Environmental Sensitivity

[00:00:14] Hello everyone and welcome to Reputation Matters, the show about how companies survive crisis

[00:00:18] goes through them and the learnings that are there for all of us.

[00:00:21] My guest Mitu Samar, founder and CEO of Eminence Consulting, Mitu, welcome to the show.

[00:00:26] Thank you Anupam.

[00:00:27] Today we've got something very interesting.

[00:00:29] This is both our case studies go back almost 10 to 20 years.

[00:00:33] We're talking about environment and some fairly large Indian brands.

[00:00:38] One is an Indian company, one is a multinational.

[00:00:42] Both of them have been through their own trials and tribulations when it comes to dealing with

[00:00:46] sensitive on the ground environment matters.

[00:00:50] Mitu, let's start with the very first case study today which is of SR.

[00:00:54] A lot of us remember in the early 2010s, I think it was 2013 or 2014 where this massive

[00:01:00] banner had unfurled on their office in Malakshmi.

[00:01:04] Let's talk about what is the background to that because this was also the era of the

[00:01:08] infamous Colgate scandal and all of this has a chronology that led up to that incident

[00:01:14] that is still fresh for a lot of us.

[00:01:17] Absolutely.

[00:01:18] In fact, like you mentioned it was an outcome or rather extension of the whole

[00:01:23] Colgate crisis as they spoke about and the whole 2013, 14 where our country itself was

[00:01:31] also undergoing a lot of change.

[00:01:34] So during that time what happened is Col block allocations were done to a variety of organizations

[00:01:41] and Hindalco and SR had come together and they had formed a company joint venture

[00:01:47] called Mahan Col Limited.

[00:01:49] And they were allotted this Col block in a place called Mahan in Madhya Pradesh, India.

[00:01:56] And of course there were a lot of protests around this because there was this body called

[00:02:03] Mahan Sankhash Samiti which was saying that because of these coal mining and all of that

[00:02:11] it will impact the lives of about 50,000 villagers across some 54 villages.

[00:02:17] So they were of course questioning these allocations and making protests around the fact that these

[00:02:25] should not be permitted.

[00:02:28] Of course SR did not agree to the same and it made its own statements that they had all

[00:02:34] the relevant permissions around it and whatever they have done is absolutely in line with

[00:02:41] the guidelines that are given out by the government.

[00:02:46] The protest actually took such a scale Anupam that eventually even Greenpeace joined it and

[00:02:53] it kind of continued becoming bigger and bigger.

[00:03:00] At local level SR tried to even put out its viewpoints through local media, it even issued

[00:03:08] pamphlets to put out its own side of the story as well.

[00:03:14] And it could have remained a very localized crisis because that is what happens in a lot

[00:03:20] of cases but unfortunately it took a national scale.

[00:03:25] That's when and it took national scale when the Greenpeace team actually they kind of

[00:03:33] dressed up as in their overhauls as facility cleaners and they went out to the head

[00:03:42] office of SR and claimed to be facility cleaners and they wanted to clean the facade of the

[00:03:49] company.

[00:03:50] I honestly don't understand how did they get the permission to do something like this

[00:03:54] but they did get the permission and they unfurled huge banners saying we kill forests

[00:04:02] SR.

[00:04:03] And so it had a lot of media attention, of course immediately a lot of media vans

[00:04:12] moved to the SR headquarters, they were showing it live what's happening and a lot of arrests

[00:04:18] of course immediately happened and so on.

[00:04:22] So it was just simply something which was a very localized crisis or localized development

[00:04:28] I would say turned into a national scale crisis for SR.

[00:04:32] I just want to emphasize to our viewers that SR's building in Malakshmi at that

[00:04:36] point of time was one of the most visible office structures at that point of time.

[00:04:40] Of course, Mumbai today has many more such office buildings that people know and

[00:04:45] recognize but at that point of time SR's towers in Malakshmi was very visible.

