CSR consultants would like you to believe that reputational disasters can hit a company's bottom line. If this was true, palm oil giant Golden Agri Resources' balance sheet should have been bleeding. But that is not the case. Golden Agri has reported that its fourth quarter net profits more than doubled to $1.17 billion.
Golden Agri, part of Indonesia's Sinar Mas, has been at the centre of Greenpeace campaigns for allegedly destroying natural forests in Indonesia to pave way for oil palm plantations. Last year, the company actually faced the most intense campaign, and also saw its shabbily designed counter-attack on Greenpeace badly backfired. Golden Agri also continued to lose multinational customers due to accusations of forest destruction.
2010 should have been the company's worst year if reputational disasters had any effect. But actually, last year has turned out to be the best year in the company's history in terms of profits.
One can still be optimistic and say that the company would have made even greater profits if it had a better sustainability reputation. Who knows?
Multinational companies such as Unilever, Kraft, Nestle, Burger King and HSBC have deserted Sinar Mas group companies, under pressure from campaigners. The question then is who is fueling the group's growth, and profits? Well, the company's profits are pouring in from large developing countries, mainly China and India. The company plans to add 1.3 million tonnes crushing capacity in China this year to meet growing demands there.