-trade regulation to address global warming.

Dow’s corporate advertising campaign is strikingly pathetic. Launched in 2006, “The Human Element” campaign is intended to “reintroduce the company and announce... its vision of addressing some of the most pressing economic, social and environmental concerns facing the global community in the coming decade.”

Dow’s print ad on energy typifies its CSR theme:

“This is the chemistry of life. And when we see it for all of its complexity, and all its humanity, we discover the element of harmony. The Human Element. When added to the equation, even industry’s need for energy has solutions that are at peace with planet.”

The ad campaign was designed to demonstrate Liveris’ commitment to Dow’s CSR goals, including a promise that Dow will “advocate for an international framework that establishes clear pathways to slow, stop, and reverse emissions by all major carbon dioxide-emitting countries.”

Dow’s participation in USCAP is another puzzling element of its CSR strategy, given Dow’s dependence on fossil fuels. Cap-and-trade legislation would increase the cost of fossil fuels and reduce economic growth – two factors that hurt Dow’s earnings.

Nature abhors a vacuum and Al Gore – Mother Nature himself – is filling the pro-drilling advertising void with TV ads promoting the mystical goal of generating 100 percent of our electricity from carbon-free energy sources within 10 years. The Alliance for Climate Protection, a nonprofit started by Gore, announced it will allocate $300 million in advertising to promote government action to reduce greenhouse gas emissions.

The public is being bombarded with anti-fossil fuel messages from activists like Gore and CEOs like Liveris.

Most likely, Liveris was hoping that cap-and-trade legislation would result in a manageable escalation in energy prices that would allow him to use carbon credits earned from U.S. plant closings to pay for the cost of shipping jobs overseas, where energy is cheap. The unforeseen spike in energy prices caught him unprepared.

Astonishingly, given Dow’s lobbying for cap-and-trade energy restrictions, in a recent interview Liveris blamed the U.S. for what he considers a failed energy policy that “decided to restrict supply of our natural resources of this country.” He further said Dow would move jobs to “countries like the Middle East, countries like China, countries like Russia… these are countries that are worked out that their natural resources need to be value added in their country to create meaningful high-paying jobs.”

Liveris, born in Australia and not a U.S. citizen, has no loyalty to America.

To Liveris, corporate responsibility means using government force to subsidize the moving of American jobs to countries that oppose liberty.

If Dow was really responsible, its “Human Element” campaign would be replaced by “Energy Reality” ads promoting energy policies that would benefit the company, its stockholders and the U.S. economy.

If Congress prevents development of domestic natural resources, liberal CEOs like Liveris will share much of the blame.