Recent news around Canada’s tar sands, which are being used as a source of crude oil and have attracted a great deal of attention, made us consider the ways in which companies respond to the pressure put on them by NGOs.
Coalitions of institutional investors, including Co-operative Asset Management, have raised concerns with both Shell and BP over the companies’ involvement in the tar sands. In Shell’s case, it looks like the company may be reducing its expansion in this field as a result.
Several NGOs have been persistently campaigning against exploiting the tar sands, and the news above shows that they may be enjoying some success, as the institutional investors have certainly been the target of the campaigners. Furthermore, Whole Foods Market and Bed Bath & Beyond, two large US retail chains, are taking steps to avoid suppliers that source fuel from the sands. This has occurred following the NGO ForestEthics drawing attention to a large number of companies it believes could help tackle climate change, through choosing less carbon intensive sources of energy.
We have found that many companies find it hard to relate to, or understand at all, the challenges, criticisms, or suggestions that come from NGOs and similar organisations. It is not that a company needs to take its cues from the NGO world, rather that better, more constructive engagement could lead to positive results for both the corporate world and the NGOs. Effective campaigning can have a very tangible effect on the investor audience, and as such, it is an area that is certainly worth paying attention to.
