As SIGWATCH’s Robert Blood explains, the three insurance firms are out-performed only by Unilever in this year’s index of companies most praised by NGOs while the food giant wins praise and condemnation in equal measure
SIGWATCH, the NGO tracking and issues analysis consultancy that I lead, has been tracking activists’ attitudes to named corporations since 2010.
One of the most interesting trends emerging over this period is the widening gap between NGOs’ positive appreciation of consumer brands and their even louder criticism of heavy industry, especially firms in the extractives and chemicals sectors.
The number one reason is climate change. Faced with continued hesitation, faintheartedness and sometimes outright policy reversal by governments on the most challenging environmental problem of our age, activists have turned to businesses to do the job that many politicians are refusing to even consider. This is a sea-change from the pre-2000s, when campaigners almost universally assumed that business was antithetical to saving the environment and big business was hellbent on destroying it.
An increasing number of multinationals are seen by activists less as obstructionists and more as collaborators
At the same time, the activists’ credo of sustainable consumption and respect for nature and human rights is getting through to consumers – or least, that’s what business believes. If the change is not yet great enough to affect buying behaviour, it is affecting the agendas of investors, politicians, the media and other critical stakeholders. And in some ways, this is having an even greater impact on the mindsets of senior management.
The upshot is that on many issues, an increasing number of multinationals are seen by activists less as obstructionists and more as (witting or unwitting) collaborators. Leading firms are lending their market power to raise standards and implement activists’ agendas, and pragmatic NGOs are returning the compliment (and encouraging them to do even more) with public praise and pressuring rivals to follow their example.
True, there is a whiff of “divide and conquer” here. Yet as a strategy for mobilising highly competitive businesses to do the NGOs’ job for them, it is little short of brilliant.
You are probably tired of hearing Unilever’s praises sung again, yet it is a fact that it was the first mainstream company to be widely admired by campaigning groups. Today it is no longer alone. As the 2018 NGO most praised rankings reveal, while Unilever is again in the top spot, Nestlé and McDonald’s are also highly praised, and by many of the same activists who little more than a decade ago considered them beyond the pale. This says a great deal about how such firms have changed, and how pragmatic today’s activists have become.
McDonald’s is an especially striking example. Gone are the days when McDonald’s CEO allegedly defended his firm’s refusal to engage with anti-animal cruelty activists Peta with the argument, “vegans are not exactly our core demographic”. Now the chain offers vegetarian options and boasts some of the highest animal welfare and sustainable sourcing standards in the business, and NGOs are happy to acknowledge this in their campaigning.
Although FMCGs (fast-moving consumer goods) and retailers are the most likely to be favoured by NGOs, three financial institutions did elbow their way into the top 10 in 2018, all for the same reason: quitting coal. Ending the use of coal is the number one objective of climate campaigners, but they know that targeting the coal miners and power generators is a long game. Replacing power plants takes decades and mining firms are unlikely to willingly abandon their sole livelihood.
Activists believe the coal industry can be pushed into early collapse if they can make enough large investors and pension funds pull out of coal
Activists are undeterred. They believe that the coal industry can be pushed into early collapse if they can make enough large investors and pension funds pull out of coal, and in the case of underwriters, stop insuring coal businesses. Since underwriters are typically also institutional investors, it is illogical to do the one without the other.
While FMCGs and retailers dominate the ranks of the most praised corporations, energy companies dominate the most criticised.
American oil and gas pipeline companies have been under heavy attack from campaigners in 2018, largely for strategic reasons: while activists can’t get Americans to use less oil and gas, they can make it difficult for producers to move their product to refineries and markets. Pipelines and other infrastructure make great set-piece battles, too. Each day of delay drives up costs and deters others, and can be achieved with a few dozen activists.
A few non-energy firms made it into our top 10 most criticised too, most notably Google. This is the first time a tech firm has done this (even Facebook has so far avoided this humiliation). The reason? Concern about its lack of digital privacy and, most recently, its alleged willingness to rewrite the code for its Chrome browser so it would censor searches for users in China deemed unacceptable by the authorities.
Nestlé, Coca-Cola and Walmart also make it onto the 2018 most criticised list, with single-use plastics a common area of complaint. The presence of Nestlé, also one of 2018’s most praised brands, goes to show that even substantial praise from activists is not sufficient to ward off all criticism, even when the same issues are involved, like palm oil. Activists not only disagree amongst themselves, they also have differing priorities.
To paraphrase the famous saying, you can please some of the activists some of the time, but you can’t please all of the activists all of the time. There’s no shame in being fairly criticised, as long as the good things you are doing are also recognised.
Robert Blood is managing director of SIGWATCH, which tracks the activities of over 9,000 NGOs across the world, identifying emerging issues and quantifying their impact on corporate targets and industry sectors. Financial services firms constitute a third of their clients, which also include many of the world’s leading multinationals. www.sigwatch.com