[00:04:50] It's all glass and like Meethu said you have a bunch of people who somehow infiltrated

[00:04:56] that building became dressed up as facility cleaners unfold an entire banner which was

[00:05:01] actually a very clever take on SR's advertising campaign at that point of time

[00:05:06] when you say we kill forests.

[00:05:08] That was a very visible and high decibel way of putting a message across and the

[00:05:13] message was very loud.

[00:05:15] It was sent and even though whoever was arrested for doing that without

[00:05:19] permissions or committing a crime that is a separate story.

[00:05:23] You know, what was the company's response?

[00:05:25] What happened after this?

[00:05:26] So of course they denied all the claim.

[00:05:29] They put a criminal case against Greenpeace also.

[00:05:32] Like I said, they leveraged media extensively to put out their side of

[00:05:36] the story. They issued a very long media statement around this.

[00:05:41] In fact, they also came about explaining that how there is no displacement at

[00:05:46] Mahan of villagers, but yet we are willing to give compensation to

[00:05:52] villagers. So came across as a very empathetic organization.

[00:05:56] They tried doing all of that as well.

[00:05:59] But broadly because one very important context we need to keep in mind here.

[00:06:05] This whole episode was a part of a larger crisis that the country was

[00:06:12] going through, which was the Colgate crisis.

[00:06:14] So it just became even more pronounced because of that.

[00:06:18] And that's one big message organizations need to remember that by

[00:06:22] any chance they get entangled into a crisis, which is a part of an

[00:06:27] industry level crisis.

[00:06:29] They need to be very watchful of their own conduct and how are they

[00:06:33] going to address this crisis?

[00:06:35] Because it acts like a fuel to the fire at that time.

[00:06:39] And then another aspect that our viewers should keep track that the

[00:06:45] battle between companies with very large projects and villagers on the

[00:06:49] ground, especially when it has to do with resources, has a long history in

[00:06:53] India. I can think of Tata Motors and Singur.

[00:06:55] That was even more high decibel because these become political.

[00:07:00] Right.

[00:07:00] And in this case, also the same thing happened that even though the joint

[00:07:04] venture had all the regulatory permissions licenses or whatever was

[00:07:08] required at that point of time, they acquired permissions and they

[00:07:12] execute the project.

[00:07:13] But it was still fought back by the villagers and the crisis became so big

[00:07:19] that it ended in a very high decibel campaign that was, you know,

[00:07:24] that probably shook corporate India for a few days that they had never

[00:07:27] seen something like this at that point of time.

[00:07:29] In Bombay, at least I can't think of any major protest that takes on a scale

[00:07:34] like this.

[00:07:35] So me too.

[00:07:35] Totally.

[00:07:36] What next after that?

[00:07:37] Then I mean what happened after that?

[00:07:39] How did this crisis then eventually settle down?

[00:07:41] So this crisis, like I said, was a part of a bigger industry crisis.

[00:07:46] So that kept blowing up.

[00:07:48] The bigger industry crisis kept blowing up and eventually the entire

[00:07:52] matter was, you know, moved to Supreme Court.

[00:07:56] So actually even SR tried fighting it at all the levels and eventually

[00:08:01] the whole episode itself was referred to Supreme Court.

[00:08:05] And the decision was made that all coal block allocations were

[00:08:11] bugged aside and all that.

[00:08:13] So eventually it died its own death, right?

[00:08:15] But that point in time, this episode, it just positioned SR as a company

[00:08:23] which is not caring for planet and people and which is damaging.

[00:08:29] So what I want to ask you here, Meethu, is that for a company that

[00:08:32] spends so much money on advertising, remember that resource based companies

[00:08:36] whether it is a Tata Steel, whether it is an SR, they spend a lot of money

[00:08:40] in getting their advertising messaging and image to the public right.

[00:08:45] And still they could not anticipate that such an event could happen.

[00:08:49] So what happens to the company after that?

[00:08:54] Do they sit down and work out a strategy all over again?

