Comment: How once-toxic brands won the respect of NGOs

The likes of McDonald’s and Sodexo are now widely praised for their willingness to engage on the big issues. By Robert Blood.

Half of the 20 companies most praised by NGOs so far in 2018 are in the food or grocery retailing business, while McDonald’s and Sodexo both made the top 10 in the second quarter of the year. This is not a flash in the pan – the same ratio for 2017 was 12 out of 20. In both lists, which Sigwatch updates quarterly, food firms and grocers sit alongside personal care, fashion and non-food retailers, plus a few financial services brands. Energy, chemical, mining and other heavy industry companies do not feature at all – but they do figure strongly on our sister lists, the companies most criticised by NGOs.

So what does our data tell us about the campaign trends affecting food and drink businesses? Which companies attract plenty of praise and which ones are on the NGO naughty step?

As you might expect, Unilever, being well regarded by campaigners, does very well in the “most praised” lists. It topped the 2017 list and is the highest-ranking consumer brand so far this year. However, several other food and retailing brands are not far behind, including Nestlé, McDonald’s and Walmart – three firms that not so long ago were generally demonised by social action groups and NGOs. Why the change of heart?

What our data has revealed is a sea change over the last 10 years in how campaigners view big business, and in turn how big business sees NGOs. In a nutshell, attitudes have shifted from mutual suspicion to willing engagement. Led by some of the biggest players such as Greenpeace, WWF and PETA, NGOs openly acknowledge that multinationals’ large and complex supply chains give them the capability to effect transformative change on how their raw materials, ingredients and parts are produced – if they are willing to act. In turn, more multinationals now accept they have a responsibility to ensure that their supply chains are demonstrably sustainable, and to address concerns such as labour abuse, animal welfare and modern slavery. The result is that big business has gone from being the enemy of NGOs to their enabler.

NGOs are therefore much less likely to view multinationals purely as a problem for the environment and humanity. More now see them as a force for positive change – at least potentially. Indeed, NGOs still believe firms need to be chivvied and sometimes harassed to “do the right thing”. Even the NGOs’ favourite, Unilever, is still criticised as much as it is praised: challenged to do the right thing (it doesn’t help that Unilever has created such high expectations of its performance), praised for having done it, and then cited as a positive example to put pressure on laggard competitors.

As such, previously “toxic” brands such as McDonald’s, Nestlé and Walmart are attracting positive regard from NGOs because of their strong commitments on sustainable sourcing, climate and animal rights. Campaigners like to see major brands leading the way, and are therefore more than willing to hold them up to the rest of the world as role models. The success of once troubled brands in attracting NGO praise also shows that campaigners are more impressed by action than by legacy.

It is also no accident that major firms in the food, personal care and retailing sectors are doing much better at winning the praise of NGOs than their counterparts in heavy industry and extractives. Consumer-facing companies are imbued in a culture of consumer responsiveness. Being alert to and responding to evolving customer tastes is in their genes.

Consumers, and especially millennials, seem to be increasingly sensitive to the environmental and social responsibility of big business. They may not yet be taking their consciences to the till, but they are expressing strong opinions, not least in terms of which ones they are prepared to work for. It is well known that Unilever today finds hiring staff especially easy (and their employees command a premium when changing jobs), while Nestlé’s graduate recruitment struggled when the campus boycott campaign against infant formula was at its height.

Winning praise from NGOs is not, of course, the reason for pushing forward on environmental, social and corporate governance. However, its presence is a powerful indication that your efforts are being noticed by the people who count. NGOs are highly networked with other NGOs and other stakeholders including politicians, officials and professional investors. If NGOs are praising you, it is likely that their positive comments are being widely heard, so it is worth ensuring that NGOs know what you are doing.

Robert Blood is founder and managing director of Sigwatch.

 

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