How to Respond Strategically to CSR-Related Protests: Lessons From 3M, Mattel and PepsiCo

By Nancy Himmelfarb

CSR-related boycotts and protests are intimidating, especially when advocacy groups are aggressive. What should you do if your business is a target?

Let’s look at three heated activist campaigns related to deforestation – three different companies and protestors, all addressing the same issue.

Paper company 3M was under fire by ForestEthics for more than six years, including a heated three-day campaign at the 2014 Sustainable Brands conference with 600-foot banners, pirate radio broadcasts and a marine flotilla. A full year after this public protest, 3M responded in ways that ForestEthics approved, and the conflict ended.

Toy manufacturer Mattel faced Greenpeace on deforestation in a drama that lasted only a few months. Greenpeace activists were very effective in garnering online and offline support with their "breaking up with Barbie" campaign. The protests ended quickly, when Mattel issued a new global sourcing policy that excluded suppliers involved with deforestation.

PepsiCo’s conflict is still ongoing. Rainforest Action Network (“RAN”) slammed PepsiCo last month upon release of its annual Palm Oil Policy Progress Report. RAN's complaint? The food and beverage giant condemned the company for allegedly partnering with irresponsible palm oil suppliers.

Think about what you would do if your company were in the shoes of any of these three companies, publicly (or even privately) criticized for CSR-related policies. You might have developed a roadmap to prepare for potential protests, as I described in an earlier TriplePundit article. But, now your company is faced with an actual challenge. To determine the appropriate response, be strategic and consider these factors:

1. Relative importance of the protester

Expect that your stakeholders: employees, investors, consumer advocacy groups, regulators, and NGOs will disagree with one another. Some will support specific policies and business decisions made by your company, and others will not. You cannot please all of them, and you don’t need to. Listen and acknowledge all of the viewpoints, but know that not all stakeholders are created equal. How important is the protesting stakeholder (and the stakeholder’s viewpoint) to your business?

Consider the examples above. Many NGOs and consumer advocacy groups care about the environmental and social impacts of corporate forestry policies. ForestEthics, Greenpeace, and RAN are three. Others include World Wildlife Fund (WWF), the Roundtable on Sustainable Palm Oil (RSPO) and SumOfUs (the 2015 catalyzing campaign against Doritos). With 3M and Mattel, the protesters were very vocal, and no other group came out in defense of the companies’ forestry policies. PepsiCo’s case is different. RAN’s opinion of PepsiCo seems to be an outlier. WWF gave PepsiCo the highest possible score among CPG companies in 2016 for leading the way on progress towards sustainable palm oil, and RSPO praised PepsiCo for its progress and transparent reporting.

In your case, determine whether the complaining stakeholder is a priority voice for your business. Pleasing key retail customers or investors obviously takes precedence over pleasing a small consumer segment or a non-influential blogger or NGO. Though you should identify and understand the viewpoints of all of your stakeholders, prioritize them in advance to help you respond to their demands appropriately.

2. Importance of the issue raised

Just as some stakeholders are more important to your business than others, some of their needs and interests are more important than others. Regardless of whether you have conducted a detailed materiality assessment, you should know which CSR issues are “hot button” issues, or risks, for your business. As an example, you know that deforestation is important, if you work for a paper company like 3M, or you are a big palm oil buyer like PepsiCo. Pay close attention to the important, priority CSR issues, so that you are not caught off-guard by a protest.

3. Relationships with supportive stakeholders

You will be in the best position to respond to objections if you have cultivated relationships with influential and well-respected stakeholders that support what your business is doing. You can leverage these positive relationships when faced with protests from others. Think of PepsiCo. The company would be in a very different position, if RAN were the only third party speaking out on the company’s palm oil policies and efforts, or if WWF and RSPO also objected to the supply chain efforts described in PepsiCo’s progress report. PepsiCo should weigh the opinions and support of WWF and RSPO heavily when deciding how to respond to RAN’s protest in the coming months. Having the support of well-respected and influential stakeholders should make a difference here.

Start early. Even if your business has never been the target of a protest or you think your business is too small to be targeted (wrong!), you should seek to cultivate positive relationships with NGOs, investor groups, and other public influencers. The positive relationships could be effective in reducing the reputational damage associated with a protest, or even avoiding a protest altogether.

4. Implications of accommodating stakeholder viewpoint

Assuming that a protest comes from a key stakeholder and relates to an important issue, you still need to determine whether it makes business sense to accommodate the demands. Ask yourself whether the stakeholder’s demands fit with with your company’s mission and business objectives, and whether it is feasible to change business policies or efforts in the ways asked. Do the benefits of adapting to the stakeholder’s protest outweigh the reputational and other business risks of sticking with your current business strategies and management approach? If the answer is “no,” then do nothing and explain your position to the protesting stakeholder.

Some protests catalyze significant changes by a business and rightfully so. Other protests do not warrant any change in business strategies or operations. If the decision is made strategically, then it is the correct one.

Nancy Himmelfarb is Principal of NJH Sustainability Consulting. Based in Chicago, Himmelfarb helps companies create and leverage sustainable business strategies based on her unique combination of business, legal and sustainability expertise.