[00:08:58] Or what goes wrong and what are the learnings from that for them?

[00:09:01] So two things happen typically.

[00:09:04] Some people just, they just look away and forget.

[00:09:08] They assume that people's memory is short.

[00:09:12] They will forget it.

[00:09:13] Why people's memory actually it is short.

[00:09:16] But Anupam internet never forgets.

[00:09:19] So that's a big dilemma.

[00:09:22] So if you recall the famous Nottingham scene where Julia Roberts mentions.

[00:09:29] Yeah, so she tells you, Grant, that newspapers never die.

[00:09:35] And anytime anybody will talk about me, they will dig out this episode

[00:09:39] and they will talk about me.

[00:09:40] So similarly, internet never dies or messages on internet never die.

[00:09:44] So organizations assume that people's memory is short and they will forget.

[00:09:50] But like I said, the digital world or the news world doesn't let them forget.

[00:09:56] So a lot of times organizations make this mistake and they should not.

[00:10:00] Ideally, they should sit back, think about it, learn from it

[00:10:04] and think of coming back.

[00:10:06] But unfortunately, very, very few of them follow this.

[00:10:10] Meethu, our second case study in today's episode has to do

[00:10:13] with a consumer facing brand.

[00:10:14] This time one of the most popular products in India, Coca Cola.

[00:10:18] And this happened in 2000, almost 24 years ago.

[00:10:23] This also involves a very large brand going head on with villagers

[00:10:28] with their resources with a very high profile case at that point of time.

[00:10:33] So it's similar to what we discussed with SR, but yet it's different.

[00:10:36] It was 2004, 2000 actually.

[00:10:40] So almost 13 years before the SR crisis happened 24 years ago from today.

[00:10:45] Tell us how everything unfolded.

[00:10:47] So there are two aspects around it.

[00:10:50] What with respect to Coca Cola, we need to pay attention to

[00:10:53] this particular crisis that we will discuss that happened in

[00:10:58] Plachimera village in Palakar district of Kerala

[00:11:03] and a couple of other similar episodes that unfolded subsequently also.

[00:11:09] So the point again here is that how organizations need to realize

[00:11:15] that they need to be slightly more conscious towards planet and people

[00:11:20] and their action, their messages, their conduct, everything has to align to it.

[00:11:28] So again, I think way back in 2000, they started a factory about in 35 acres of land

[00:11:35] where they were producing a thumbs up, limca, Fanta, these kind of products,

[00:11:41] Hindustan Coca Cola beverages.

[00:11:43] And what happened is within two years of this factory starting its operations,

[00:11:51] the water level at the ground, they started seeing a depletion in the water levels.

[00:11:57] Second important problem that happened is the drinking water also was getting

[00:12:02] contaminated and the people around the area were falling sick.

[00:12:06] They were getting health issues.

[00:12:09] Finally, the sludge that was coming out of the factory, even that was making

[00:12:15] the land barren it seems it was being said.

[00:12:18] So problems happening at variety of level like I said, both at the planet

[00:12:23] as well as people level.

[00:12:25] And of course, protests started happening.

[00:12:30] Important to note, Anupam, that factory was employing around 400 villagers.

[00:12:36] Right? So it was definitely doing something for the community.

[00:12:41] It was giving them employment and I'm talking about again 2000s.

[00:12:44] Right? It was very important in those days.

[00:12:47] Of course, it continues to be important today too.

[00:12:51] So while it was giving employment, yet the villagers, you know, revolted against it

[00:12:57] because the overall flora fauna and the land condition was getting corrupted.

[00:13:04] So eventually, in fact, Coca-Cola also agreed to provide drinking water to the villagers.

[00:13:11] So the company responded.

[00:13:13] Right? But then the impact of its operation was at such a deep level

[00:13:20] that protests continued.

[00:13:22] And by 2004 they had to shut down the operations.

[00:13:26] Now, while the operations were shut, cases were on and they tried their level best to come back.

