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Published 08 January 2013 11:24, Updated 14 January 2013 07:21
Nathan Tinkler Photo: Louie Douvis
The hoax that fooled the sharemarket and temporarily wiped $67.1 million off BRW Rich Lister Nathan Tinkler’s personal wealth has highlighted the need for companies to prepare crisis plans and promote their environmental credentials.
On Monday a number of news outlets fell for a fake press release purporting to announce ANZ’s withdrawal of support from Whitehaven Coal, largely on corporate sustainability grounds. Both companies moved quickly to correct the record but not before Whitehaven shares temporarily fell nearly 9 per cent, perhaps reflecting wider market jitters about the coal industry.
Andrew Ure, managing director of Ogilvy Earth, a PR agency advising companies on environmental and community issues, says ANZ needs to go on the front foot to protect its reputation as a responsible corporate citizen.
“Five to 10 years ago I don’t think anyone would have taken this seriously – they would have assumed it was a hoax,” Ure says. “The fact that people quite credibly thought that ANZ could overturn the loan on environmental or social reasons is an indication of how far public expectations have moved for finance houses, and companies more broadly, to make economic decisions that incorporate the environment.”
The hoax was perpetrated by anti-coal activist Jonathan Moylan to highlight the link between banking finance and environmental issues, including the land-use debate of mining versus agriculture.
The fake press release, which was dated January 7, 2013, used the ANZ logo and announced the withdrawal of a $1.2 billion loan for Whitehaven Coal to develop the Maules Creek Coal Project near Narrabri in NSW, citing volatility in the global coal market, expected cost blowouts and the bank’s corporate responsibility policy as reasons.
The statement included a fictional quote from the bank’s group head of corporate sustainability, Toby Kent: “We want our customers to be assured that we will not be investing in coal projects that cause significant dislocation of farmers, unacceptable damage to the environment, or social conflict. The decision to withdraw our loan facility has been made after a careful analysis of reputational risks and analysis of the returns on this mine in the current climate of high volatility in the coal export market.”
Several journalists who phoned the media contact numbers at the bottom of the release spoke to Moylan, who reportedly did a convincing impersonation of Kent.
The spoof added that ANZ is currently undertaking a review of coal and gas investments on productive agricultural lands and areas of high biodiversity.
The initial reports sent shares in Whitehaven Coal down by 31¢ or 8.8 per cent, before rallying as news of the hoax started to spread. Trading on the Australian Securities Exchange was halted for over an hour and although the share price had fully recovered by the end of the day, the Australian Securities and Investments Commission is investigating the hoax and Whitehaven is considering legal action.
Despite the sharemarket fallout for Whitehaven Coal, Ure says that from a public relations point of view ANZ was the real target. “It has less effect [for Whitehaven] than for ANZ because it’s a coal company already and people expect them to be doing this but what the hoax has done is successfully drawn the link between finance and the environment and brought that into the public eye,” he says.
ANZ is a signatory to the Equator Principles, a set of voluntary standards to help banks identify and manage the social and environmental risks associated with the direct financing of large infrastructure projects such as dams, mines or pipelines. However, Ure says it is not enough for companies to practise corporate sustainability, they also need to communicate it to the public.
While this hoax was perpetuated through traditional media, other activism takes advantage of social media. Last year environmental groups Greenpeace and The Yes Men created a fake advertising campaign parodying Shell’s push into the Arctic with the slogan “Let’s Go!”, which also invited people to create their own parody ads. The campaign generated 4 million page views and 12,000 user-generated advertisement submissions– a result that Ure points out could never be matched by Shell putting up an “it wasn’t us” website.
In another incident of social media activism last year, Australian activist group GetUp rounded up enough members with Woolworths shares to call an extraordinary general meeting on the issue of poker machines.
“You can’t stop these events, you have to prepare in advance and the way you do that is by communicating about the good you do for the environment and community beforehand, so you build a bank of trust with the public,” Ure says.
The president of the Public Relations Institute of Australia, Terri-Helen Gaynor, says ANZ and Whitehaven Coal reacted well by responding immediately and keeping the statements short and factual.
“ANZ came out quickly and made a fully supportive statement and said right out that this was a hoax and they both kept their statements short and sweet so they didn’t fuel the flame,” Gaynor says. “The worst thing you can do at that point is to try to participate in the wider debate and put meat around the statement.”
However, Gaynor agrees with Ure that in the longer term ANZ needs to think about actively promoting its sustainability credentials.
She says the incident highlights the need for businesses to closely monitor any mention of their company name using online alerts so they can react quickly, as ANZ and Whitehaven did, and to keep crisis management plans up to date.
“Once or twice a year you should look at the issues and crisis plans you have in place and consider what scenarios have come up either for your company or your competitors, or in other industries and ask ‘if that happened to us, what would we have done?’” Gaynor says.
Gaynor also points out that companies can guard against hoaxes to some degree by developing relationships with specific journalists covering the beat.