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RAN: The Mosquito in the Tent PDF Print E-mail
Justice News
Thursday, 20 May 2004 06:00
FORTUNE Magazine,  Monday, May 17, 2004
By Marc Gunther

A pesky environmental group called the Rainforest Action Network is getting
under the skin of corporate America.
One way to gauge the impact of a pressure group is by the quality of the
vitriol it provokes. By that measure, the Rainforest Action Network stands
out. When RAN, as it is known, launched a campaign against Boise Cascade,
the forest products company accused the group of using "harassment and
intimidation" to advance a "lawless, radical agenda" that would "destroy
business and halt economic development in the world's poorer countries."
Malcolm Wallop, a former U.S. Senator from Wyoming who leads a conservative
think tank, says that RAN pursues a "utopian, pollution-free socialist
world." Others have accused the group of coercion, blackmail, even
terrorism. After RAN's opponents challenged the organization's tax-exempt
status, a House subcommittee recently subpoenaed the group's financial
records, documents, and e-mails relating to civil disobedience. With an annual budget of just $2.4 million and a staff of 25 people, most in
their 20s and 30s, RAN is dwarfed in stature by well-established
environmental groups like the Audubon Society, the Sierra Club, and the
Nature Conservancy. But this hard-core band of rabble-rousers knows how to
get under the skin of big business. Using street theater, Internet
organizing, celebrity endorsements, and an understanding of brand
vulnerability, RAN has figured out how to push corporate executives'
buttons. "Groups like this just nag you to death," says Drummond Pike,
president of the Tides Foundation and a longtime supporter of RAN. "Kind of
like sleeping in a tent with a mosquito?just a nuisance when it starts, but
you can wake up later with some serious welts."

Just ask Sandy Weill, chairman of Citigroup. Four years ago a letter from
RAN arrived at his office demanding that the global financial giant stop
lending money for logging, mining, and oil-drilling projects that destroy
rain forests, threaten indigenous people, and accelerate global warming. RAN
then staged protests at bank branches and unveiled an Internet campaign
urging customers to cut up their Citi cards. About 20,000 did so, the group
says.

At first Citigroup ignored the agitators. But when the bank's reputation was
tarnished by corporate scandals?it helped finance Enron, and its Salomon
Smith Barney brokerage unit produced tainted research?RAN stepped up its
attacks. It had volunteers rappel down the side of a building across from
Citi's Midtown headquarters to unveil a 60-foot-wide banner saying, forest
destruction & global warming? we're banking o­n it! (The protesters were
charged with burglary and reckless endangerment.) RAN activists chained
themselves to the doors of bank branches in New York, San Francisco,
Washington, and Miami. (They too were arrested.) When Weill traveled to
Cornell University, his alma mater, to lecture o­n globalization, noisy
protesters showed up to greet him. Even o­n a family vacation to Europe,
Weill could not escape RAN. He opened the International Herald Tribune to
see a full-page ad, with his picture, labeling him an environmental villain.
Explaining that to his grandson was no fun, Weill said later.

On the eve of Citigroup's annual shareholder meeting in April 2003, RAN
began airing commercials o­n cable TV that showed Ed Asner, Susan Sarandon,
Darryl Hannah, and Ali MacGraw cutting up their Citi cards. That stung.
Citigroup offered to negotiate with RAN if the organization would declare a
cease-fire. RAN agreed.

In January, Citigroup and RAN said they had reached a "common understanding
of key global sustainable development issues." Citigroup simultaneously
published a sweeping environmental policy that went beyond what the bank had
announced before. The company laid out rules that govern its investments in
rain forest areas and promised not to finance projects that degrade
"critical natural habitats." The bank pledged to create equity funds, using
its own money, to invest in renewable energy and sustainable forestry.
Finally Citigroup acknowledged the problem of global warming, promised to
track greenhouse gas emissions at 12,000 buildings it owns or leases
worldwide, and said it would report o­n emissions created by the power sector
projects it finances. No other U.S. financial institution had taken as
expansive a view of its environmental responsibilities.

Recently RAN returned to the bank, not to protest but to spend a day meeting
with senior executives, including CEO Chuck Prince. "We have a good
relationship with RAN," says Pam Flaherty, a Citigroup senior vice president
who is responsible for corporate citizenship. "They genuinely care about the
issues. And these are not issues that don't matter to the world. They do."

