The Triple Bottom Line Blog

Perhaps you saw this week's story in The Wall Street Journal about how protesters are gearing up for the Olympic Games and what sponsoring companies are doing about it. Short version: Most companies are focusing on "going green":

Coke is playing up its water-conservation efforts on the Yangtze River and putting natural-refrigerant coolers and vending machines at all Olympic sites. Since March, Volkswagen has been planting thousands of trees in Inner Mongolia. GE is touting its role selling ecofriendly products such as solar-power and water-filtration systems for the Olympic venues.

By concentrating on the environment, companies can show they are acting responsibly and score points with the Chinese government while avoiding politically charged issues such as Taiwan or Darfur, PR executives say. Mr. [Richard] Edelman [of Edleman Public Relations] calls it a "win-win" situation.

A close reading of the article indicates that the most vehement and well-organized protests may actually be focused on human rights and other non-environmental issues. Which does mean that companies need to have that part of the sustainability agenda under control in terms of having appropriate policies, procedures, and programs in place.

But companies are right to focus on the environment for several reasons.

1. Dirty air will have an impact on the games themselves and on the athletes, whereas hman rights and other issues will be at one step removed. The human rights activists will be trying to draw connections to the games, but the athletes and spectators are most likely to be talking about the environment and will have every good reason to do so. They will not seem like agitators serving some other, unrelated interest.

2. The media will thus be talking about the environmental problems as part of the daily coverage of the overall "Olympic Story." Bad air is likely to affect the performances (think marathon), and it will be easy for the media to follow that angle and go deeper. Unlike human rights and even contaminated toys (the regime will make certain that there are no child laborers or contaminated toys within 1,000 miles of the Games!) there are easy, accessible visuals--smog, belching factories, traffic congestion--that will tell the story. It's the easiest story by far with no investigation and little explanation required. Also, bad air and possibly water (the foreign athletes may not be drinking from the taps) may well make this Olympics different from any other, and the media loves that.

3. Of course, all of this plays into the two biggest stories of the decade: China and climate change.
4. Then there is the political side of the environmental issue. Never having been to China, I have no real idea how big, strong and deep the environmental movement is there. (Elizabeth Economy's book on the subject, which my writing partner Karl Weber happened to work on, is probably a good place to start in learning about that topic.) But my guess is that the Olympics, and the presence of the international media, will give that movement plenty of cover, not to mention the international environmental activists who will be at the head of the parade. It will be hard for the government to arrest them all, if they do join hands. They would look really bad if they just arrested the locals, and even worse if they put the foreigners in the clink.

And if there are protests and arrests that just gives the media an even bigger story to cover.

5. Finally, I think the human rights activists may understand all of this, and may rally behind the environment as a wedge issue. That's what happened in Hungary--the democracy movement rallied and prevailed around environmental concerns related to the planned construction of a large hydroelectric dam. In so doing, they served their broader political goals--undermining the power and authority of an autocratic central government, and demonstrating to the public that they could affect change if they chose to do so.

For all these reasons, a green focus is a very reasonable strategy for sponsoring companies to use in dealing with the challenges of China 08.

Labels: Air, China, Communications and Marketing, Human Rights and Child Labor, Olympics, Water

I asked Andy about what topics we ought to be writing about more on this blog, and in response he sent me this email:

I always get questions on the lecture circuit about how companies in this country [i.e. the United States] can afford to be more sustainable or more responsible when they have to compete with low-cost goods and services provided by China and the rest of the developing world.

The first point I make is to refer to one of your initial posts about how globalization means that China and the others can't get away with bad practices for long if they are planning to export to us.

The second point I make is that the chickens are coming home to roost, even faster than I would have expected. Last week, for example, there was an article in The Times about how American toy manufactures are having a resurgence because of the China toy recalls. You might want to link to the piece . . . just don't quote the whole bloody thing.

(Andy thinks I have a habit of quoting too much from the stories I link to. In deference to him I'll link to the Times story, but I won't quote a single word. Read the whole thing if you like. Seems as if retailers and consumers are happy enough to pay higher prices for toys when the cheaper alternative products are coated in poisonous paint . . .)

But speaking of chickens coming home to roost, it seems as if an entire blog about sustainability could be written using nothing but stories from China. Almost two months ago, Andy himself wrote this post about the risks of being a corporate sponsor of next year's Beijing Olympics. Between Darfur, child labor, censorship, and capital punishment--not to mention rampant pollution, product piracy, and, now, shoddy manufacturing practices--it seems as if being linked with China is an increasingly dangerous corporate strategy.

At the same time, there's no doubt that China is a rising world power than no global corporation can afford to ignore. What to do?