[00:13:35] But I think by if I'm not wrong, somewhere around 2017 or so,

[00:13:39] they agreed to give back the land also because they were not able to operate it.

[00:13:44] And in fact, in 2021, it was used as a COVID facility.

[00:13:49] So things happened.

[00:13:51] But kind of label got associated that again, the company is not acting responsibly.

[00:14:00] Important aspect again here is this issue continued to remain local for a very long time

[00:14:07] because it was way back in 2004 when social media and information flow was not all that active.

[00:14:15] However, things are slightly different now.

[00:14:18] I'm just very fascinated by the fact that this is a company that had such unforgettable ad campaigns in the 90s

[00:14:25] when they came back.

[00:14:26] They first had to exit India in the 70s when you had the Fera related issues and they came back.

[00:14:32] Tanda means Coca-Cola and they hired like the best of Polyvote actors, did everything,

[00:14:36] got the entire messaging right and then this crisis happened.

[00:14:40] I want to just tell our listeners their response.

[00:14:43] I know that you mentioned it in your description of the episode a few minutes ago,

[00:14:47] but can we just recap that again as to how they responded, how events unfolded

[00:14:51] because you're talking about protesters on the ground in a village in Kerala

[00:14:56] taking on one of the biggest consumer brands in the world.

[00:15:00] So what does recap what happened from the company side to deal with such an episode at that point of time?

[00:15:07] So initially, of course, company denied any such impact or the depleting water level

[00:15:16] is because of their operations.

[00:15:18] All of those charges initially they denied.

[00:15:22] Eventually, you know, protests continued.

[00:15:25] They kept coming back.

[00:15:27] They kept kind of giving in like I mentioned, they said that they will supply water drinking water to the villagers.

[00:15:34] Of course, employment was one big plus.

[00:15:38] What it is important to note Anupam here is that

[00:15:42] the way Coca-Cola has dealt with this label all through.

[00:15:46] So this is not just one episode that happened with Coca-Cola.

[00:15:51] This was way back in 2004.

[00:15:53] Then I think in 2014 or sometime later, I don't recall the year,

[00:16:00] but you would recall there was this whole question on Coca-Cola and other similar products having pesticides in it.

[00:16:08] Of course.

[00:16:09] And again, it was all in the newspaper hitting headline that you can use it for cleaning your toilet or if you will,

[00:16:17] you drink it these diseases will happen to you.

[00:16:21] So, you know, again, it was not looked upon as a very responsible product that they were producing.

[00:16:28] Recently, I was reading a research report in advanced sciences,

[00:16:34] which, you know, which said that Coca-Cola is one of the biggest plastic waste producers in the world.

[00:16:41] Right? So these kind of label keep coming to the company.

[00:16:45] And I think somewhere, of course, I have not had any conversation with the company.

[00:16:49] I am just saying it from my reading of public material about the company

[00:16:54] that somewhere company knows that such kind of crisis will keep hitting it.

[00:17:00] Right? So what it has done and this is worth learning,

[00:17:04] what Coca-Cola has done, knowing well that it could be labeled as an irresponsible company.

[00:17:12] Very consciously, it has built a narrative which presents it as a very responsible,

[00:17:20] very fun loving, very loved brand.

[00:17:23] And that's something one needs to learn.

[00:17:26] And it is not only done so through messaging, but it has also backed it up with action.

[00:17:32] So they say that we will reduce our carbon footprint by so much or we have planted trees,

[00:17:39] we've done this for the ground water level and so on.

[00:17:44] And there are data and statistics that they provide regularly around this,

[00:17:48] which is noteworthy.

[00:17:50] And I think that's shaping the narrative very differently.

[00:17:52] So let's wrap up this episode with our learnings out here.

[00:17:56] Let's hear we are sitting in the year 2024 looking at cases that happened a really long time ago.

[00:18:01] Someone comes to you now dealing with the similar crisis.

