Direct Threats Against Brands Add New Component in Reputational Risk

- Aadil Mohamed

Direct Threats Against Brands Add New Component in Reputational Risk

Sticks and stones may break my bones, but words will never hurt me. Or...will they?

If you’re a regular reader of this blog, you know from numerous articles that words, or derogatory misinformation, disinformation, and other harmful online content, can most definitely hurt, if not break, your brand.

But have you considered that security risks—from cyberattacks that imperil your business operations to threats of physical violence against your people—can quickly become a high-profile reputational issue for your brand? 

In fact, as we begin 2021, brands are likely to experience a heightened risk of reputational damage linked to social unrest, protests, and associated physical threats. It turns out that flipping the calendar to a new year has done nothing to diminish ideological divisions within society, ethnic and racial tensions, and the disillusionment that drives the risk of more civil unrest and violent extremism.

Brands are increasingly concerned that physical and human capital could become targets of social unrest or defamation from political and social activists tied to environmental, social, governance, and technology (ESGT) risks. Yet, siloed risk responsibilities mean that security threats are often evaluated and managed separately from the risks posed by harmful online content.

The link back to social media in accelerating and amplifying both types of reputational risk is clear.

Coordination between those who pose a security threat to brands is “enabled by uncontrollable social media,” the Cambridge Centre for Risk Studies warned in a stress test scenario. “Social unrest is now a systemic threat with the potential to manifest in large-scale simultaneous occurrences” instigated and organized on social media.

From social justice protests this past summer to the disturbing messages about the events that unfolded at the U.S. Capitol in the past week, we’ve seen how social media posts, hashtags, and retweets can come to life and how quickly things can devolve into violence. Social media can bring thousands of people together in coordinated demonstrations that can spread across the country and around the world, becoming a global source of social upheaval and adding a dangerous new component to reputational risk for multinational brands.

The continuing global pandemic and the enduring issues of social justice and inequality will remain trigger points for unrest and add to the pressure on brands to take a public position and get more engaged on social issues. If they don’t, they could be targeted by hostile online campaigns, boycotts, aggressive demonstrations, or threats of violence for their perceived stance, or lack thereof, on controversial issues.

ACTIVISTS MORE EXPERIENCED AND SOPHISTICATED IN ATTACKING BRANDS

As activists get more experienced and sophisticated about attacking corporations, they are using social media to organize and fan the flames, while turning increasingly to boycotts and vandalism to cause damage to brands.

The political discontent in Hong Kong has included attacks by pro-democracy protesters on brands seen as sympathizers with the Chinese Communist Party in Beijing. Starbucks and McDonald’s have been repeatedly targeted because the owners of their Hong Kong franchises have ties to the Chinese government.

Protesters circulated information—sometimes based on rumors or comments made by executives—on mobile apps and websites that they say document the companies’ ties to China. As that happened online, one Starbucks branch found protesters had smashed glass shelves, while others threw plates and trays on the ground. “The heavens will destroy the Communist Party” was spray-painted on a counter.

In France, U.S. global investment manager BlackRock had its offices vandalized by climate activists who sprayed red paint on the floors and covered the walls with graffiti. BlackRock offices in other cities, including its New York headquarters and London, have also been the site of protests.

In Spain, the Goldman Sachs Madrid offices were nearly breached by anti-eviction activists protesting the firm’s investment in low-income housing. The New York-based investment bank also faced protests accusing the company of supporting disputed Venezuelan President Maduro by purchasing $2.8bn of government bonds in 2017.

In Portland, Oregon, a protester spray-painted “Black Lives Matter” on the side of a Marriott hotel, thought to be where U.S. federal agents were staying during violent social justice protests in the city. The hotel was shut down, and guests were asked to leave after hundreds of protesters demonstrated outside, chanting, “Kick them out, Marriott!"

BRANDS FACE SECURITY AND REPUTATIONAL RISK FROM ONLINE ACTIVISTS

It’s not just perceived stances for or against social justice movements, either. Ongoing pandemic restrictions on brands, the authorizations of COVID-19 vaccines, and the rollout of inoculation programs are already flashpoints for activism against pharmaceutical companies. They, along with research facilities, face security and reputational risks from activists sowing doubt about vaccine development and others who target healthcare for virus containment policies that impose limitations on public gatherings.

Some of the same protesters at anti-lockdown rallies are anti-vaxxers preaching resistance against COVID-19 inoculations, rallying the broad coalition of those opposing vaccinations to further undermine trust in health institutions.

And now the threat has been accelerated online by digital chatter. The myths and falsehoods about the COVID-19 vaccine threaten to limit its effectiveness by building mistrust among social media users. Anonymous instigators have offered up junk science. Online skeptics made bogus accusations that hospitals padded their coronavirus case numbers to generate bonus payments. Influential TV and radio opinion hosts told millions of viewers that physical distancing was a joke. All in an effort to harm not just the reputation of the very pharmaceutical companies that have rolled out vaccines, but to attack its people and its assets. 

BRANDS NEED TO SEE FURTHER, ACT FASTER IN A DYNAMIC RISK ENVIRONMENT

After the social unrest and stay-at-home orders of 2020, the risk of attacks on brands remains ever-present in 2021, lurking just beneath the surface until the next incendiary event, likely to be sparked and spread on social media.

We’re facing another year where consumers will be looking to brands to support social justice, display corporate responsibility, and set the stage for a return to normal. Brands that can negotiate the politically charged culture that has divided the U.S. won’t do it by keeping a low profile.

Your enterprise can succeed by recognizing that social media is at the intersection of the reputational harm posed by both security risks and harmful online content—risks often initiated by the same instigators.

With proactive early-warning risk intelligence, you can stay one step ahead of these instigators by monitoring social media 24/7/365. The advantage of real-time detection of reputational risks and high-priority alerts of incidents whenever they happen means you’ll be ready to avoid an incident or attack that could threaten your brands, your people, or your assets. It could damage your reputation, physically damage your locations, and/or affect operations.

As a protector of the brand, you have to be able to do more than mitigate reputational risk. You have to anticipate it and how what starts online could end up with violence offline. Intelligence—in the form of greater capabilities, refined insight, and decision support—has become increasingly vital.

The brands that manage to survive and thrive will be flexible, adaptable, and ready to protect their reputations from both types of threats. Security, after all, is resiliency; it is hard to have one without the other.

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