Olympic Sponsors BP, EDF to Restore Confidence

BP Plc (BP/) and Electricite de France SA will be using their London 2012 Olympics sponsorships to shake off associations with oil spills and reactor meltdowns.

BP, an official sustainability partner based in the host city, is rolling out biofuels made from sugar cane and grasses to fuel to more than 5,000 vehicles. EDF, Europe’s largest nuclear generator and owner of 15 U.K. reactors, will supply power as London seeks to map and limit the carbon dioxide footprint of the games for the first time. EDF was named an Olympics partner in July 2007 and BP signed on a year later.

Since then, the meltdown of three reactors at the Fukushima Dai-Ichi plant in March last year and the 2010 Macondo oil spill in the Gulf of Mexico drew global attention and outrage. EDF shares have dropped about 50 percent since the accident in Japan, while BP is 30 percent lower than it was before the Gulf disaster. London 2012 is an opportunity to restore confidence in their brands, according to Jonathan Reynolds, a director at Said Business School’s Oxford Institute of Retail Management.

“The Olympics is rich in analogies and metaphors which can help businesses reestablish themselves,” Reynolds said in a telephone interview. “It is a large and specific event -- not just a general value halo effect -- and there are relatively few of those events around.”

Source: BP

London 2012 Olympic Games sponsorship event. Close

London 2012 Olympic Games sponsorship event.

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Source: BP

London 2012 Olympic Games sponsorship event.

$1 Billion Sponsorship

London Olympics organizers raised more than 700 million pounds ($1.1 billion) in domestic sponsorship, including from shopping mall-owner Westfield Group (WDC), British Airways and BT Group Plc. Bidding for the seven tier-one sponsors started at 40 million pounds. Neither EDF nor BP would comment on how much they paid to be associated with the games.

“Companies like BP and EDF use events like the Olympics, which are seen as universally positive things, and their businesses are not universally positive,” Greenpeace Senior Climate Advisor Charlie Kronick said in an interview. “If BP wants to trial advanced biofuels they’ve got thousands of petrol stations around the country. They’re taking advantage of the highest-profile event in the country to blow the trumpet for something that’s a tiny part of their business.”

BP’s biofuels will be mixed with gasoline or diesel at a concentration of as much as 24 percent, resulting in about a 10 percent improvement in carbon dioxide emissions, Mike Sharrock, the company’s London 2012 (CSUZ) partnership director, said.

Positive Event

“The London 2012 sponsorship has enabled us to get involved in a hugely positive event and put lots of energy into that,” Sharrock said in an interview, adding the games aren’t linked to BP’s clean-up in the Gulf and the company didn’t consider stepping back after the disaster.

EDF said April 23 that 80 percent of the electricity for the games will come from its existing nuclear fleet, with the remainder from renewable generation assets.

“Events at Fukushima made it even more important for us to engage people in an open dialogue about the role of nuclear as a part of a low carbon supply mix,” EDF Energy’s London 2012 Program Director Gareth Wynn said in an interview. “Our partnership with the Olympic and Paralympic Games is one way in which we can help stimulate an informed debate.”

The total emissions footprint of London 2012 will be around 3.4 million tons of carbon dioxide, which includes pollution caused by travel, according to David Stubbs, head of sustainability for the organizing committee. About 430,000 tons will be caused by the event itself. Efficiency measures will offset failed plans to get 20 percent of the power used from on- site renewable energy projects, Stubbs said.

No More Renewables

“The nation will get no more renewables as a result of EDF and the London 2012 Organizing Committee’s work on the Olympics,” said Shaun McCarthy, who chairs the Commission for Sustainable London 2012. “Nuclear may be lower carbon, but they’re not adding anything new, so it’s not contributing to the U.K.’s lower carbon agenda.”

Events from decades earlier are still haunting another Olympic sponsor. Dow Chemical Co. (DOW), which signed a 10-year sponsorship agreement with the International Olympic Committee in 2010, should be removed because the 1984 Union Carbide Corp. gas leak in Bhopal that killed thousands of people, the Indian Olympic Association said in a letter to the IOC in December.

“The very presence of this company is against the spirit of the Olympic ideals,” acting president Vijay Kumar Malhotra wrote. The IOC said it had considered the tragedy when discussing the partnership with Dow, which will make a fabric wrap for the Olympic stadium.

‘Toxic Stain’

“As the company that now bears responsibility for the Bhopal tragedy, Dow is not a sustainable company,” said Meredith Alexander, who resigned from the Commission for a Sustainable London 2012 over the dispute. “The decision to give Dow the wrap contract is a toxic stain on the conscience of London.”

Dow Chief Executive Officer Andrew Liveris said opposition to the sponsorship is “beyond belief” because his company acquired Union Carbide 17 years after the accident.

In Gulfport, Mississippi, Derrick C. Evans, a managing adviser at the Gulf Coast Fund for Community Renewal and Ecological Health, says he’s still getting over the fact that BP is a sustainability partner.

“What’s important is that Olympics not be an event or opportunity for bad behavior to be camouflaged,” Evans said in an interview in London. “If you lay down with dogs, you get up with fleas. The connection with BP is just egg on the face of this city and country.”

To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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