[00:18:03] I'm say it's me, I have a company, I've, you know, I've, I've actually irrespective of whether I've

[00:18:09] done something right or wrong, irrespective of whether I've taken the licenses or my product is

[00:18:13] cleared all the regulatory steps.

[00:18:17] I'm still facing a major issue with villagers, with the locals.

[00:18:21] I do not want you to escalate.

[00:18:23] I do not want people to come over to my building and put up banners.

[00:18:26] I certainly don't want to be in a situation where I have to shut down my facilities.

[00:18:31] What's your advice to me?

[00:18:33] First and foremost, companies need to understand that there are three very important

[00:18:38] developments that have happened, especially in the environment space or like being

[00:18:44] looked upon as a responsible company space.

[00:18:47] Number one, government and regulatory authorities have become very conscious of it.

[00:18:54] So your BRSR norms that have come in or SDG guidelines that are there.

[00:19:00] So, you know, authorities have become very conscious around it, which was in the case

[00:19:05] 20 years ago, right?

[00:19:07] So that's one very big development.

[00:19:09] The second big development is the consumer themselves, people like you and I, we all

[00:19:14] have become conscious of the environment.

[00:19:16] And hence, as users, we are keen to partner with companies which are looked upon as,

[00:19:22] you know, environmentally and socially responsible and not just who's focused on

[00:19:27] making profits. So that's the second big development.

[00:19:31] And the third big development that has happened, Anupam, is the flow of

[00:19:34] information is like really quick.

[00:19:36] So you issues are no longer local, right?

[00:19:40] So something happens in one corner of one village.

[00:19:45] It becomes a national news if it is a large scale organization, particularly.

[00:19:50] So these three developments actually is a big signal for corporations to realize

[00:19:57] that they cannot ignore any development that is coming their way.

[00:20:05] And they cannot get away with irresponsible actions.

[00:20:10] Right? So they have to be environmentally sensitive.

[00:20:13] So my advice to you, if to answer your question, my advice to you would be that.

[00:20:21] Don't just do it for optics.

[00:20:26] You know, make sure that your operations are actually sincerely responsible.

[00:20:32] I understand that there is a business context to it and a lot of times you

[00:20:37] cannot only just be focusing on the environment and ignore business.

[00:20:41] And that's why I like the word profits with purpose.

[00:20:44] So one should focus on that.

[00:20:47] One more thing I just realized, you know, why is environment more important,

[00:20:51] more sensitive, more critical for companies today?

[00:20:54] Right? I mean, in this series, we've looked at a lot of issues

[00:20:57] that led to corporate crisis.

[00:21:00] CEO saying something random, products having certain faults in them or,

[00:21:06] you know, some family crisis of a promoter playing out in the public.

[00:21:09] And all of these are probably internal.

[00:21:12] Yes. But when you are dealing with the environment in this day and age,

[00:21:17] you think that requires a little bit more attention than anything else

[00:21:20] that a company faces? Absolutely.

[00:21:23] As in being looked upon and also being considered responsible has become

[00:21:30] like a bedrock of your operations.

[00:21:33] And here I would want to give you a very interesting anecdote that's coming

[00:21:38] to my mind, Anubhav.

[00:21:40] We had done one research and all in there a search for one of our clients

[00:21:44] to understand how environmentally sensitive consumers are.

[00:21:49] And, you know, it was a no brainer.

[00:21:52] It came out as people are highly environmentally conscious and sensitive

[00:21:56] and they would want to partner with companies which walk the talk.

[00:22:01] However, will they want to pay even one rupee extra for a product like that?

[00:22:07] Answer were mixed.

[00:22:09] So the demand of being sensitive is very high, but it doesn't match

[00:22:16] the price that one would pay.

[00:22:18] Of course, there are people who would want to pay 1000 rupees extra

[00:22:20] for a particular brand, which is environmentally sensitive.

[00:22:23] But I'm talking about the outcome that the research showed.

[00:22:29] It clearly said that people were not keen to pay extra for a company to,

[00:22:35] you know, provide environmentally sensitive or environmentally friendly product.

