AIG: Promotion Its Payback

January 9, 2013

AIGIn 2008, there was a global meltdown of the financial markets.  Most experts feel the financial institutions and lax government policies contributed to this financial disaster.  Many companies did not survive.  In the U.S., a number of financial companies survived due to a bailout from the Federal government.  Among those receiving a bailout was AIG, a financial/insurance company.  AIG received a little over $182 billion dollars in the bailout.  In return, the U.S. government received stock in the company.  Taxpayers had mix reactions about their money being used to bailout financial companies that had helped to create the problem.  The term “too big to fail” was used as a justification.  In other words, these large companies were important and their failure would make the economic situation worse.  Even some experts thought the U.S. government would not recoup the money it loaned AIG.

By the end of 2012, the U.S. government had sold all of its shares of AIG and turned a profit of over $22 million on the deal.  Still the reputations of financial institutions that took bailouts remained grim.  Most people still disliked the bailouts and had negative views of financial institutions.

AIG decided to promote its repayment and thank the people of the U.S.  On January 1, 2013, AIG launched its “Thank You America” campaign.  Here is a description of the effort and comments from AIG:

“We at AIG are proud of not only our work to rebuild the company, but also the work we do every day to help guarantee that customers and communities are prepared for the opportunities and challenges ahead – work we never stopped doing, even during the depths of the financial crisis,” said AIG President and Chief Executive Officer Robert H. Benmosche. “We thank America for allowing us to insure a brighter future and to bring on tomorrow.”

The new campaign will run for two weeks, and will include broadcast, online, and print placements. Television ads will run on high impact programming: sporting events, including NCAA Football Bowl Championship Series games and NFL playoff games; national morning shows including The Today Show and Good Morning America; and primetime television, including The Golden Globes, 60 Minutes, and Dateline. Print ads will appear in upcoming issues of major publications, including The Economist, The Financial Times, The Houston Chronicle, The Los Angeles Times, The New York Times, USAToday, The Wall Street Journal, and major trade journals. Online ads buys include a masthead and mobile roadblock on YouTube, and homepage takeovers of nytimes.com, MSN.com, WSJ.com and Yahoo!. The campaign will also be promoted on social media and can be seen on AIG’s YouTube channel.

AIG promoted the campaign on social media.  Its Facebook page had links to the campaign, its videos were on YouTube, and here is a Tweet about it:

AIG’s Thank You, America #ad just ran on the #BiggestLoser Are you watching? RT if you saw it, or catch it again here http://www.youtube.com/AIG?x=us-en_showcase2_86_15 …

The campaign highlights the pay back but also shows the different ways AIG has been helping Americans recover from disasters such as Hurricane Sandy.  The message is a positive one of repayment and recovery for AIG and the U.S. We will have to see how people react to these messages.

Questions to Consider?

1.  What are the benefits to AIG of this campaign?

2.  What are the dangers to AIG of this campaign?

3.  Why would AIG be using such a heavy push in social media and legacy media?

4.  If you were at AIG, how would you defend taking the original bailout money?

5.  Why do financial institutions have a lingering reputation problem?

6.  What other actions need to be taken to help financial institutions repair their reputations and why will these actions help?


Nike “Gold Digging”

August 16, 2012

The US women just completed an amazing Olympics.  Blog writer loves track and field so I will mention the world recording 4 by 100 relay and a blistering 4 by 400 relay by the women runners.  Allyson Felix stood out by winning 3 gold medals and making the finals of the 100 meters.  If you like other sports there are story lines for those as well.

One thing the Olympics cannot escape is sponsorship issues.  The negatives for the US women revolved around sponsorship issues.  The issue as Rule 40.  Basically athletes cannot use the Olympics to market/promote no-Olympic sponsors.  That means Adidas is okay but not Nike.  So athletes like Sanya Richards-Ross complained about it.  This was commercial not free speech and detracted from Olympic performances.  The Olympics sets rules and participation is an honor not a right.  Detraction number 1.  Detraction number 2 was the controversy over the women’s soccer team donning shirts reading “Greatness has been found.”  It was considered gloating and in poor taste.  Again, it becomes about the sponsors and what they want harms the athletes.

Now Nike has a new shirt that is raising eyebrows and protests.  As full disclosure, I do not hate Nike.  In fact I own many Nike shoes and running apparel.  However, there are times when even companies you like do things that are questionable.  The new shirt is for women and says “Gold digging.”  The shirt is meant to be funny.  Gold digging is traditionally a women looking to romance/marry for money.  In this case it means winning gold at the Olympics.  We can question (1) is the joke funny at all and (2) is it more offensive than funny.  Here is one take on it:

We don’t like to be super sensitive about these things, but something about this seems… off. The t-shirt features metallic gold lettering and Nike’s signature check logo and is only available for women (because women presumably love to be called gold diggers). But we can’t help but wonder if some ladies will be less than pleased with this kind of depiction.”

Questions to Consider?

1.  Is the shirt situation a crisis or an incident for Nike?  Explain your decision.

2.  Is it unethical for non-Olympic sponsor to pressure athletes into marking for them during the Olympics?  Why or why not?

3.  What arguments can be made for and against the US Women’s Soccer Team wearing the victory shirts?

4.  Overall, how have Nike’s actions impacted potential customers, especially women?

5.  If you were Nike, how would you defend the gold digging shirt?Image


Apple vs New York Times: Not Really but It Seemed Interesting

February 21, 2012

Anyone following Apple knows that the New York Times wrote a series of very critical articles about the Foxconn that makes iPads and iPods for Apples.  And to be fair, the facility makes produces for other electronics companies as well.  The focus of the article was on the working conditions and why electronics are no longer manufactured in the U.S.  Most people who read the articles would agree that the articles cast Apple in a negative light.  Moreover, a number of protests against Apple were appearing at this time as well.  You can see the earlier case about it at this site.

