From Future 500
Each year, Future 500 releases a report of what we predict will be the most critical social and environmental issues driving corporate-stakeholder engagement in the coming year. This year, we anticipate that corporations will be challenged to go even further than last year, using their economic influence on policy and politicians while being asked to take a bigger stand on global issues. This dynamic will be showcased at COP21 in Paris, where stakeholder expectations of companies’ commitments to mitigate climate change will culminate.
In 2016, we predict that stakeholders will continue to organize around issues like chemicals, water scarcity and local control of resources, challenging the private sector to drive change in their supply chains, make more time bound commitments and be more transparent. We anticipate increased focus on women impacting the global economy and concern around global ocean health, an issue moving to the forefront of our list.
As presented in the following analysis, 2016 promises to be another exciting year to break through conflict and drive workable solutions through proactive stakeholder engagement opportunities. We hope that our annual report continues to help companies and their stakeholders see beyond conflict to find ways to collaboratively forge common ground solutions to our most pressing global problems.
[2016 Issues #1 – #5 are available in Part 1 of this article]
6 – TOXINS: My Body, My Temple
By Marvin Smith, Sr. Manager of Stakeholder Engagement
Concerns around the toxicity of chemicals used in consumer products will remain a key focus for a diverse set of stakeholders worldwide in 2016, especially as brands jockey to be viewed as chemically conscious industry leaders. From “Mommy bloggers,” to mainstream NGOs and foundations, advocacy groups are calling for the decrease to outright omission of chemical hazards that can negatively impact human health as well as ecosystems. Many groups continue to push for stricter laws (e.g. Toxic Substances Control Act – TSCA), while others are pressuring brands to minimize particular chemicals of concern in their products.
In the past two years, several retailers have responded to growing NGO and consumer pressure to adopt green chemistry purchasing policies. This has fostered innovation as producers developed and refined alternatives to phthalates, heavy metals, fluorinated chemicals, antimicrobials, flame-retardants, and others. With 2016 being the 25th anniversary of the term “Green Chemistry,” we expect stakeholders will step up their effort to mobilize consumer pressure on companies to both adopt sustainable alternatives to chemicals of concern and be more transparent about chemicals in their products and the potential dangers they pose.
Relatedly, we expect brands and NGOs to continue battling over marketing terms like “natural” or “preferred chemical.” Without a strong governmental or widely accepted self-regulating body to rank the safety of particular chemical classes, activists and brands will bludgeon the public on the merits (or dangers) of particular chemicals, with a potential risk of either side resorting to legal attack if they see cause to mislead consumers through green-wash marketing.
Despite this potential rancor, we are seeing efforts to produce chemically safer consumer products led by coalitions of major brands monitored by watchdog NGO groups. In 2016 and beyond, we see these coalitions increasing their requests of brands to employ their influence to encourage legislative action leading to the stricter regulation of chemicals (see Issue 1).
7 – WOMEN’S PURCHASING AND C-SUITE POWER
By Tara Holmes, Sr. Manager of Marketing & Communications & Shilpi Chhotray, Sr. Manager of Stakeholder Engagement
Conscious-minded consumerism based on brand trust will grow in 2016. One factor leading this trend is how women continue to drive a majority of household purchasing decisions and the main factor influencing women’s trust is their perception of how well a brand incorporates environmental and social standards into their supply chain and product line (look out VW!). And as women enter more executive and board level positions within companies and organizations, environmental, social and governance – or ESG – factors will more likely be elevated, enhancing both internal and external corporate behavior.
The 30 Percent Coalition, a group comprised of over 70 members, including women’s organizations, institutional investors and corporate governance experts, is committed to placing women in 30 percent of board seats across public companies by 2016. Already, efforts by the 30 Percent Coalition have resulted in 20 major companies, including big names with big dollars like Walmart and Avon, adding more women to their boardrooms.
The efforts of the 30 Percent Coalition and others are reinforced by growing consumer support for companies committed to gender diversity and equality. The Buy Up Index, for example, is mobilizing consumer awareness through an innovative app that rates brands and the companies behind them based on gender diversity in the boardroom, C-Suite, workforce, philanthropy, and how they market to women. The Buy Up Index highlights companies making stereotype-busting ads and disclosing information about companies, such as paid maternity leave.
In addition to gender diversity, stakeholder focus on gender equality in corporations will also grow in 2016. 2015 was an exemplary year for LGBTQ rights with 366 major businesses earning a score of 100% according to Human Rights Campaign’s Corporate Equality Index, the national LGBTQ benchmarking tool related to corporate policies and practices. Encompassing equal pay, paid maternity leave, diversification in the boardroom, LGBTQ rights are increasingly garnering the spotlight, forcing brands to take note.
With the recent release and rapid growth of the Buy Up Index and that of groups like the 30 Percent Coalition, in 2016, we predict that companies will continue to feel pressure to incorporate gender equality and diversity throughout their internal operations as well as their product lines.
8 – POST-CONSUMER WASTE
By Danna Pfahl, VP of Stakeholder Engagement
For decades, recycling and packaging regulations have come in a recurring cycle of waves. Each wave of legislation, typically proposed by NGOs and government stakeholders, generates a counter-wave of voluntary initiatives led by industry. We see this approach shifting in 2016.
Industry’s current approach is to discuss packaging waste under the umbrella of the circular economy, promoting voluntary initiatives like the Closed Loop Fund and the Recycling Partnership. NGOs current approach from groups like UPSTREAM is to advocate for producer responsibility for all their products rather than pressuring government to advance product-by-product mandates and bans (e.g. Plastic Bag ban) at the state and local level. Lack of agreement on how to solve the core problem of waste minimization, further exacerbated with stagnant recycling rates, have created a chasm between the public and private sector, creating a need for corporate campaigners to activate to motivate progress. Groups like Make It, Take It have targeted Kraft Foods over flexible pouches while SRIs like As You Sow continue to rank companies on their positions around certain recycling policies.