Today I encountered this good column about the issue from consultant David Wolf. I'll quote him--sparingly enough for Andy's taste, I hope:

Several things set the Olympics apart. The Olympics is global. It covers a wide range of sports. It is a pinnacle event, meaning that in most of the sports involved you can reach no higher than Olympic champion. It occurs every four years.

But there is one more thing that, in the mind of sponsors, sets the Olympics on a higher plane than even the Superbowl, The World Series, or the World Cup. It is the unspoken conviction that the Olympics is somehow the last form of pure athletic endeavour, and that supporting the Olympics is somehow a good thing, in and of itself.

But any company (and I guarantee you, there will be a few in the coming months) that attempts to frame their support of the Olympics as some form of corporate social responsibility should be publicly ridiculed. Olympic sponsorship is a marketing exercise, pure and simple, and should be universally acknowledged as such.

It's an excellent point. Wolf goes on to stress that any company associated with the 2008 games needs to make sure it has in place a robust sustainability program focused specifically on its China practices. The best possible response to protestors who want to attack your corporation for its sponsorship of the Beijing games is to be able to point to your policies that are bringing concrete assistance to Chinese workers, children, human rights activists, and other worthy beneficiaries. Without such a response, protestations about your good intentions as a partner of China and a supporter of the Games will ring hollow.

One last point: Although many of us assume that the "commercialization" and "politicization" of the Olympic Games--along with the attendant controversies--are recent phenomena, that's simply not true. Corporate sponsorship has been a feature of the modern Olympics since their founding in 1896. And as for controversy--well, one of the sponsors of the infamous 1936 Berlin Olympics was none other than Coca-Cola.

How's that for a corporate affiliation--to be linked forever in history with the likes of Hitler, Goebbels, and Leni Riefenstahl? It might take a brand as powerful as Coke's to shrug off that kind of publicity.

So if you're a corporate manager trying to figure out how to position your company in today's interconnected, globalized world, don't feel too sorry for yourself. The problems you're wrestling with may be thornier than ever, but they're scarcely brand new . . . if that's any comfort.

Labels: China, Coca-Cola, Communications and Marketing, David Wolf, Olympics

Browse the web for any Fortune 500 company followed by the word "watch," and you will find websites devoted to overseeing the company's activities. Use an expletive following the name and sites appear detailing grievances that run from reasonable to far-fetched to demented. (If you haven't already scanned the web for hostile sites aimed at your company, you should try it soon--just be sure to have the antacids within reach before you start.)

Olympic Watch is a recent addition to the watch sites. Dubbed the "Genocide Olympics" by human rights activists who have their eyes on China--for its role in Darfur, not to mention child and slave labor, capital punishment, forced evictions, political repression, and denial of free speech--the site aims to put pressure on Olympic sponsors to speak out against the host country's human rights abuses.

Putting pressure on the authorities directly may be hopeless, but associating big corporate brands with China's denial of basic human rights, might just work. Pressure on business to leave South Africa eventually worked to end apartheid, so why not oppressive practices in China?

The time is right: People in the United States are very upset with China right now, not primarily for human rights violations, but for lead paint on toy trains, poisonous toothpaste, contaminated food and a general concern that China might just grow bigger and faster than us.

So it's a good time to turn up the heat on human rights.

Sponsoring companies will maintain they can't be held responsible for the actions of the Chinese government. But that's like saying that you can’t be held responsible for poisonous toothpaste or child labor simply because you outsourced the manufacture to a third party. If your logo is on the product, it doesn't matter that the culpable party is a separate legal entity, or even a sovereign government. Just ask Nike. Or any of the companies that are under pressure on Darfur.

Corporate managers should be aware that:

1. Your company can be held responsible, and your brand held hostage, for the egregious actions or policies of the government in any country where you do business. This is why, for example, the pressure on Google to fight for free speech in China will continue.

2. You must consider that risk when making any investment in a country with suspect environmental or social policies, or one that is engaged in bad acts, even when your activities in the country have no direct connection to the activities in question.

3. You can't expect a free pass just because the specific operation you're involved in is politically blameless or even has positive connotations like those generally associated with the Olympic movement. Controversy can become attached to any activity under the right (or wrong) circumstances. Fair? Maybe not. But that's reality.

This doesn't mean you shouldn't do business abroad or attach your name to any widely-publicized event. But when you do, do your homework. Research likely areas of controversy; track the vagaries of public opinion constantly; and be prepared to respond honestly and pro-actively to attacks.

Above all, be clear in your own mind why you are choosing to associate yourself with a particular regime and how you intend to have a positive impact on the people whose lives you will be touching. Having a clear, coherent, and believable story to tell can go a long way toward defusing the hostility you may encounter.

Labels: China, Communications and Marketing, Human Rights and Child Labor, Nike, Olympics