 

That brings us the supposed fight between Apple and the New York Times.  A number of online sources reported that Apple had snubbed the New York Times by not providing its reporters early access to its OS X 10.8 Mountain Lion operating system.  Here is a sample of the reports:

 

Apple Shuns The New York Times in OS X Mountain Lion Coverage Over Foxconn Reporting

Friday February 17, 2012 7:14 am PST by Eric Slivka

With yesterday’s announcements from Apple regarding its forthcoming OS X 10.8 Mountain Lion operating system, a number of media outlets had been provided with advance briefings and early copies of the software for the purposes of having reviews prepared and ready to go. When Apple published its press release and went live with OS X Mountain Lion information at 8:30 AM Eastern yesterday, the embargo was lifted and all of the pre-briefed publications immediately posted their stories on the topic.

 

February 21, 2012

Snubbing the Media — Strategy or Revenge? Apple’s Stiff-Arming Of the NY Times After Paper’s Foxconn Exposé Offers a PR Lesson In Access Journalism — Gadget Giant Leaves Gray Lady Out In the Cold By Breaking News Elsewhere

Times all-star contributing columnist David Pogue got through to Schiller, but no regular Times journalist could make a dent. The reason for all this disrepect, the Washington Post‘s Erik Wemple speculates, was the hard-hitting Foxconn series the Times’ ran last month. Foxconn assembles roughly 40% of the world’s electronic devices, including those sold by Dells, HP and Sony — but the Times‘ series singled out Apple in way that many, including CEO Cook, thought was misleading and unfair. Was the cold shoulder the Gray Lady got this week really payback for the series? Reporters and editors at the Times seem to think so, Fortune reports.

The implications from the reporter were that Apple was purposeful not providing the New York Times with same early access to information it was providing other journalists.  In essence, the view was Apple was punishing the New York Times for its negative story.  This is a serious charge.  Organizations have every right to decide who they send information to and who they do not.  This point should not be disputed.  However, denying access because of a negative story is a dangerous measure.  At its worst, such an action is an attempt at censorship.  The message is, “mess with us and you pay a price.”  Journalists need to be free to write whatever they feel is appropriate and accurate.  PR people should not corrupt the system by trying to leverage any form of influence over them.  Here is how report described the situation:

 

Was the cold shoulder the Gray Lady got this week really payback for the series?  Reporters and editors at the Times seem to think so. Wemple got two quotes, one off the record, one on:

“They are playing access journalism … I’ve heard it from people inside Apple: They said, look, you guys are going to get less access based on the iEconomy series.”

“We’re never happy with our access to Apple. We never have been. Apple is a difficult company to report on,” says Damon Darlin, the paper’s tech editor. When asked how big a deal is the Journal‘s exclusive with Cook, Darlin responds: “Talking to the CEO of one of the largest technology companies, the highest-valued company of the world? Yes, we would like to do that. They know that.”

However, most reports were amended because there is no proof purposeful action by Apple to freeze out the New York Times.  Apple had briefed reporters before the release but asked for an embargo on stories until a specific time.  Most people based the negative actions by Apple on the New York Times key technology reporter David Pogue’s story was “slow” in appearing after the embargo was lifted and used information from the news release, not the information found in the early briefings.  Later reports included other reporters saying they saw Pogue waiting for a briefing and Pogue stated he had access to the early information.  In the end, the story was a non-story but did allow reporters to vent their frustration with Apple’s generally unresponsive nature to “the media.”

Questions to Consider

1.  If a company was restricting access to a media source after a negative story, could you justify that action?  Why or why not?

2.  What ethical issues are raised in this case especially those about quick, online reports?

3.  What do the tone of the stories saying about Apple’s reputation and relationship with many online and legacy media reporters?

4.  What responsibility does David Pogue have for correcting the story that he had been snubbed by Apple?  How did you reach that conclusion?

5.  Why has Apple used a limited access policy toward the media?  Has it been an effective strategy?  Why or why not?

 


Fear the Fruit? Cantaloupe and Listeria in 2011

September 28, 2011

Cantaloupe is an ancient fruit with references dating back to ancient Egypt in  2600BC.  People are very familiar with the orange fruit.  It is a staple of summer along with watermelon.  But any food can become deadly if it is tainted in some way.  In 2011, a deadly listeria outbreak was caused by cantaloupe from Colorado.  It was a multistate outbreak with victims appearing in California, Colorado, Florida, Illinois, Indiana, Kansas, Maryland, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, Texas, Virginia, West Virginia, Wisconsin, and Wyoming. By late September of 2011, 16 deaths were associated with the outbreak making it one of the most outbreaks in over a decade

Listeria is not uncommon with over 1,600 cases in the U.S. each year and an average of three to four outbreaks.  Unfortunately, the death rate from listeria tends to be higher than for other food-borne bacteria.  Here is some additional information about listeria from the Cetners for Disease Control (CDC):

 

What is listeriosis?

Listeriosis, a serious infection usually caused by eating food contaminated with the bacterium Listeria monocytogenes, is an important public health problem in the United States. The disease primarily affects older adults, pregnant women, newborns, and adults with weakened immune systems. However, rarely, persons without these risk factors can also be affected. The risk may be reduced by following a few simple recommendations.

What are the symptoms of listeriosis?

A person with listeriosis usually has fever and muscle aches, often preceded by diarrhea or other gastrointestinal symptoms. Almost everyone who is diagnosed with listeriosis has “invasive” infection, in which the bacteria spread beyond the gastrointestinal tract. The symptoms vary with the infected person:

  • Pregnant women: Pregnant women typically experience only a mild, flu-like illness. However, infections during pregnancy can lead to miscarriage, stillbirth, premature delivery, or life-threatening infection of the newborn.
  • Persons other than pregnant women: Symptoms, in addition to fever and muscle aches, can include headache, stiff neck, confusion, loss of balance, and convulsions.

How great is the risk for listeriosis?

In the United States, an estimated 1,600 persons become seriously ill with listeriosis each year. Of these, 260 die. The following groups are at increased risk:

  • Pregnant women: Pregnant women are about 20 times more likely than other healthy adults to get listeriosis. About one in six (17%) cases of listeriosis occurs during pregnancy.
  • Newborns: Newborns suffer the most serious effects of infection in pregnancy.
  • Persons with weakened immune systems from transplants or certain diseases, therapies, or medications.
  • Persons with cancer, diabetes, alcoholism, liver or kidney disease.
  • Persons with AIDS: They are almost 300 times more likely to get listeriosis than people with normal immune systems.
  • Older adults

Healthy children and adults occasionally get infected with Listeria, but they rarely become seriously ill.

