Activism and NGOs

When a top Bank of England official said last year that the Occupy movement had been right to attack the global financial system, no one objected. Business leaders know that activists and campaigners often command greater public support than they do.

“Occupy has been successful in its efforts to popularise the problems of the global financial system for one very simple reason: they are right,” Andy Haldane, the BoE’s executive director for financial stability, told a meeting of students, protesters and bankers.

The Occupy movement, whose members camped on the streets of New York and outside London’s St Paul’s cathedral, has not had the staying power its supporters hoped for and its business opponents feared.

But the occupiers are part of a long tradition. Businesses have had to answer to, and occasionally co-operate with, campaigners for years.

Activist groups have changed company policies. Nestlé, the food company, had to limit its marketing of infant milk formula in the face of protests that it was encouraging mothers in the developing world to feed their babies contaminated water rather than breast milk.

In the 1990s, Shell bowed to pressure from environmental group Greenpeace to break up its Brent Spar oil-storage facility on land rather than at sea, which it had thought was better for the environment. Greenpeace later admitted it had got some of its figures wrong.

The Brent Spar affair told business something important: the public was more likely to believe non-governmental organisations than companies – even, in many cases, when companies had the stronger arguments.

Faced with the difficulty of getting their views across, many companies opted to co-operate with the campaigners. They used NGOs to verify their products, to demonstrate they were kind to rainforests, fair to small farmers or were not depleting fish stocks.

Sportswear and clothing manufacturers worked hard to persuade campaigners they were inspecting their subcontractors’ factories to ensure abuse of workers and employment of minors were not taking place. Nike published the names and addresses of its subcontractors online and encouraged campaigners to tell it where it needed to do more.

In private, companies sometimes grumble that NGOs are not subject to the same scrutiny and their claims are often not challenged. Companies know, however, that, rightly or wrongly, the public trusts NGOs more.

The Edelman Trust Barometer, an annual measure of attitudes to different institutions, found this year that while trust in business generally was quite high, only 18 per cent of the public worldwide trusted business leaders to tell them the truth. More than 50 per cent of people trusted NGOs in most countries surveyed, but that figure was far higher in emerging markets. In Mexico, 83 per cent trusted NGOs. In China the figure was 81 per cent.

Assessing the likely environmental and social impact of any corporate policy is an intrinsic aspect of doing business today.

Michael Skapinker