What Makes Big Corporations Decide to Get on the Right Side of History?

For the past year, Oxfam’s Erinch Sahan (right) has been working on the ‘Behind the Brands’ campaign. Here he reflects onErinch Indonesia some successes and lessons from his time in the advocacy trenches.

On 19 May 1997, the CEO of BP, John Browne, made a speech at Stanford University. Browne: “We must now focus on what can and what should be done, not because we can be certain climate change is happening, but because the possibility can’t be ignored.” This was a game changer. Browne made BP the first multinational (other than re-insurance companies) to join the emerging consensus on climate change. He also committed BP to taking action on reducing its emissions.

Regardless of what you now think about BP’s rhetoric or practices, Browne changed the way companies talk about climate change. It’s now hard to find a mainstream company that doesn’t accept climate change is happening and is linked to our (human) activities. Yet why did Browne break ranks?

The answer, I believe, is that he saw it as inevitable. The science was becoming clearer, the public was becoming engaged and politicians were beginning to scramble about for a solution that showed they had a vision. The business world was entrenched in a position that was on the wrong side of history and Browne didn’t want to be dragged kicking and screaming to the right side. If you know you’ll be moved back to the cheap seats at a stadium, why not move before the security guards drag you over?

BtB ABF stunt Melbourne. Oxfam Australia. Photo-Lara McKinley low resOf course the rationale for why Browne flipped sides is more complicated than this. Maybe he saw money in solar energy, or wanted to shape the regulatory landscape around climate or had an altruistic voice that drove his decision. These probably played a role. But he also saw that climate action was becoming the new black in global politics and wanted to have the latest fashion before his friends and rivals.

The tide can turn quickly on global issues. One day, people defend child labour as being a route out of poverty, the next, it becomes unthinkable. It’s partly our role as activists and advocates to help along the debate so it reaches that tipping point sooner. That means persuading companies that the tipping point is coming. We think this is happening on living wage, as companies watch each other to see who moves first. Here’s how we did it through Behind the Brands.

We kicked off the campaign a year ago to change how the food and drinks industry buys its ingredients. This time last year, the industry was failing on a number of key issues, we chose two in particular: how it addresses women’s inequality and land rights. Scores (we have a scorecard quantifying their performance) were woeful and none of the Big 10 had an approach that addressed the plight of women working on farms around the world and none were making suppliers respect the rights of communities over land. In fact, they weren’t even paying lip-service to the importance of land rights.

We spent the last year reminding companies about these blind-spots, asking supporters (nearly 400,000 of them), investors representing billions of dollars and civil society to join us in urging the Big 10 to start addressing gender and land issues.

On land, led by Coca Cola, six of the Big 10 now endorse the principle of Free, Prior and Informed Consent on land acquisition. This is key in ensuring that communities have a say over what happens to the land they depend upon. Seven of the Big 10 have signed on to the UN Women’s Empowerment Principles, which demonstrates a commitment to ensuring that the industry starts addressing the barriers faced by women on farms and markets around the world.

Over the last year, what I’ve learned is this: build the case for why this is inevitable – make corporates worry that they’re on the wrong side of history. We alone don’t have the gravitas to do this. But companies targeted by Behind the Brands heard from pension fund managers and industry peers (such as retailers), they were asked why they didn’t have a process for understanding where land disputes might be popping up. They heard from shareholders at their AGMs and their brand managers saw that hundreds of thousands of their consumers were interested enough to contact them on social media to drive home the point. It’s the surprising number of angles that they heard from that generated the questions: “Are we missing something here? Has land rights become a mainstream issue?”.

BtB scorecard Feb 2014Today we release our annual update of the BtB scorecard, which underpins the campaign. The results are encouraging. Nearly all the companies are on the right track. All but General Mills have improved their overall scores since February 2013. The top three (Nestle, Unilever and Coca-Cola) separated themselves further from the pack and saw the biggest jump in scores with overall increases of 10 percent, 14 percent and 13 percent. The companies in the middle of the pack (Danone, Mars, Mondelez and PepsiCo) saw mild improvements. There were some improvements also at the bottom of the scorecard. Associated British Foods and Kellogg’s – previously ranked 10th and 8th respectively – saw increases in scores of 7 and 6 percent respectively. As a result, General Mills is now at the bottom of the rankings.

So if you want to shift corporate behaviour, build a surprising coalition (investors, activists, industry experts) and be persistent (“they will never want you to know you’re impacting them, but trust me, they’re listening” one senior manager in the sector told me).

With business practices so important to the life of every person on the planet and so key in driving the global agenda, we need to get even sharper at making change happen in big business.

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5 Responses to “What Makes Big Corporations Decide to Get on the Right Side of History?”
  1. P Baker

    A bit gob-smacked by this. Are you really suggesting that BP is on the right side of history?

    And just because big companies sign up to things, just how much difference does it make in the field? Has Unilever stopped buying palm oil from Indonesia and Malaysia? Has Nestle stopped buying coffee from deforested land in Vietnam, Indonesia and China?

    Seemingly your scorecard is based on ‘publicly available information’.
    That doesn’t really impress me all that much.

  2. Erinch Sahan

    Hi P, I think commitments to implement new practices can make a difference. For instance, among 270,other imdicators we assess whether they have grievance mechanisms for communities, women are specifically targeted for training programmes and whether they commit to buy Fairtrade (meaning the advantages of that certification scheme start flowing to farmers). On land we assess whether they require suppliers to acquire consent from communities before land is acquired, which we are already seeing change the process sugar producers use in buying land (for the first time in some cases, communities aren’t being completely ignored).

    Perhaps as important is that other civil society actors can start to see which suppliers link to which brands and can use the commitments of the brands to push for change on the ground. The scorecard is essentially a measure of openness of companies to disclose issues, their commitments and how they’re implementing these.

    None of this in itself solves the injustices of the food system but it’s a step in the direction of greater transparency and accountability.

    Re BP, I’m just exploring how they broke ranks from their peers on the climate change debate in the 90s. Not suggesting anything beyond that.

  3. Pete Hennessy

    Thanks for the good-news story!

    Of course I don’t expect perfect behaviour after a year, but with the scale that these companies have, I’m sure a small shift in the ways they work can have a big impact. Glad to hear your got investors joining in – I hope investment managers of ethical unit trust funds were particularly vocal?

    PS – the big question… is Cadbury Dairy Milk (fair trade) still more ethical than Nestle chocolate?

  4. Erinch Sahan

    Thanks Pete. Yes investment managers were quite vocal, from the ethical investment and the mainstream investment world. For the latter, it’s a risk to have investments in companies that are ignoring an increasingly important issue.

    Re Cadbury vs Nestle – Fairtrade is a huge plus, particularly for commodities that come from smallholders (like cocoa).