Demand for mine waste dump records underscores growing influence of "private regulation" on business
InfluenceChronicles.com -- Global companies are dealing with increasing efforts toward s0-called private regulation -- a controversial but impactful activist strategy that's here to stay because it's working.
Thanks to internet-fueled social media and always-on instant information -- or propaganda -- many non-governmental organizations (NGOs) and pressure groups have the same worldwide reach as multinational corporations.
Combined with society's heightening expectations of corporate social responsibility, this broad ability to connect with stakeholders and influencers has promoted an environment where some pressure groups have the power to impose de facto regulation on companies and industries absent government laws, regulations or court orders.
A recent example: Investor demands that mining companies disclose the safety records of their waste dumps, which often include toxic elements. The movement followed the collapse of a dam in Brazil that killed some 300 people.
Almost 100 investors controlling $10 trillion in assets to more than 600 mining companies --including the world’s largest operators like Anglo American and BHP Group -- sent each a letter complaining that current waste dump disclosures are inadequate, and announced plans to create a global database that tracks each company. Any operation that fails to comply with their higher standards, the letter said, risks losing its investment.
The investors group includes top-tier entities like The Church of England Pension Board and Sweden’s public pension fund.
This elevated form of investor activism has potential to impact any company with exposure to social, environmental and safety issues, which in turn could influence governments to catch up or wrest back some control back.
In any case it's an arena with many new, multifaceted controversies to come.
-- Paul Jacobson