No o­ne who understands power would believe that RAN, acting alone, could
bend $95-billion-a-year Citigroup to its will. The thing is, RAN does not
act alone. The San Francisco-based group serves as the shock troops of a
loosely organized network that includes other environmental organizations,
some with close ties to business; socially responsible investors who bring
pressure to bear through shareholder resolutions; liberal philanthropists
who finance anticorporate campaigns; and, more often than you might think,
sympathetic insiders who push their companies to change. This green
coalition has in recent years persuaded dozens of companies, including Home
Depot, Lowe's, Staples, Office Depot, and homebuilders Centex and Kaufman &
Broad, to alter their conduct to protect forests, their species, and the
people who live in them. Just this month Bank of America, under pressure
from RAN, announced environmental guidelines for itself and its borrowers
that go beyond Citigroup's. Even Boise Cascade?the company that had
denounced RAN's "lawless, radical agenda"?eventually sat down with the
environmentalists and agreed to change its wood-buying practices.

Why do powerful executives respond to this kind of pressure? They will tell
you that they don't. No company likes to admit that it can be bullied by an
advocacy group. "RAN didn't change our path," says Ron Jarvis, a Home Depot
executive who oversees wood purchasing. "But they brought their issues to
the attention of our senior management very, very quickly." That's a typical
response?companies say that pressure campaigns at most accelerate changes
already underway. To say otherwise would be to invite more aggravation.

Groups like RAN, o­n the other hand, exaggerate their own importance. "We
really are changing the world," says Mike Brune, RAN's 32-year-old executive
director. RAN, by the way, says it is by no means antibusiness. "We believe
strongly that we are helping businesses to remain profitable by working with
them to establish ethical environmental and social policies."

The truth is that companies adopt green practices for lots of reasons. They
want to please their employees. They want to avoid government regulation.
They see long-term benefits in protecting natural resources. And they care
about their reputations, which is why corporate campaigns by the likes of
RAN, Greenpeace, and Friends of the Earth have an impact.

In fact, what really enables RAN to get the attention of FORTUNE 500
companies is the business climate here. Most Americans have such a low
regard for big business that they are willing to believe the worst. (Polls
show that seven in ten Americans distrust CEOs of large corporations.) Most
also say they favor protecting the environment, even if they drive SUVs. The
result is that a receptive public awaits RAN's message: that big
corporations are wreaking havoc o­n the planet.

What's more, although the media tend to portray corporations as ruthless,
most companies shrink from a battle with groups like RAN. (Boise was an
exception.) They don't want to offend anyone. "When the big bear of
controversy enters the forest, no o­ne clambers up a tree faster than the
fabled beasts of commerce," says Eric Dezenhall, a Washington public
relations executive who defends corporate clients, and the author of Nail
'Em! Confronting High-Profile Attacks o­n Celebrities and Businesses
(Prometheus, 2003).

Most important, big companies increasingly take an expansive view of their
environmental responsibilities. They are not merely looking for ways to
reduce their own waste, pollution, and energy usage; they are pushing their
suppliers, partners, and customers to do the same. Environmentalism at
McDonald's, for example, used to be about eliminating Styrofoam and trimming
the size of straws; these days the company is trying to induce the
cattlemen, farmers, and fisheries that supply it to adopt practices that
will preserve farmland and fish for generations. Staples and Office Depot
have pledged to phase out sales of paper from endangered forests. And
Hewlett-Packard invites consumers to return used ink cartridges to the
company for reuse. Those are big shifts, and they are being driven in large
part by mainstream conservation groups like the World Resources Institute,
Environmental Defense, and Conservation International, all of which work in
partnership with business.

But a big obstacle stands in the way of the greening of corporate America:
The business case for many environmental practices remains murky, at least
in the short run. (In the long run, if we destroy rain forests or remain
dependent o­n oil, we're all in trouble.) This is where RAN comes into play.
By attacking brand-name companies, RAN hopes to tilt the business calculus
toward green practices. For example, if it is currently unprofitable for
Ford to offer a wide array of cars with hybrid-electric motors?automakers
lose thousands of dollars o­n each hybrid they sell?RAN will try to do enough
damage to Ford's reputation to convince the company that it should
recalculate the cost-benefit equation. RAN's critics call that blackmail.
Brune calls it an effort to "transform the marketplace to harmonize
ecological and social ideals with economic interests."

So while other environmental groups take polluters to court or map
endangered forests, RAN stirs up trouble. "We trot out dinosaur-shaped
balloons in the front yards of companies that refuse to protect forests,"
says Jennifer Krill, a RAN staffer who led the group's assault o­n Home
Depot. The world's biggest retailer of lumber, Home Depot has a valuable
brand and local outlets across America?which made it an inviting target for
RAN.

RAN began by hoisting a huge banner o­n a crane next to company headquarters
in Atlanta. Then it mobilized activists to oppose Home Depot's plans to open
new stores by testifying at city council and zoning meetings. They picketed
new-store openings. The Dave Matthews Band lent its support during a summer
tour.

