Overview
Citigroup, the world's largest project finance bank became the target of the Global Finance campaign of launched by the Rainforest Action Group in 2000. Citigroup provided funding for extractive projects such as mining, logging and oil explorations that many a times took place in developing countries, rainforests and other endangered ecosystems. RAN aimed to stop all lenders, primarily Citigroup, from financing such destructive activities in endangered ecosystems.
RAN held protest activities for two years before Citigroup reached a decision after several meetings with RAN.
The Problem
Approaching the problem from Citigroup's perspective, the problem was much bigger than RAN's protest activities. This issue occurred in the 2000-2002 timeframe when Citigroup was most vulnerable due to being implicated in the then ongoing Enron scandal. As Paul Argenti points out in his article Collaborating with Activists: How Starbucks works with NGOs, "NGOs have more powerful tools than ever to threaten corporate reputations". NGOs can target a company and almost always receive positive media attention on a very broad basis. Given the circumstances, a public image of strong corporate social responsibility was Citigroup's main target at this point in time as RAN was bound to use this piece of information to increase pressure on Citigroup to yield to RAN's demands.
The Options
Citigroup has two options in this case:
1) Maintain status quo
If Citigroup maintained status quo, Citigroup would continue financing projects in endangered ecosystems and given the situation outlined above, Citigroup would face increasing scrutiny about its actions. The bank would eventually hurt its public image and the bank (management and ...