Ethical Performance
inside intelligence for responsible business


Capital market campaigning

October 2006

Steve Waygood. Incisive Financial Publishing. 234 pages. Hardback. £85.

When Surfers Against Sewage campaigners brandished a giant inflatable turd at the annual meeting of South West Water in 1990, they barely realized what they were starting. Their campaign against a UK water business marked the first of a series of challenges to listed companies from pressure groups seeking to harness the power of the City to further their campaign ends.

Steve Waygood's book is the first serious study of campaigns run by non-governmental organizations focusing on investors. Most CSR managers know that such campaigns have on occasion led companies to change their policies; but now the mechanics are laid bare.

Waygood, whose book is both authoritative and mercifully jargon-free, has worked on both sides of the fence, for the WWF environment network and latterly as director of investor responsibility for Insight Investment. The turning point for capital market campaigning, he argues, was in the mid-1990s, when NGOs successfully lobbied investors that ABB had lined up for the Bakun dam project in Sarawak and, more controversially, when NGOs in 1997 challenged Shell's planned disposal method for the Brent Spar oil platform.

Three themes stand out. First, NGO capital market campaigns really do work, when those applying the pressure have done their homework. They are also cheap to run: Oxfam's Cut the Cost campaign against GlaxoSmithKline, which focused on access to medicines in developing countries, cost the NGO just £13,000 ($24,200), Waygood estimates. Second, such challenges are becoming more effective, as campaigners hone their tactics. Third, legitimacy. To avoid being targeted, 'companies and investors need to put in place measures to ensure they meet the reasonable expectations of stakeholders.' But what about unreasonable ones, and stakeholders who carry baseball bats? That, he says, is a 'future challenge to policy makers'.

Alistair Townley

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