Can climate change activism genuinely affect business?
Extinction Rebellion and Greenpeace regularly highlight poor corporate practice on climate change. But does this truly affect share price and drive climate-positive change?
In today’s business environment, it’s common to see stories where Greenpeace or Extinction Rebellion boycott, close or indeed scale corporate buildings; shining a light on what they consider to be unsustainable climate practice.
But the story less told concerns whether such actions actually influence shareholders, hitting firms in the pocket and driving action through investor concern.
Does environmental lobbying truly engender change?
Some interesting research is out there to help answer the question. A volume available on google books, ‘Capital Market Campaigning; The Impact of NGOs on Companies, Shareholder Value and Reputational Risk’ goes into the subject in some depth.
It explains that Greenpeace commissioned a consultancy to assess BP’s climate change risk. By then alerting shareholders to the materiality of climate change and financial risk, Greenpeace prompted the likes of Barclay’s Global Investors and Morley Fund Management to meet BP and review its climate change strategy.
After this, BP ran its first climate change tech presentation highlighting its renewables and carbon sequestration efforts.
The book assesses this as a clear example of climate change related influence on investors. Remember, this success relied upon Greenpeace talking directly with shareholders, rather than simply demonstrating, lobbying or camping outside corporate headquarters.
Today, Greenpeace are still at it. The Guardian reports that early in 2020, Greenpeace members blocked BP’s headquarters with solar panels and oil barrels to mark Bernard Looney’s first day as chief executive.
‘About 100 environmental activists took 500 solar panels to the central London building at 3am on Wednesday as Looney prepared to take up his new role. Some protesters sat underneath the solar panels after they were prevented from installing them on the pavements and roads near the office,’ it writes.
BP has frequently been challenged by climate change activists, who have targeted its sponsorship of art institutions and its alleged lobbying. Protesters from Extinction Rebellion have targeted the Royal Opera House during a BP-sponsored screening of Romeo and Juliet.
And last year, the Royal Shakespeare Company (RSC) ended its partnership with the oil company, which had sponsored the theatre’s £5 ticket scheme for 16 to 25 year olds.
There seems therefore to be concrete evidence that non-governmental organisations (NGOs) can really cook up trouble for corporates. In a joint statement, Gregory Doran, the RSC’s artistic director, and Catherine Mallyon, its executive director, said the decision had been taken after a “careful and often difficult debate” internally.
They added: “Amidst the climate emergency, which we recognise, young people are now saying clearly to us that the BP sponsorship is putting a barrier between them and their wish to engage with the RSC. We cannot ignore that message.” The sponsorship deal concluded at the end of 2019, some two years earlier than planned.
Does NGO action truly affect business share prices?
Talking with The Guardian in a 2019 story that finds very successful firms often breach environmental and social regulations, Di Fan, a senior lecturer at the business school of the Australian National University, said “Practicing good CSR is an expectation from customers and shareholders.
“If any CSR scandals come out, the share price will decrease.” That seems a pretty concrete affirmation that when NGOs raise a ruckus, share prices can be impacted.
All the evidence points to one conclusion; NGOs can genuinely damage a firm’s reputation and they can hit global multinationals in the pocket hard through targeted and professionally run campaigning.
The impact of the occasional demonstration or throwaway stunt however might be less tangible. For the NGOs to really influence corporates, it seems they also need to add professionalism to their climate campaigns in the long term, over work that spans years, not days.