In mid-2015, Shell realized its project in the Chuckchi Sea, off the coast of Alaska, was in trouble. After nearly a decade of expensive drilling, it still hadn’t yielded results and increasingly strict regulations were making it harder to operate. Plus, there was the small issue of public opinion, which, inspired by an aggressive campaign by Greenpeace, was turning against the company.
Greenpeace started protesting the Chukchi Sea project in 2012, when activists occupied a Shell-contracted drillship headed for the Arctic. A couple of years later, climbers rappelled off a bridge in Portland, Oregon, to block an icebreaker vessel from leaving the port. And, in September 2015, it staged a weeks-long protest outside Shell’s headquarters in London, erecting a giant animatronic polar bear and enlisting the support of British actress Emma Thompson. Later that month, Shell gave up on its arctic dreams altogether, announcing it was ending the $7bn-effort.
Shell claimed the project was scuttled by poor results and an unpredictable regulatory environment. But Tensie Whelan, director of New York University’s new Center for Sustainable Business, said that a major cause was the pressure from Greenpeace and other activist groups. “The scrutiny of the Greenpeace campaign absolutely led to huge regulatory changes,” she said.
The Greenpeace campaign illustrates a larger trend: in recent years, NGO criticism – and praise – has had a measurable effect on corporate reputations and profits. Last month, Sigwatch, a consultancy that tracks campaigns by more than 7,500 NGOs, released its annual list of the companies most praised and most criticized by NGOs. For the fourth year running, Shell topped the most criticized list; according to the report, the drilling program was largely to blame.
Five of the 10 most criticized firms were energy companies, a trend that has held steady since Sigwatch first compiled the list in 2010. At the heart of this lies a fundamental conflict: environmental groups and activists want fossil fuels to remain in the ground in order to avert catastrophic climate change, but extracting oil and gas is the core of these companies’ business.
“The reason why oil companies aren’t praised is that they are beyond the pale,” said Robert Blood, founder and managing director at Sigwatch. “The NGOs’ view is that as long as oil and gas companies fail to acknowledge in their business models that carbon fuels are on the way out, and the only question is how long it will take – there is little point even talking to them, let alone praising them.”
According to Blood, this is unfortunate, because the world will continue to use oil for many years to come. During that time, drilling still has to be conducted in a safe and considerate manner. “This is an area where NGOs can help enormously with technical advice and working with oil companies to raise standards, but it’s no longer happening because of this impasse,” he added.
Surprising winners and losers
For the second year in a row, Nestlé was the world’s most praised company on Sigwatch’s list. NGOs honored the food and beverage company for its efforts in tackling climate change, its commitment to zero deforestation, and its efforts to clean up its supply chain. Nestlé was recently hailed as a “game-changer” for its voluntary admission to slavery in its supply chain in Thailand.
Other highly-praised companies were more of a surprise. McDonald’s – which topped the North American list and was ranked number three globally – did not even make the top 20 in 2014. According to the report, the fast food chain was commended for a number of recent changes to its operations, such as a reduction in its antibiotic usage, its decision to raise pay for its hourly workers and attempts to improve animal welfare.
But the company’s most notable move was its September announcement that it would phase out the use of eggs from hens housed in cages during the next decade. Given that McDonald’s purchases 2bn eggs annually in the US for use in its breakfast items, this was a huge victory for the NGOs – particularly Mercy For Animals – that had been pressuring the fast food giant to make the switch. In 2012, hidden camera footage was released from Sparboe Egg Farm – one of the McDonald’s suppliers – showing hens crammed into filthy wire cages, decomposing hens lying on the floor among live birds laying eggs destined for grocery shelves, and chicks being suffocated in plastic bags.
The bottom line
Shell, on the other hand, is experiencing the reverse: on Thursday, the company announced an 87% decline in annual profits. While Shell’s plummeting profits are partially due to the falling price of oil, the years of negative publicity surrounding the company have likely also had an effect, said Whelan. “A company that is making decisions in a way that flies in the face of public benefits and concerns, and does that consistently for a long period will pay the price,” she added.
Companies that willfully deceive the public are particularly vulnerable, said Annie Leonard, executive director of Greenpeace USA. Volkswagen – which had never been on Sigwatch’s most criticized list – made it all the way to seventh place after it rigged its cars to cheat on emission standards.
Oil company ExxonMobil also discovered the cost of dishonesty: it was ranked 2015’s fifth most-criticized company following a public scandalwhen it was exposed for misleading investors and consumers about the effects of climate change. “I’d say the corporations that generate the most ire are ones that not only pollute … but that proactively engage in untruthful behavior to further their polluting practices,” said Leonard.
According to Sigwatch, size is another major factor. The 10 biggest companies by market share in every sector, except finance, attracted 50-70% of NGO attention. This has a lot to do with efficiency: NGOs tend to have limited resources, so it makes sense to target the bigger companies. Once one notable player is called out for wrongdoing and makes a change, others tend to follow.
“With social media, environmental and social issues are really coming to the fore,” said Whelan. “If one company makes a major change and gets publicity for it, the others can’t just stand still while their competitor is moving forward.”
Technology has made it possible for the public to get more directly involved, enabling anyone with a computer and internet connection to run a campaign “for pennies”, according to Greenpeace’s Leonard.
For example, a recent rap video that urged Unilever to clean up alleged mercury pollution in southeast India was put together by activists and ex-workers. The video, which was shot on a shoestring budget in one day, has gone viral, attracting more than 3m views on YouTube. The campaign led Unilever to defend itself on Twitter, saying it was “determined to solve” the issue that allegedly left over 1,000 workers from a former thermometer factory owned by Hindustan Unilever with mercury poisoning.
“A creative website, homemade video, or online petition can all go viral, garner attention via earned media rather than paid, and have a big impact,” Leonard said.
In other words, the tools for influencing corporations, NGOs and businesses are increasingly in our hands.