As noted in Issue 2, ocean campaigners are intensifying their focus on the impacts of plastic pollution. These groups have found a natural alliance with recycling campaigners working to stop post-consumer waste on land. Given plastic packaging is identified as among the top five types of marine debris, and with a forecast for large global increase in demand for plastic packaging, it is not surprising that responsible use of plastic will continue to be a target for activist campaigns in 2016.
Looking ahead, we expect environmental NGOs to focus globally on efforts to stop trash in the developing world from entering oceans, while recycling advocates focus locally in the developed world for increased materials recovery and reuse, particularly in the U.S., a nation lagging far behind other developed nations. While the local and global nature of these campaigns may appear separate, the overlap in problem and potential solutions are closer than they may appear and we look forward to tracking this progress in the coming year and beyond.
9 – BEYOND COAL: What’s Next for Electric Utilities
By Brent Tarnow, Sr. Manager of Stakeholder Engagement
2015 was a dramatic year for climate change awareness building through multiple stakeholder and activist campaigns, including the momentum built off of the People’s Climate March in New York City.
We see this trend amplifying in 2016 as the push for clean energy intensifies. For example, the world’s biggest carbon emitters – the U.S. and China – began setting the tone for the run-up to COP21 with joint commitments that are intended to drive down carbon intensity of their respective economies, with significant long-term implications for coal powered electricity – still one of the most prevalent forms of electric energy production.
In the U.S., the EPA enacted transformative climate regulations limiting carbon pollution from power plants, the largest source of carbon emissions in the country. The passage of the Clean Power Plan has some advocates declaring victory in the “War on Coal,” yet we continue to see coal plants unfolding in the developing world. Though the Clean Power Plan has been robustly challenged by industry, it has withstood and maintained the rigor its proponents intended. Regardless, utilities will continue to face stakeholder pressure and a changing regulatory landscape that requires decreasing fossil fuel use and increasing more efficient and renewable energy sources.
After years of vitriol between climate activists and electric utilities, we are beginning to see positive, collaborative paths forward. Electricity providers should continue to expect activist opposition over issues like coal ash storage, water use, insufficient energy efficiency programs, social justice issues, and transparency in political spending, but what’s increasingly important is the noticeable shift away from debating the “War On Coal.” Instead, stakeholders and companies are exploring net metering in utilities’ growing solar programs, greater incentives for rooftop solar, more involvement and transparency in a utilities PUC hearing, and enhanced energy efficiency programs. We see this marked shift in approach and open dialogue accelerating in 2016 and beyond.
10 – LOCAL CONTROL: It’s Not Just About Climate Change
By Kellen Klein, Sr. Manager of Stakeholder Engagement
Over the past few years, we have repeatedly identified the energy sector and its infrastructure as hotspots for stakeholder activism (see Issue 9). We see this approach continuing into 2016 with a lens on battles to protect local water resources. We also predict that stakeholder focus will shift from a focus on the fossil fuel industry to more tangible, on-the-ground impacts to local land and water ecosystems, private lands, and social justice that can arise from energy production and transport.
Several key trends are fueling ongoing stakeholder concern about energy production across the globe, particularly as lessons are learned from challenges associated with North America’s dramatic fossil fuel energy growth. Most obvious is the mainstream media’s growing interest in covering the recent slew of spills, explosions and “bomb train” accidents. Such coverage elevates community concerns, particularly within areas abutting energy development and transport infrastructure. Community safety and rights are of the utmost concern in this case, and issues surrounding risks and exposure transparency only fuels mistrust.
The second, correlated trend is the advancement of a growing body of research assessing the health impacts of fossil fuel extraction. Recent reports by watchdog NGOs and universities are fueling debate about the extent to which oil and gas development threatens local residents and natural resources. Air pollution, exposure to toxic chemicals, water contamination, and land integrity (contamination, earthquakes) are of greatest concern to stakeholders, and have led to staunch opposition from California to Poland.
Stakeholders have historically focused on fighting energy sector expansion efforts in municipalities, but are now shifting to challenge the fossil fuel industry’s use of, and impact on, public lands. Emerging organizations are challenging the legal frameworks that allow energy companies to explore and transect these parcels at marginal rates, while local grassroots groups are battling to halt what they see as corporate land grabs of cherished wild places. From the national parks of the UK to the scenic rivers of the Pacific Northwest, companies should anticipate growing stakeholder opposition whenever they approach undeveloped natural landscapes.
The common theme linking these strands of energy activism is the concept of “local control.” Most frequently heard in academic circles, the concept is rooted in the belief that local residents are most knowledgeable of and invested in their community and are therefore best suited to make decisions about community development. Major funders and NGOs may operate at the national or international level, however, these groups are increasingly opposing energy development locally – fortifying preexisting grassroots efforts and elevating the concerns of local citizens who are aligning forces with national and multi-national organizations and funder networks.
Whether an LNG export terminal, fracking well, oil train, or tar sands pipeline, the energy industry should expect growing opposition at every turn in 2016. Stakeholders have proven the efficacy of the localized community-based approach to energy activism and campaign success to date suggests that this dynamic will persist well into 2016 and beyond.
For more information about the report, please reach out to Mary Ann McDonnell at: mmcdonnell@future500.org
Article Source: Future 500 website at- www.Future500.org
