That the network of trade associations and advocacy groups blocking meaningful action on climate change was bankrolled by fossil fuel interests comes not as a big surprise.
But the recent New York Times exposé of communications consulting firm, FTI Consulting still serves as a lesson in misinformation that is touching the world of ESG and impact investing.
Here’s the story in a nutshell: The fossil fuel lobby, through a patchwork of ‘astroturf’ organizations, has spread disinformation aimed at casting the fossil fuel industry in a more positive light and/or criticizing the renewable energy industry. Astroturfing, for the uninitiated, is the practice of making ideas or projects seem like they have grassroots support when they are actually funded by corporate interests. (John Oliver’s 2018 breakdown of astroturfing is worth a watch.)
Fossil fuel companies have waged disinformation campaigns for decades. These campaigns have been working, at least in the U.S. where oil and gas companies continue to wield massive political power.
It is FTI’s role in these campaigns that is prompting an increased focus on the sources of the misinformation that is blocking progress on critical environmental, social and governance matters. The article has prompted major ESG organizations, including CDP and MSCI, to terminate their relationships with the firm, according to the Financial Times. FTI, based in Washington, DC, provides business advisory and communications services to global companies, from airlines to financial firms.
As a career communications professional myself, it’s disturbing that a communications firm that claims to be “dedicated to helping organizations manage change, mitigate risk and resolve disputes” would instead obscure the truth and subvert climate action.
The episode underscores the need for greater transparency in the sometimes-murky world of strategic communications, and the need for PR professionals to adopt higher standards that emphasize purpose and integrity over profits and misinformation.
FTI Consulting is one of the organizations at the center of this patchwork, helping fossil fuel companies build credibility through what is presented as independent third-party opinions but is in reality paid for by oil and gas interests.
For example, an FTI employee reportedly created a fake Facebook profile—“an imaginary, middle-aged Texas woman with a dog”—to keep an eye on environmental activists to better inform a counter-communications strategy.
Another group of FTI employees worked as representatives of “Texans for Natural Gas,” an organization that says it represents “citizens and officeholders, business owners and students” yet is funded by oil and gas companies. In 2018 the organization published a study that significantly underrepresented the amount of methane emissions generated by natural gas extraction in Texas.
FTI employed similar astroturf tactics to shield fossil fuel companies from shareholder proposals calling for more climate disclosure and action.
That was done through the Main Street Investors Coalition (MSIC), an organization ostensibly created to protect “Main Street” investors by trying to get politics out of pension funds. MSIC was backed by the National Association of Manufacturers (NAM), the corporate lobby that includes Exxon, Chevron and other fossil fuel companies among its members.
MSIC was later shut down following an embarrassing incident in which it was caught sending fake letters from “ordinary Americans” to the SEC in support of a proxy rule that would make it harder for shareholders to submit ESG-focused resolutions. (Here’s a good synopsis of MSIC’s efforts.)
A version of the controversial rule was approved by the S.E.C. in November.
The New York Times also uncovered that FTI worked with NAM to produce a study “arguing that activist shareholders tend not to help shareholder value.” This is clearly not just a coincidence, but rather part of an intentional effort orchestrated by the fossil fuel industry and executed by FTI Consulting and other organizations for whom truth, accuracy and transparency are inconveniences.
I know the perception that many people have about PR or communications is that we’re all “spin doctors.” There’s a certain amount of truth to it, but not in the way many would think. Communications is simply the art of making information more accessible or actionable. For example, explaining impact investing in a way that would motivate investors to change how they allocate capital.
Communications can and should be an important part of driving systems change. But we must also fight back against all forms of astroturfing and misinformation. Here are a few thoughts to help get the conversation started:
- Improved due diligence of vendors and associations. Every major organization relies on a network of third-party vendors and trade associations to help their business run more smoothly. But part of being a responsible corporate citizen means understanding the full picture of an organization’s impact on stakeholders, including the impact of their supply chain. Companies must be more diligent in choosing everything from their PR firm to their IT software provider to make sure they are not contributing to any unintended impacts.
The same standard of diligence should be applied to trade groups and industry associations, which may be promoting causes or policies that are directly at odds with an organization’s stated ESG goals or practices. Asking any potential vendors or associations tough questions about their ESG practices is usually a good start.
- Higher standards for communications professionals. Communications professions have codes of ethics about what is considered permissible behavior (see PRSA, for example). While there will always be bad apples, it’s time to do some self-reflection and reevaluate whether these standards need to be updated to better account for whether professionals are contributing to social or environmental problems, or helping to solve these problems. Such self-regulatory codes leave huge room for a gray area that many PR firms are more than happy to operate in.
Importantly, the standard-setters, and the organizations professing to align themselves with these standards, should introduce accountability mechanisms to ensure there are repercussions for violations. In the case of FTI Consulting, an industry-wide boycott feels like an appropriate response.
- Investigate and root out all forms of astroturfing. Lobbying groups have shown that they will go to whatever lengths are necessary to protect the interests of their members, including funding astroturfing organizations to spread misinformation and try to stir nonsensical debates. These astroturfing efforts are more rampant than ever in today’s era of social media and dark money, and they are a predictable response to the growing influence of the ESG and sustainability movements. Investigative journalism like that of the New York Times plays an important role in calling out these efforts, but they can’t do it all alone.
Resources like SourceWatch.org and PRWatch.org, which helps track corporations and PR spin. Publications like The Intercept, The Guardian and ImpactAlpha also do a good job of spotlighting corporate wrongdoing. Within the ESG space, leaders including Nell Minow of ValueEdge Advisors (who was tracked by FTI’s fake Facebook account), Jon Hale of Morningstar and the team at As You Sow are experts at pointing out the flaws in the strawman arguments often used by astroturfers. Ultimately, everyone with a shared interest in protecting and preserving our society must be more willing to speak out and to support the organizations that are on the frontlines of truth.
- Executive action on the misinformation crisis. It’s clear that America, and likely most of the rest of the world, is in the throes of a misinformation crisis. We can’t just expect the truth and facts to eventually win out—we need government leadership and a better system for ensuring accuracy and accountability. There must be better ways of regulating and managing misinformation, and a way to hold companies to account that aren’t doing enough to stem the spread of misinformation (like Facebook and Twitter, which were once again hauled before Congress last week). There is plenty that the incoming Biden Administration could and should explore to make it more difficult for misinformation to take root, such as requiring advocacy and lobbying groups to disclose their sources of funding.
This is not a fight that can be won overnight. But it’s a fight that we can’t shy away from if we want to see progress on the issues critical to ensuring a sustainable and inclusive future.
Dmitriy Ioselevich is the CEO and founder of 17 Communications, a mission-driven marketing and communications firm specializing in the ESG and impact investing space. Learn more at www.17c.org.