RAN's most subversive tactic infuriated the company. After obtaining the
access code to Home Depot's in-store intercom system from a friendly
insider, RAN volunteers broadcast their own messages to customers. According
to Brune, they went like this: "'Attention, Home Depot shoppers. There's a
sale o­n wood in Aisle 13. This wood has been ripped from the heart of the
Amazon basin. There may be some blood spilled o­n the floor, so please be
careful. This wood is leading to the dislocation of indigenous communities,
soil degradation, and we're helping to rape Mother Earth.' Something to that
effect."

Because Home Depot didn't know where its timber came from, it could not deny
the charge that it sold wood from endangered forests. Says wood expert Ron
Jarvis: "When you'd ask people where the lumber came from, they'd say, 'The
loading dock.'" Today the company knows where all its wood is sourced?not
just lumber but the wood in ceiling fans, broom handles, and pencils. Why?
It's not because customers ask for wood that's been properly harvested,
Jarvis says. Rather, it's a matter of reputation. "People take pride in
working for a company that's taking a leadership role," Jarvis says.

The Home Depot campaign became a template for RAN: Target an industry
leader, then pressure its competitors to follow suit. Merely the threat of a
RAN campaign induced Lowe's to match Home Depot's wood-purchasing policy.
Big homebuilders also agreed to stop using wood from endangered forests,
after RAN infiltrated a Dallas trade show to unfurl banners calling for an
end to old-growth logging. The police arrested five activists o­n trespassing
charges.

Brune was among them. He has been arrested 11 times but has never been
convicted of a crime. (Typically, neither the police nor the companies want
to take nonviolent protesters to court.) According to Brune, RAN operates
within a tradition of nonviolent civil disobedience that runs from the
Boston Tea Party to Operation Rescue. While some opponents have tried to
link RAN with militant environmentalists who destroy property, Brune says,
"We don't support and we don't condone violence, property destruction,
vandalism. We're a peaceful organization."

RAN's agenda, however, is radical. The group opposes all major industrial
projects?mining, logging and fossil fuel extraction?in old-growth forests.
"The world can't afford more oil drilling," says Brune. RAN wants Ford to
improve the average fuel efficiency of its cars to 50 miles per gallon by
2010 and to eliminate the internal combustion engine by 2020. "We need to
reduce our emissions dramatically, and we can't do that if we are still
powered with gas," Brune says. "We're already seeing warming of the deep
oceans, melting of glaciers, species migrating toward the poles. It's
thoroughly documented."

It's no wonder that RAN's toughest opponent was Boise, the Idaho-based
company that battled environmentalists for years. Its initial meetings with
Boise were "very confrontational, very antagonistic," says Brune. (Boise
declined to comment o­n RAN.) Boise wrote to RAN's major donors, urging them
to stop giving money to the group.

Ultimately RAN got to Boise through its customers. It persuaded Kinko's,
L.L. Bean, Patagonia, and the University of Texas, among others, to cancel
all or part of their contracts with Boise. Lowe's, a major customer, wanted
to keep its own promise not to use old-growth wood, so it stepped in to
mediate the dispute between RAN and Boise. (Lowe's CEO, Robert Tillman,
called Boise's CEO, George Harad.) Last September, Boise agreed to stop
buying wood from endangered forests worldwide and offered incentives to
suppliers to harvest wood from forests independently certified as well
managed. "When that policy is matched by Boise's peers," Brune said, "it'll
enable us to push o­ne industry?the logging sector?out of old-growth forests
permanently." Since then RAN has launched a campaign against Weyerhaeuser.

In comparison, Citigroup proved a friendly target. "We have a policy of
listening to people," said Citi's Pam Flaherty, who has worked for the bank
for 36 years and was o­nce its highest-ranking woman. "Even though some
people are harder to listen to than others."

While RAN was agitating, Citigroup was meeting quietly with institutional
investors and mainstream environmentalists. Flaherty found that many of the
banks' interests were aligned with the environmentalists'. "We want to
finance projects that are well received, that don't have delays, that don't
have problems," she says. Shortly after RAN and Citi declared their
cease-fire, ten global banks, including Citi, adopted the Equator
Principles, a voluntary set of guidelines they developed to manage the
social and environmental impact of capital projects that cost $50 million or
more in the developing world. Citi's more recent environmental policy goes
further.

As it happens, Ilyse Hogue, a 34-year-old activist who leads RAN's global
finance campaign, had a personal stake in making peace with Citigroup. Her
father, James Hogue, is a Dallas stockbroker with Citi's Smith Barney unit,
where he has worked for more than 25 years. When she told her dad that she
wanted to lead the campaign at Citigroup unless he objected, he told her,
with some trepidation, that she should go ahead. When she tangled with Sandy
Weill at a shareholder meeting, her father showed the videotape to friends
and colleagues. Now he's proud of what she and RAN have done. "We're closer
than ever," she says. As are big business and even hard-core
environmentalists like RAN.
Last Updated on Thursday, 20 May 2004 06:00
 

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