 

With any food-borne illness, the CDC works closely with state and local health officials to identify the cause of an outbreak once one has been identified.  The research involves interviewing victims to determine what and where they have eaten and to test food once possible sources have been identified.  In this case, the source was linked to Jensen Farms and its field in Granada, Colorado.  Consumers were warned not to eat Rocky Ford cantaloupes from Jensen Farms.  Clearly this was a case of product harm and a recall was issued.  The Food and Drug Administration (FDA) posted the official government statement on the recall:

Jensen Farms Recalls Cantaloupe Due to Possible Health Risk

 

Contact:
Consumer
800-267-4561
recall@rfordcantaloupe.com

FOR IMMEDIATE RELEASE – September 14, 2011 – Jensen Farms, of Holly, CO is voluntarily recalling their shipments of Rocky Ford whole cantaloupe because they have the potential to be contaminated with Listeria. The company is working with the State of Colorado and the FDA to inform consumers of this recall. L. monocytogenes is a bacterium that can contaminate foods and cause a mild non-invasive illness (called listerial gastroenteritis) or a severe, sometimes life-threatening, illness (called invasive listeriosis). Persons who have the greatest risk of experiencing listeriosis after consuming foods contaminated with L. monocytogenes are fetuses and neonates who are infected after the mother is exposed to L. monocytogenes during pregnancy, the elderly, and persons with weakened immune systems.

The whole cantaloupes in question were shipped between July 29th, 2011 and September 10th 2011, and distributed to the following states: IL, WY, TN, UT, TX, CO, MN, KS, NM, NC, MO, NE, OK, AZ, NJ, NY, PA. The whole cantaloupes have a green and white sticker that reads: Product of USA- Frontera Produce-Colorado Fresh-Rocky Ford-Cantaloupe or a gray, yellow, and green sticker that reads: Jensen Farms-Sweet Rocky Fords. If the whole cantaloupe is unlabeled, please contact your retail store for sourcing information. Jensen Farms is requesting any consumer that many have one of these cantaloupes to please destroy the products.

The recall involves only whole cantaloupe shipped by Jensen Farms, and no other commodities are involved. Jensen Farms feels it is prudent to participate in the recall as the State of Colorado has stated (in their September 12th, 2011 press release) that people at a high risk for infection should not eat whole cantaloupe from the Rocky Ford growing region.

“Jensen Farms continues to stay committed to the highest levels of food safety and maintains many third party safety audits, as we have for many years. We continually look for ways to enhance our protocol,” said Ryan Jensen, partner at Jensen Farms. Jensen Farms is a 3rd generation family farm of the Holly, Colorado community.

Consumers with questions may contact Jensen Farms via email at recall@rfordcantaloupe.com or phone 1-800-267-4561 between the hours of 9am and 4pm MST.

 

###

 The notice provided links to Flickr pictures of the recalled fruit.  Visuals make it easier for to identify if they have the recalled product. 

The product harm created a crisis for Jensen Farms.  Here is their announcement of the recall from their web site:

 

Company Statement

STATEMENT REGARDING 9/16/11 CANTALOUPE TEST RESULTS FROM COLORADO DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT “We are deeply saddened to learn that cantaloupes grown on our farm have been linked to the current Listeria outbreak. Our hearts go out to those individuals and their families who have been affected by this terrible situation. “We have been cooperating fully with public health officials who are trying to determine the source of the outbreak, and we will continue to do everything we can to assist them in their efforts. We hope that the investigation into the entire supply chain from farm to retail identifies the source of the contamination so that appropriate steps can be taken to prevent such an occurrence from ever happening again.”

Eric and Ryan Jensen
Jensen Farms

Press Release

Jensen Farms Recalls Cantaloupe Due to Possible Health Risk FOR IMMEDIATE RELEASE September 14th, 2011-Jensen Farms, of Holly, CO is voluntarily recalling their shipments of Rocky Ford whole cantaloupe because they have the potential to be contaminated with Listeria. The company is working with the State of Colorado and the FDA to inform consumers of this recall. L. monocytogenes is a bacterium that can contaminate foods and cause a mild non-invasive illness (called listerial gastroenteritis) or a severe, sometimes life-threatening, illness (called invasive listeriosis). Persons who have the greatest risk of experiencing listeriosis after consuming foods contaminated with L. monocytogenes are fetuses and neonates who are infected after the mother is exposed to L. monocytogenes during pregnancy, the elderly, and persons with weakened immune systems. The whole cantaloupes in question were shipped between July 29th, 2011 and September 10th 2011, and distributed to the following states: IL, WY, TN, UT, TX, CO, MN, KS, NM, NC, MO, NE, OK, AZ, NJ, NY, PA. The whole cantaloupes have a green and white sticker that reads: Product of USA- Frontera Produce-Colorado Fresh-Rocky Ford- Cantaloupe or a gray, yellow, and green sticker that reads: Jensen Farms-Sweet Rocky Fords. If the whole cantaloupe is unlabeled, please contact your retail store for sourcing information. Jensen Farms is requesting any consumer that may have one of these cantaloupes to please destroy the products. The recall involves only whole cantaloupe shipped by Jensen Farms, and no other commodities are involved. Jensen Farms feels it is prudent to participate in the recall as the State of Colorado has stated (in their September 12th, 2011 press release) that people at a high risk for infection should not eat whole cantaloupe from the Rocky Ford growing region. “Jensen Farms continues to stay committed to the highest levels of food safety and maintains many third party safety audits, as we have for many years. We continually look for ways to enhance our protocol,” said Ryan Jensen, partner at Jensen Farms. Jensen Farms is a 3rd generation family farm of the Holly, Colorado community. Consumers with questions may contact Jensen Farms via email at recall@rfordcantaloupe.com or phone 1-800-267-4561 between the hours of 9am and 4pm MST.

The recall information could be found using a link placed in the bottom right corner of the Jensen Farms home page.  The information was clearly visible in the “Farm Blog” tab and easy to access.  Jensen Farms has a Facebook page with a little over 200 fans/likes.  They posted a statement there are well and their supports rallied around the company.  Below is the Facebook post and some responses:

Many Thanks to those with continued support of Jensen Farms

We want to reach out an thank everyone for supporting us through this terrible time in the history of our beloved farm. Your messages and wall posts are helping us stay motivated, and optimistic about our future. Thank you…

Responses:

We are very sorry to hear about your time of trial our family will lift up you, your family and the others affected by this trial. God Bless and keep trusting.

