Standard Bank has parted ways with Edelman, the US-headquartered PR firm that provides it with corporate reputation management advisory services.
Now ordinarily the premature ending of a contract between a bank and one of its service providers wouldn’t warrant news coverage. However, the stated reasons for Standard Bank and Edelman’s break-up deserve a little notice.
Officially, Standard Bank and Edelman aren’t saying much. When approached by Business Day both parties offered the same noncommittal, mealy mouthed statement.
“We can confirm that Edelman and Standard Bank Group partnered closely for three years and mutually agreed not to renew our partnership beyond December 2022,” both firms said separately via e-mail. “Due to confidentiality commitments with our clients, we are unable to share additional information.”
While that’s the official party line, Fin24, which broke the story, suggested Standard Bank and Edelman fell out after the US-based PR giant refused to work on the East African Crude Oil Pipeline (EACOP). Standard Bank is an adviser on the controversial 1,443km pipeline, which involves oil groups CNOOC, TotalEnergies and Tullow and will see Uganda’s crude oil transported to a port in Tanzania for export.
While the project has been mired in controversy for some time one could be forgiven for being sceptical of claims that a PR firm would walk away from one of the most lucrative PR retainers in SA over a single project in a small market like Uganda. After all, most PR firms would represent the devil himself if he offered them a decent monthly retainer.
Speaking of the devil, Edelman is known to have done PR work for oil companies Shell and ExxonMobil. So why would it suddenly object to an export-focused oil pipeline in Uganda, a poor country that could do with some extra foreign exchange? Karena Crerar, CEO of Edelman Africa, refused to comment on the firm’s break-up with Standard Bank beyond the carbon copy statement issued by the two firms.
However, it seems Edelman may actually have grown a conscience after all, albeit due to intense pressure from US climate lobbyists. Stephen Horn, the SA country director of Clean Creatives, a US-based organisation that lobbies the PR and advertising industry to become ‘fossil free’, says one shouldn’t underestimate the degree of pressure being exerted on global firms like Edelman to play a more proactive role in combating climate change.
Clean Creatives has got more than 100 creators and climate advocates to lobby Edelman to drop carbon-intensive clients such as Shell and ExxonMobil. That pressure forced Edelman to conduct a 60-day assessment of its client portfolio, which culminates in the firm pledging in January 2022 to walk away from at least 20 clients that don’t meet its climate-action criteria.
Business Day understands that one of the high-risk projects identified during the firm’s climate review process was EACOP, prompting it to inform Standard Bank that it could no longer risk its own reputation by doing work on the controversial project. The result was that Standard Bank promptly fired Edelman, or so Business Day is told.
While that means Edelman might walk away from the EACOP project smelling of climate-friendly roses, the truth is that its decision may have more to do with business acumen than moral rectitude. Standard Bank’s PR contract might be lucrative in the tiny SA market but by global standards it is negligible.
Edelman would therefore have been happy to sacrifice its African business on the climate change altar as long as it helped it retain far more valuable clients in bigger markets. What's more, it can now use its EACOP decision as evidence of its commitment to combating climate change.
In short, it’s good PR for a PR firm that previously lost business from the likes of Nike over climate concern and also took flak from Unilever over similar issues.
But that still leaves Standard Bank juggling a potentially hot climate-change potato in the form of EACOP, a project it refused to rule out funding. The project will be difficult for Standard Bank to walk away from, given that it is one of the biggest lenders in Uganda.
While Standard Bank will no doubt find another firm willing to take on the poisoned PR chalice, the opposition to the EACOP project is likely to intensify. The impact of that is likely to resonate far beyond the bank’s notoriously terse and abrupt PR engagements, especially if other service providers — or more importantly its clients — begin following Edelman’s lead.
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