The Greek myth of Pandora's Box has been very pervasive within modern western culture. Everyone know...
The Greek myth of Pandora's Box has been very pervasive within modern western culture. Everyone knows that the ironically-named Pandora (whose name means 'all gifts') was sent down from the gods to punish the humans. She brought with her a precious box of gifts which, once opened, poured forth not gifts, but all the evils of the world.
Pretty soon, the trustees of both occupational and local government pension funds are going to be reminded of Pandora's Box. From 3 July, under an amendment to the 1995 Pensions Act, trustees of pensions funds covered by the Act will be obliged to disclose their Socially Responsible Investment (SRI policy), and how this policy is to be put into practice when investments are made.
At the same time, as public awareness of SRI issues gains momentum, those involved in private pensions schemes - not least of which are financial advisers - will also find themselves demanding SRI information from pensions funds managers in the private sector. This will be necessary in order to satisfy their clients' need for an ethical element in their pensions investment portfolio.
Why do I liken this healthy and responsible new momentum in pensions investment to the fateful Pandora's Box? Well, as a seasoned communications advisor in the field of the 'socially responsible' issues, such as health and safety and the protection of the environment, I believe the compulsory reporting of SRI policy for pensions funds will have far wider implications than simply being an issue which remains within the confines of the financial services industry.
Like the demons that leapt out of Pandora's Box to invade the whole earth, the SRI issue is set to pervade all corners of industry.
In fact, SRI is poised to become the latest cause for environmental - and ethical lobby groups to champion - and public affairs directors far and wide need to make ready for the wave of public interest which will undoubtedly gather force once these powerful pressure groups start to put their weight behind it.
Anyone doubting this would have had their eyes opened at a conference on corporate reputations in May, when a speaker from Friends of the Earth named Norwich Union as one of the group's next targets.
Other industries such as agriculture (for example genetically modified (GM) crops); food (veal meat production); highways construction (the Newbury Bypass); waste management; quarrying; power generation and many others, have experience which shows that environmental and ethical considerations are far more powerful than any other (purely monetary) issues in arousing the interest of extremist pressure groups.
These other industry sectors are now far more experienced in SRI issues and are therefore more advanced in terms of how to deal with these issues. Financial services, on the other hand, is lagging behind, with one or two notable exceptions such as NatWest, Woolwich and Royal Bank of Scotland.
The problem for those policymakers who are obliged to make a social, environmental and ethical policy, and then publish it to their stakeholders is that terms like 'ethical' have no absolute value. They simply take their force from the 'gut feeling' of individuals. For example, one person may view the humane testing of new drugs on animals as vital for the future well-being of humankind, whereas another would rule out any use of animals in scientific experiment.
Similarly, those football fans who stopped buying the latest kit from their favourite team because it was being produced cheaply in the third world may not necessarily have been doing those third world communities any favours by causing their income stream to dry up.
This makes it open season on social, environmental and ethical issues for experienced and very skillful campaigning bodies such as Friends of the Earth, animal rights groups, anti GM protesters and the like.
Indeed, Friends of the Earth entered the action on this particular issue quite early in the game, by marketing a pack for occupational pension scheme members showing them how to lobby trustees over ethical investments.
Other pressure groups are expected to follow this lead.
So far, these groups have picked off industry sectors tactically. However, with pensions funds owning around half of the shares of the FTSE 100 companies, the new requirement to disclose SRI policy in the pensions industry has handed these pressure groups a strategic tool to drive environmental and social change across the whole spectrum of industrial sectors.
Environmental and ethical groups are highly effective in rousing a groundswell of public opinion towards their own point of view, and gaining a sympathetic press. This is normally a single-issue, black and white view, which tends to exclude reasonable debate and is designed to appeal to the gut instinct.
In my role as an environmental communications consultant to many blue chip companies which are confronting social, ethical and environmental issues, I have recently seen a fundamental shift in the way that environmental and ethical pressure groups operate.
It seems like only yesterday that pressure groups were confronting big business through stunts such as disruption of AGMs, sit-ins, and demonstrations. The business world has responded by including environmental sections in their annual reports, or even producing stand-alone environmental reports.
Businesses tended to have only a limited amount of dialogue with pressure groups, and this was rare. But things move on fast in the arena of environmental/ethical protest.
Today, pressure groups are dictating the pace of change and are aiming their communications directly at shareholders, confronting them with difficult questions and ultimately getting them to sell their shares.
If you don't believe this, ask some investors in Huntingdon Life Sciences how they feel now that direct action by an
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