I feel the store may have been the issue..I hope and pray your farm is clean so you can continue to share good food with us all….But Please do us all a favor…edcuate everyone as you learn…..the truth:) We are all with you and with the families that are ill…we are just a small farm , we grow organics for ourself but need farms like you to supply what we dont grow for ourself….Our trust is in the truth….best wishes to your family and the families of the ill to get to the bottom of this , to learn and grow

Love you guys and hope everything gets cleared up soon!!!

Praying for you and your family. I will continue to purchase our produce direct from the Arkansas Valley. Hope the consumers will learn how important it is to wash their produce no matter what. Don’t ever loose the faith, God Bless.

I am praying for your family/farm, and will continue to buy your produce!

I cant even imagine but you have mine and my families support..click on me if you need any help, I’ll try and do what ever I can…Im really ticked that this happened weather it was planted or just a freak of nature. Im even more ticked that someone is wanting to be greedy and gain from this mess..But you do have my support, just ask…thats what people do they come together and help

It really could have happened to anyone, so my best hope is that people understand this and don’t let it stop them from buying your produce in the future. Best of luck!

I’m so sorry this has happened and you will always have my support!

Praying for you guys! This is just heart breaking and if there is anything we can do to help just let us know! I love cantaloupe, it’s my favorite. Everyone needs to make sure they wash their produce before it is consumed.

 

With people becoming ill and dying, a lawsuit was quick to follow the crisis.   Charles Palmer, 71 years-old, was hospitalized for two weeks from the listeria in the cantaloupe he ate.  Here are the Jensen Farm comments in the story about the lawsuit:

“We’re deeply saddened that there’s a possibility that our family’s cantaloupe could have gotten somebody sick,” Jensen Farms owner Eric Jensen told 7NEWS Thursday. “Our first priority is the public’s health and safety.”  Jensen’s fourth-generation family farm in Holly, normally busy with harvest now, was ghostly quiet after the suspected listeria contamination forced Jensen to shut down Monday and destroy his cantaloupe crops.

 

The grower launched a voluntary nationwide recall on Wednesday.

Jensen said the farm had never faced a public health crisis and he’d never heard of listeria contaminating cantaloupe.  “We’re still in shock,” Jensen said, choking with emotion. “We’re completely focused on our recall efforts right now.”  Jensen said he had no clue about the source of the contamination, adding that it could still be found “on the retail end.”  While a terrible setback, Jensen said that the listeria outbreak wouldn’t claim his farm.

“We’ll definitely be back,” Jensen vowed.

 

Crises with victims typically are extended in time and cost by lawsuits.  Victims sue the organization causing longer attention from the media and increased costs from the litigation and any settlements resulting from the litigation. 

Questions to Consider

1.  How would you rate the crisis response from Jensen Farms and what factors influenced that rating?

2.  How does the government’s involved in a crisis response help or hurt the organization trying to management the crisis?

3.  How did the Jensen Farm recall statement differ from the FDA’s and why would there be a difference?

4.  Was it a good or bad idea for Jensen Farms to post a message of Facebook?  What is the reasoning behind your conclusion?

5.  In general, how might the supportive statements on Facebook help Jensen Farms through this crisis?

6.  Is there any way Jensen Farms might effectively incorporate the supportive Facebook comments into their later crisis response strategies?

7.  What advice would you give to Jensen Farms about recovering from the crisis at this point?

 


H&M Goes to Detox Thanks to Greenpeace

September 27, 2011

In July of 2011, Greenpeace began the Detox Campaign.  The purpose of the campaign is to eliminate the toxic chemicals being released into the water by textile manufactures.  Once again, the apparel industry was the target because they are purchasing the materials that are creating the toxins.  As Greenpeace stated:

“During our recent investigations, Greenpeace identified links between a number of major clothing brands – including the sportswear giants Nike and Adidas and the fast-fashion retailer H&M – and textile factories in China that are releasing hazardous chemicals into our rivers.”

 

Their publication, “Dirty Laundry 2:  Hung Out of Dry,” identified 15 major brands that were linked to the toxin producing textiles.  Among the brands specifically identified by name at the Detox web site are Nike, Adidas, and H&M. 

Puma was the first to accept the challenge and detox.  Here is their announcement:

In line with PUMA’s long-term sustainability program, the Sportlifestyle company PUMA recognizes the urgent need for reducing and eliminating industrial releases of all hazardous chemicals[1] . According to its approach based on prevention and precautionary principles [2], PUMA is committed to eliminate the discharges of all hazardous chemicals from the whole lifecycle and all production procedures that are associated with the making and using of PUMA products[3] by 2020.

PUMA understands the scope of the commitment to be a longterm vision – with short term practice to be defined in the clarification of actions to follow. To ensure transparency, PUMA will report on the progress of this commitment in its annual PUMA Sustainability Report.

An Action Plan will be set up by PUMA within eight weeks from the time this commitment was made.

 

[1]All hazardous chemicals means all those that show intrinsically hazardous properties (persistent, bioaccumulative and toxic (PBT); very persistent and very bioaccumulative (vPvB); carcinogenic, mutagenic and toxic for reproduction (CMR); endocrine disruptors (ED). This will require establishing – ideally with other industry actors – a corresponding list of the hazardous chemicals concerned that will be regularly reviewed.

[2]This means taking preventive action before waiting for conclusive scientific proof regarding cause and effect between the substance (or activity) and the damage. It is based on the assumption that some hazardous substances cannot be rendered harmless by the receiving environment and that prevention of potentially serious or irreversible damage is required, even in the absence of full scientific certainty.

[3]This means the commitment applies to the environmental practices of the entire company and for the whole product-folio of the company. This includes, as a longterm vision, all its suppliers or facilities horizontally across all owned brands and licensed companies as well as vertically down its supply chain. As a first step – within 18 months – this will cover all Tier 1 and vertical suppliers across the PUMA brand. Through this step PUMA aims to exert power through its Tier 1 suppliers down to Tier 2 suppliers which include wet process.