[00:22:41] So what I'm trying to say is it is expected now or it is assumed

[00:22:47] now that you will be responsible.

[00:22:49] And that's how the consumers are operating and consumers are king or queen.

[00:22:54] So they better be listened to.

[00:22:58] Me too.

[00:22:58] I want to ask a theoretical question now.

[00:23:00] We are done with SRP done with Coke.

[00:23:02] We're done with all the episodes that happened that we already

[00:23:05] discussed in depth on this episode.

[00:23:07] But let's talk about today in the year 2024, I am a brand.

[00:23:10] I'm a CEO and my company messed up.

[00:23:13] Okay.

[00:23:14] We went and did something and obviously mess with the environment.

[00:23:17] I mean, we are undergoing a crisis.

[00:23:19] Can I turn that crisis into an opportunity and, you know,

[00:23:22] somehow come out winning from it?

[00:23:24] And if I were to do that, what's your advice?

[00:23:26] What should I do to come out winning?

[00:23:28] Of course we can like, you know, there is a famous saying also that crisis

[00:23:35] is wasted if you don't convert it into an opportunity.

[00:23:38] So definitely you should convert it into an opportunity.

[00:23:42] However, it should not be done for optics.

[00:23:46] Right.

[00:23:47] You should really make things right.

[00:23:50] Now, what should one do?

[00:23:51] Mistake happens and things go wrong.

[00:23:56] Important is to acknowledge it like both the cases that we discussed,

[00:24:00] they were not something which were overnight crisis that suddenly hit the brands.

[00:24:05] They were brewing.

[00:24:07] So one has to be aware of the challenges that are brewing in your company

[00:24:12] and also be prepared for that bad day in case something goes wrong.

[00:24:18] Like for a lot of well-known organizations that we are currently working with,

[00:24:23] we are actually developing a complete crisis communication plan for them.

[00:24:28] And here we identify scenarios that this can go wrong, that can go wrong

[00:24:33] and what should be your approach.

[00:24:35] So advanced planning can be done.

[00:24:38] Having said that, talking about environmental crisis particularly,

[00:24:44] there are two, three things that we have to remember.

[00:24:50] Number one, like I said, both government consumers have become conscious of it.

[00:24:56] Plus the information flow is very, very rapid.

[00:24:59] So you cannot ignore or let it brew.

[00:25:04] You have to act quickly on it.

[00:25:07] So that's first thing one needs to remember when it comes to environmental

[00:25:10] led crisis.

[00:25:12] The second important thing that one needs to remember is,

[00:25:16] unless it's like an oil rig suddenly blowing out or you were not prepared

[00:25:22] for it that something went wrong.

[00:25:24] If the crisis, if you know that your operations are such,

[00:25:29] that there could be conversations around your practices

[00:25:33] which are not environmentally friendly, please invest in the narrative

[00:25:38] which will also show the world the other side of the picture that while your

[00:25:43] operations are impacting some aspect, how are you offsetting it at some

[00:25:48] other aspects and certain organizations.

[00:25:51] In fact, ITC tops my recall here, even Coca-Cola for that matter,

[00:25:56] that they are doing it very well while they are not looked upon or some

[00:26:00] people may brand them as relatively irresponsible operations.

[00:26:05] The kind of work that they are doing towards environment conservation

[00:26:10] is also noteworthy and they're actually investing in narrating it to the world.

[00:26:15] And the third aspect that one needs to remember is while you are

[00:26:18] developing these narratives, they cannot be hollow.

[00:26:21] You have to back it up with solid action around it with data,

[00:26:26] with proof points.

[00:26:28] And these are the three things which one must remember around any

[00:26:33] environmental crisis.

[00:26:35] And that is a wrap on this episode of Repetition Matters.

[00:26:38] My guests, Mr. Samar, founder and CEO of Eminence Contrary,

[00:26:41] we thank you so much for your time.