To keep up with all the latest market insights and company news please follow us on twitter @RiFSocial and connect with us on Linkedin. To sign up to receive our monthly RiF Tracker Report email: email@example.com
Earlier this month, World Tour cycling crew Team Sky became Team Ineos and took its new sponsorship for a spin around Yorkshire. Wheel spokes a blur as the cyclists zipped gracefully through the Dales, cheering crowds at en route towns and cities – the three-day Tour de Yorkshire appeared to many spectators a jubilant affair and successful launch event for the rebranded team.
And yet the unveiling of Team Ineos has been mired in controversy. Ineos is a petrochemicals giant, one of the world’s biggest plastic producers and a vocal supporter of hydraulic fracturing (a.k.a. fracking) for shale gas exploration. The on-the-surface incongruousness of the company supporting a cycling team has not been lost on the likes of Greenpeace and Friends of the Earth, who feel sportsmen traversing beautiful landscapes should not bear the logo of a company threatening their very existence. These organisations and others have accused Ineos of ‘greenwashing’, using PR spend to evoke a friendlier brand face while avoiding making real changes to address its environmental impact.
Those who defend the Ineos sponsorship argue that it is the big plastic producers that are best placed to tackle the problem of plastic pollution – they have the power to innovate and drive significant change – and that Ineos is committed to this issue. The company’s sustainability reporting promises emission reductions and greater emphasis on recycled materials, and talks about R&D successes in the field of sustainable materials.
But how does one square this with the fact that the company’s founder and chairman, Jim Ratcliffe, only recently threatened to close its Middlesborough plant unless it could be granted leniency on meeting EU clean air and water regulations? Or the fact that the plant has amassed scores of violations related to emissions and health and safety over the last few years? Not to mention the myriad scuffles with anti-fracking campaigners, organisations and even governments. The Department for Business, Energy and Industrial Strategy’s Public Attitudes Tracker has consistently shown low public support for fracking (12%, compared to 40% opposing in its most recent wave).
It’s not surprising that as the tide of public opinion turns against Ineos, it’s looking at ways to bolster positive brand associations. The company also supports the Daily Mile, a commendable initiative to improve children’s physical and mental wellbeing through regular exercise.
And this strategy is nothing new. For decades, companies promoting unhealthy lifestyles have aligned themselves with sports teams or sporting events. Coca-Cola has supported the Olympics since 1928; McDonald’s only recently ended its four-decades-long sponsorship of the Games. Encouragingly, it seems that these food and beverage behemoths have clocked that affiliations with athleticism no longer suffice in whitewashing the darker side of their societal impact. Coca-Cola bought a majority stake in Innocent Drinks in 2010 and completed a buyout a few years later, adding a healthier, more sustainable brand to its stable. McDonald’s, meanwhile, has spent years working to convince a more discerning consumer base that it has improved the sourcing and quality of its produce, and that it is committed to offering healthy options alongside the usual American fast food staples.
In light of the fast food industry example (see also: the London Mayor’s ban on junk food advertising across the TfL network), should irked cycling fans accept the Ineos sponsorship and treat it is an early, shallow step on an uphill journey towards more profound positive change? Will the company’s greater visibility to the British public actually result in mounting pressure on the brand to take its environmental impact more seriously? Or should big companies with poor environmental records be well and truly publicly chastised, with their financial beneficiaries deserving of difficult questions and criticism too? Should Froome and co. be taking the high road? Whatever your view, no party involved should ignore the fact that the race to curb climate change is on.
Research in Finance’s Responsible Investment Review is out now! While lacking debate on the responsibilities of sporting heroes, it does contain important findings based on 1,500 survey responses, 64 in-depth interviews, fund data analysis and stacks of desk research. The report outlines how investors across the spectrum feel about responsible investment, how governments are pushing the ESG and wider sustainability agenda, and what asset managers should be doing to stay on top of evolving investment preferences and imperatives.
For more information on the Responsible Investment Review or to subscribe, please get in touch.