Once Puma committed in July, Greenpeace upped the pressure on Nike and Adidas by issue a video challenge.  The video showed people dancing and stripping in front of Nike and Adidas stores around the world.  Nike jointed Puma in August followed a few days later by Adidas.  Here is the Adidas statement:

 

adidas Group’s Commitment to Zero Discharge of hazardous chemicals

Herzogenaurach, August 26, 2011

Context

Since July 2011 Greenpeace International has been campaigning to drive change in our industry. They are calling for the zero discharge of all hazardous and persistent chemicals at all points in global supply chains: from the cotton fields, to the mills and dye houses that make the fabric and the garment production. In China alone, there are an estimated 50,000 textile mills and hundreds of chemicals suppliers. To put this in context, the adidas Group buys fabric from 10 key textile mills and dye houses in China. These materials suppliers follow some of the strictest standards in the industry.

Greenpeace has directed its campaign towards sporting goods companies in the belief that they can act as a catalyst for change for the whole industry. Why? Because sporting goods companies, such as the adidas Group, are already widely recognised for their leadership when it comes to environmental sustainability. The adidas Group has one of the most stringent restricted substances policies of any consumer goods company operating in the apparel sector. We have been working successfully on the reduction and progressive elimination of hazardous chemicals in our supply chain for more than 15 years.

Greenpeace’s Detox campaign has been characterised as a competition among brands. The simple truth, however, is that there can be no “winners” unless the industry acts together. With that objective in mind, the adidas Group has together with other brands been working tirelessly in recent weeks to bring the industry together in a forum to develop a roadmap that will address the “zero discharge” challenge that Greenpeace has posed. That forum is planned to be held at the end of September in Amsterdam.

The following statement is our commitment to deliver change.

Our statement to Greenpeace

The adidas Group1 is committed to the goal of zero discharge2 of hazardous chemicals3 from our supply chain via all pathways, with a 2020 timeline.

The scale and complexity of this endeavour make this a very challenging task, which we will work on through an open and informed dialogue with all stakeholders.

If we are to deliver lasting solutions, our actions need to be guided by transparency, fact-based decision-making and based on a preventative, precautionary4 and integrated approach to chemicals management.

Within seven weeks, we will develop a roadmap specifically for the adidas Group and our entire supply chain, which will include programmes and actions that we commit to, including actions concerning disclosure. In addition, we will develop and disclose a joint roadmap to detail specific programmes and actions that we can take collectively with other brands to drive our industry towards the goal of zero discharge of hazardous chemicals.

This goal demands the collective action of industry, regulators and other stakeholders. We believe that the elimination of hazardous chemicals needs not only collaboration and partnership with our industry peers, but also a holistic and integrated approach. We will apply value-chain as well as life-cycle thinking and innovation throughout this process and to our approach for Integrated Chemicals Management.

Further, we recognise that to achieve the goal of zero discharge of hazardous chemicals, mechanisms for disclosure and transparency about the hazardous chemicals used in our global supply chains are important and necessary, in line with the ‘right to know principle’5.

A set of actions to be executed by the adidas Group within the period of these seven weeks will be:

Re-emphasising to our suppliers, T1 and nominated T2, the strict standards of our Environmental Guidelines and our Restricted Substances List (RSL).

 

Request information from our suppliers in relation to the use of NPEs6 in the manufacturing processes and request that they require of their sub-suppliers to avoid the intentional use of NPEs.

 

Request information from our T2 suppliers about their chemicals suppliers.

 

Give renewed notice to our suppliers that they must eliminate and replace hazardous substances that have been banned from use, with a non-hazardous chemical.

 

Increase the focus on chemicals management and wastewater treatment practices in our regular, comprehensive, environmental audit programme, with specific attention given to the T2 suppliers.

 

Begin developing a workshop approach for designers and product developers, where the understanding and knowledge of the colour choice consequences will be enhanced, as well as screening support is delivered. This work will be supported by our target-in-progress to reduce the number of colours used.

 

Continue our dialogue with peers to develop a joint roadmap.

 

Engage with other brands and associations to increase the leverage of such a joint roadmap.

 

Furthermore, we foresee that the joint roadmap would contain activities, research and decision milestones related to the following, specific aspects:

Application of a value-chain approach with a set of priorities and a phased approach.

 

Drive the implementation of a Globally Harmonised System of Classification and Labelling of Chemicals.

 

Develop or apply an approach to structure inventories of hazardous chemicals.

 

Apply a rigorous and transparent verification procedure.

 

Develop a joint generic environmental audit approach, with specific attention to, but not narrowly focussed on, chemicals management. The additional purpose will be to begin sharing audit experiences and results between brands with the ultimate aim to improve environmental audit coverage and reduce duplication.

 

Develop a single standard of good environmental practices for dye houses. This will include sound chemicals management. The development will be done in wide consultation.

 

Work with chemicals suppliers to develop screening, selection criteria and prioritisation approaches to drive the elimination of hazardous chemicals and the substitution with less harmful chemicals.

 

Strive to define timelines for the phase-out of the prioritised hazardous substances.

 

Assess the need for inclusion of additional chemicals to the RSL.

 

Assess the need for inclusion of additional chemicals on lists of banned (from the manufacturing) chemicals.

 

Develop mechanisms to transfer experiences with banned, phased-out chemicals from region to region and promote the global implementation of bans that have already been successfully executed in one region.

 

Enter into a dialogue with scientists and regulators in different regions with the purpose of influencing the pace of regulation of hazardous chemicals and the diffusion of a global approach to regulation.

 

Many of these activities build on programmes and initiatives which the adidas Group is already committed to, through our existing industry collaborations, such as the Sustainable Apparel Coalition, the OIA (Outdoor Industry Association) Working Group on Toxics and AFIRM.

1adidas Group and its brands: adidas, Reebok, TaylorMade-adidas Golf, Rockport and CCM-Hockey.

2Zero discharge: Means elimination of all releases, via all pathways of release, i.e. discharges, emissions and losses, from our supply chain and our products.

3‘Hazardous chemicals’ means all those that show intrinsically hazardous properties (persistent, bio-accumulative and toxic (PBT); very persistent and very bio-accumulative (vPvB); carcinogenic, mutagenic and toxic for reproduction (CMR); endocrine disruptors (ED); or equivalent concern), not just those that have been regulated or restricted in other regions.

4Precautionary approach: It means that when scientific evidence suggests a substance may harm the environment or human health, but the type or magnitude of harm is not yet known, a preventative approach towards potentially serious or irreversible damage should be taken, recognising the fact that such proof of harm may not be possible. The process of applying the precautionary approach must involve an examination of the full range of alternatives, including, where necessary, the development of harmless alternatives where they do not already exist.

5‘Right to know principle’ Is defined as practices that allow members of the public access to environmental information – in this case specifically about the uses and discharges of chemicals based on reported quantities of releases of hazardous chemicals to the environment, facility-by-facility, year-by-year.

6Nonylphenol ethoxylates.

Once Greenpeace had the three athletic apparel manufactures onboard, the attention shifted to Swedish-based retailor H&M.  In addition to the web site, Greenpeace provide links so that blogs and Tweets could feature H&M and the need to Detox raising the profile of the toxic clothes problem on search engines.  People were encouraged to question H&M’s efforts on H&M’s Facebook page, sign a Twitter petition, and, in the real world, activists began placing detox stickers on H&M store windows.  The result was meeting between H&M and Greenpeace resulting in H&M detoxing itself.  Here is the H&M statement:

 

H&M engages with Greenpeace

Greenpeace International is calling for zero discharge of all hazardous chemicals in the global textile supply chain. H&M shares this goal with Greenpeace; since 1995 H&M has been working practically to reduce the use and impact of hazardous chemicals using an approach based on the Precautionary Principle. This is a continuous process depending on development of science and technology and revisions will therefore be necessary in future, not limited to the period up to 2020.

Why has Greenpeace targeted a campaign against H&M? As a leading actor with a well reputed Chemicals Management, H&M has the size and ability to act as a catalyst for change in the industry. H&M has also recognized the importance of cooperation; the industry must act together to achieve zero discharge. One example of this is as member of the steering committee of AFIRM (Apparel and Footwear Industry RSL (Restricted Substance List) Management group). The aim of AFIRM group is to reduce the use and impact of hazardous substances in the apparel and footwear supply chain. H&M is also an active member in Sustainable Apparel Coalition.

H&M’s Chemicals Management includes one of the most stringent chemical restrictions in the apparel sector. H&M also makes sure that these restrictions are understood and applied in its supply chain.

H&M’s Commitment to Zero Discharge of Hazardous Chemicals

H&M has since more than a decade recognized the urgent need to eliminate Hazardous (i) chemicals and has an approach based on prevention and the precautionary principle (ii).

H&M is committed to continuously eliminate the use of all hazardous chemicals and hence achieve zero discharge (iii) of the same from all production procedures that are associated with the making and using of H&M products (iv), at the latest by 2020 (f1).

We recognize that mechanisms for disclosure and transparency about the hazardous chemicals used in our global supply chains are important and necessary. In line with the right to know principle (v) we will increase the public availability and transparency of our restricted substance list and audit process and will set up public disclosure of discharges of hazardous chemicals in our supply chain. We will promote development of common standards towards this end.

H&M also commits to support systemic (i.e., wider societal and policy) change to achieve zero discharge of hazardous chemicals (associated with supply chains and the lifecycles of products) within one generation (vi) or less.

Due to the scale and complexity of this endeavour, true success can only be achieved by engaging with other companies in the apparel sector and stakeholders such as regulators, NGOs and the chemical industry. H&M will continue its efforts to create awareness and drive more responsible practices within the industry.

H&M is committed to continuously engage with and put demands on the chemical industry in order to spur innovation of safer alternatives to any chemical identified as hazardous. Similarly, H&M is committed to engage with material manufacturers to implement new technologies and safer chemicals as they become available.

H&M understands the scope of the commitment to be a long term vision – with short term practice to be defined in the clarification of actions to follow. An action plan will be set up by H&M within eight weeks from the time this commitment was made that will detail the measures to be taken to implement this commitment including timelines for public disclosure (f2) and for the elimination of the highest priority hazardous chemicals.

In addition, we will develop and implement a joint roadmap to detail specific programmes and actions that we can take collectively with other brands to drive our industry towards the goal of zero discharge of hazardous chemicals.

 

Actions already planned for execution by H&M within the period of these eight weeks include:

  • H&M’s publicly available list of restricted substances (vii) will be extended with technical information such as restricted limits and test methods 1st week of October. An updated version will be launched before the end of 2011 taking into account the intrinsic hazards approach.
  • Initiate investigation into how to increase the focus on chemicals management and wastewater monitoring practices in H&M’s environmental audit program, and how to make results more transparent, with specific attention given to discharges and factories with chemical intensive production processes such as wet processes.
  • Request information from our suppliers in relation to the use (e.g. for other brands) of Nonylphenol ethoxylates (NPEs) in the manufacturing processes and request that they require from their sub-supplier to not intentionally use and release NPEs. At the same time, we will re-emphasise to our suppliers that they are contractually bound to comply with the strict standards of our Restricted Substances List. As part of this request for information we will immediately provide Greenpeace the identity* of the suppliers responsible for the products tested in the Greenpeace Report, and the quantities of all alkylphenol ethoxylates (APE) discharges, and work with urgency to reinforce the controls on all possible releases of APE from their production.

    *Our intent is to reveal this information under a non-disclosure agreement based on discussion with suppliers and the result of this investigation.

  • Request information from our suppliers about their chemicals suppliers – specifically on how they control and report on what chemical ingredients they are using.

Footnotes:

(f1) We recognize the need for continuous review of the identification process and elimination of hazardous substances based on the intrinsic properties science.

(f2) Note: the first data should be reported to the public by end 2012

(i) Hazardous chemicals means all those that show intrinsically hazardous properties (persistent, bio-accumulative and toxic (PBT); very persistent and very bioaccumulative (vPvB); carcinogenic, mutagenic and toxic for reproduction (CMR); endocrine disruptors (ED); or equivalent concern), not just those that have been regulated or restricted in other regions.

(ii) Precautionary approach: It means that when scientific evidence suggests a substance may harm the environment or human health, but the type or magnitude of harm is not yet known, a preventative approach towards potentially serious or irreversible damage should be taken, recognising the fact that such proof of harm may not be possible. The process of applying the precautionary approach must involve an examination of the full range of alternatives, including, where necessary, the development of harmless alternatives where they do not already exist. It is based on the understanding that some hazardous substances cannot be rendered harmless by the receiving environment (i.e. there are no `environmentally acceptable´ use or discharge levels)

(iii) Zero discharge means elimination of all releases, via all pathways of release, i.e. discharges, emissions and losses, from our supply chain and our products.

(iv) This means the commitment applies to the environmental practices of the entire company and for the whole product-folio of the company. This includes, as a long-term vision, all suppliers or facilities horizontally across all owned brands and licensed companies as well as vertically up the entire supply chain (to material suppliers and dyeing/finishing facilities, in particular those which include wet processes). As a first step – within 18 months – this will cover all directly contracted strategic suppliers across the H&M brand, with a focus on chemically intensive processes, including wet processes.

(v) Right to know is defined as practices that allow members of the public access to environmental information – in this case specifically about the uses and discharges of chemicals based on reported quantities of releases of hazardous chemicals to the environment, chemical by chemical, facility-by-facility, year-by-year.

(vi) Regarding societal: One generation is generally regarded as 20-25 years.

(vii) The list of restricted substances is the summary of chemicals with hazardous properties identified as relevant for H&M’s products and processes.

Selected Achievements and Actions in Line With Above

  • First Chemical Restriction list published in 1995
  • Phase out of PVC in 2002
  • Publicly engaging with Greenpeace in 2005 in a lobbying campaign for a stricter chemical legislation in EU
  • In 2005 setting up of audit process intended to shift focus from testing final products to chemicals management in factories to ensure restricted substances are controlled and avoided from the very beginning
  • In 2006 Screening for potential substances of very high concern (SVHC) relevant for H&M’s products with the goal of eliminating their use
  • As member of AFIRM’s (viii) steering committee, working with others to educate suppliers and promote a responsible chemicals management from 2006 and onwards
  • H&M was a major contributor to Chemsec’s (ix) first SIN-list in 2008 and engaged in lobbying activities for the same
  • From 2008 and onwards, H&M is engaging with the UN to develop global general practice for spreading information on chemicals in products.
  • From 2008, H&M has contributed to a bi-annual training programme (x) organized by Swedish Chemicals Agency and Swedish International Development Cooperation Agency to improve chemical legislation and enforcement policies in developing countries.
  • H&M was the first major retailer to ban the use of Nonylphenol ethoxylates in 2009
  • H&M initiated in 2009 an industry wide project to develop a harmonized test method for Nonylphenol ethoxylates, finalized in 2010
  • H&M was the first major retailer to offer fluorocarbon-free garments with water repellent functional fabrics in 2010
  • Engagement in Sustainable Apparel Coalition (xi) from 2010 with the goal of developing a universal index to measure environmental and social performance of apparel products
  • In 2010 H&M started cooperation with chemical industry to conduct trials to convert traditional solvent based polyurethane (PU) material into water based PU.
  • H&M is the world’s number one buyer of organic cotton in 2010

In just ten weeks, Greenpeace had managed to mover four major apparel-related giants to action on detox. 

Questions to Consider

1.  What is a major difference between the Puma and the Adidas announcements about the detox change?  Why do you think this difference occurred? 

2.  Why might it have been important the Detox campaign was using a mix on online and real world actions? 

3.  What CSR and reputational advantages does Puma gain by being the first to agree to the Detox campaign?

4.  How does H&M use the announcement as a means of building its CSR reputation?  How effect do you think that might be and why?

5.  Why do you think the Detox campaign has been so successful in such a short amount of time?

6.  How ethical is Greenpeace’s approach to the Detox campaign and what lead you to that evaluation?


Too Young for “Push-up” Tops: Abercrombie Kids Slowly Understands

March 31, 2011

Abercrombie Kids, a division of Abercrombie & Fitch, sells to an age range of 7 to 14 years old.  Now that is a fairly broad range and naturally there are differences in what is appropriate for each age range.    So when the company marketed a product across this range, there was some negative reactions.  The product was the top for a bikini.  The top of the “Ashley” was push-up, designed to enhance breasts.  Many mothers and social critics cried foul over sexualizing children as young a 7. 

Here is a sample criticism

“The spring line features three styles of tops: triangle,  bandeau…and push up. All starting at size 7. The push-up tops must be big sellers—they’re at the top of the list of swim top offerings. Of course, I can see why.  When you’re shopping for a bikini, there’s basically one ideal in the universal mind. Even a 7 year old knows you’re supposed to look like the girls in the pages of the Sports Illustrated swimsuit issue.

The thing is, it’s our job to show them why that’s not a good idea, not to help them achieve this fantasy sooner.”

The criticisms of Abercrombie appear online and in the traditional news media.  As CNN reported:  “No stranger to controversy, U.S. retailer Abercrombie & Fitch has come under fire for offering a push-up bikini top to young girls.  Its “Ashley” bikini — described as “padded” and a “push-up” — was posted on the Abercrombie Kids website earlier this week.  The company declined to comment Saturday but noted it has since updated the description of its bikini online.”  The consistent theme is these messages was that the marketing was age inappropriate and somewhat “creepy.” 

As background information, here are some addition controversies for Abercrombie:

“In 2002, for instance, the trendy retailer caught flak from parents because it was selling thong underwear in children’s sizes with the words “eye candy” and “wink wink” printed on the front.

In 2001, the company’s quarterly catalog created a stir when it ran photographs of models who appeared to be college-age or younger in the nude, kissing and fondling each other.”

The conflict carried over to Abercrombie Kids’ Facebook page as people debated whether or not the company had acted inappropriately.  As you might expect, there were defenders who were fans of Abercrombie.  Their points was if you do not like it, don’t buy it.  Here is a defending comment: 

Minreal Herrera

‘Ok stop really
Dont lik it? Dont buy it!
Dont lik our comments? Dont read them and to renee i think kids shood hav a say, and u cant control ur child forever! Of u want u can but other kids rnt urs so u cant tell us wat to say or do! So rea…lly… STOp!’

Another point that was made was that the smaller sizes might fit the younger demographic but some age appropriate buyers are smaller than normal for their age and want this style. 

The critics did respond:

“to all the people who said if u dont like it dont buy it.. really??? if u think 7 year olds should make them selves look sexually suggestive then u have a scew loose. u know there is that mom out there who has to “be cool” and buy it. kids dont understand the perverts out there. and too many moms are just plain stupid! so just get rid of it!”

Their point is that sexualizing children is wrong and responsible companies should not facilitate that process.  It is not a question of whether to buy it or not but whether or not it is appropriate at all to sell. 

Abercrombie did change after the “outrage” and related media coverage appeared.  Here is their statement:

“We’ve re-categorized the Ashley swimsuit as padded,” according to a statement posted Monday on the Abercrombie Kids Facebook page. “We agree with those who say it is best ‘suited’ for girls age 12 and older.”

The challenge from stakeholders was respect as Abercrombie changed the marketing of the produce to reflect the concern from critics, to a degree.  People may still debate their age choice.

Questions to Consider

1.  To what degree do you think past controversies affected the current situation and why?

2.  Do you agree or disagree with the critics of the marketing?  Why or why not?

3.  Why would this situation qualify as a paracrisis?

4.  What was the danger if Abercrombie choose to defend its actions?  Could they have done this successfully?  Why or why not?

5.  Some people claim all publicity is good publicity.  Do you feel that is the case here?  Why or why not?

6.  How ethical was Abercrombie in this case?  How ethical were their critics?


Importing “Skins” Creates Headaches for MTV

January 22, 2011

“Skins” is a show about teenagers that takes a very frank look at sex and drug use.  It was developed and shown in the UK on the BBC.  In 2011, MTV has created an American version.  It is common practice to adapt UK shows for American television.  “The Office” is recent success of American adaptation.  Some shows work, some fail miserably.  “Skins” is consider a minor hit by drawing over 3 million viewers.  But it is also drawing a lot of negative attention for those organizations associated with it.

Leading the charge against “Skins” is The Parents Television Council (PTC).  The PTC is a conservative organization that promotes family values.  Part of that effort includes warning parents about inappropriate show, pressuring networks to remove the inappropriate shows, and persuading advertisers to stop buy time on inappropriate shows.  Whether or not you agree with their view point, the PTC has well-organized communication plan for creating pressure fueled by the Internet.  Through Internet channels, the PTC can gain signatures for petitions, have people e-mail target networks and advertisers, contact the government, and solicit donations.  They have an excellent model for how public relations can be used to further the goals of activists, especially in the online environment.  It is worth a visit to their web site to see how they use online public relations.

Many people argue that if the PTC does not like a show, then they should not watch the show.  If you review the list of shows the PTC targets, you will probably find a show you like and agree people should just change the channel.  However, the PTC is exercising free speech and have a right to complain about content they do not like.  But that does not mean others have to agree with them or change programming.  “Skins” is pushing the boundaries and the PTC is arguing that it qualifies as child pornography and note it may be the most dangerous show ever. The PTC has requested a Federal investigation into charges of child pornography and exploitation. 

The PTC’s primary targets are advertisers.  They ask people to pressure advertisers to not buy time on inappropriate shows.  The idea is guilt by association.  If they advertisers supports and show that is not family friendly, the advertiser is not family friendly.  If it is difficult to get advertisers for a show, no network will keep running that show.  Television is about money and money comes from advertisers. 

Here is a statement that illustrates the PTC tactic:

“Every single advertiser who sponsored the premiere episode of ‘Skins’ is not only endorsing, but glorifying teen drug and alcohol abuse, not to mention a plethora of baseless sexual content. The following companies and brand names can rest assured that they will be hearing from PTC about their decision to sponsor the program: Schick Hydro, H&R Block, L’Oreal, Subway, Foot Locker, Orbit chewing gum and Extra chewing gum. We sincerely hope these advertisers will agree that the content in ‘Skins’ is harmful to their corporate image,” Winter concluded.

So far, Taco Bell and GM had both stopped advertising on skins. 

Taco Bell said:

A Taco Bell spokesman said Thursday evening, “We advertise on a variety of MTV programs that reach our core demographic of 18 to 34 year olds, which included the premiere episode of Skins. Upon further review, we’ve decided that the show is not a fit for our brand and have moved our advertising to other MTV programming.”

The PTC was very happy with these actions:

The Parents Television Council ™ joined with families and parents to thank Taco Bell for pulling advertisements from MTV’s new show, “Skins.” Following a PTC take action alert asking members to contact Taco Bell about sponsoring the program, the company asserted that the racy content was not in line with its brand.

The PTC also praised General Motors for its swift response after our members contacted GM about two Chevy Volt advertisements which aired during “Skins.”

“PTC applauds Taco Bell for pulling its ad dollars away from the extremely graphic content on MTV’s ‘Skins.’ We express our thanks o n behalf of countless families, especially those who contacted Taco Bell directly with their concerns ,” PTC President Tim Winter said.

“PTC also thanks General Motors for swiftly responding to PTC members’ concerns about Chevy Volt advertisements. GM told PTC that ‘Skins’ was on its ‘do not buy’ list on MTV, and that MTV admitted placing the Chevy commercial on ‘Skins’ in error. GM also stated that MTV had apologized for its error.

“Skins” still has some advertisers.  Viacom, owners of MTV, have asked the show be careful because being associated with child pornography is not what any company wants.

Here is how the creator of the series, Bryan Elsley responded:

Skins is definitely not the most dangerous program ever on television,” Elsley said. “People should just watch the show and see if they feel it’s really as bad as they think. It might be worthwhile reminding people that the first episode of Skins is about a boy who sets out to lose his virginity and realizes later in the episode that he’s not ready.”

H&R Block and Wrigley’s can be added to the list of lost sponsors.  Also ratings for the second episode fell by 50%.

Questions to Consider

1.  How does this case illustrate the power of online public relations/communication?

2.  Is it ethical to use charges of child pornography in this case?  Why or why not?

3.  What else could those associated with “Skins” due to defend the show?

4.  How does the response by Taco Bell serve to validate the efforts of the PTC?

5.  Is this case about free speech or censorship?  Justify your answer.

6.  What is the risk of the PTC effort backfiring by increasing the popularity of “Skins?”


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