BrewDog: Sacrificing S for the sake of E?
Pardon the Interruption
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BrewDog has been lighting the way for the craft beer industry. Launched by a group of former fishermen from a derelict warehouse from very humble beginnings, the firm has risen to be a market leader. The B-corp giant has become world's first carbon negative brewery. It is building a forest in Scotland and is proudly vegan-friendly.
Last week though, the firm was rocked by allegations of bullying from former and current staff members. What responsibility do trustees have to their members when investing in E if it is on the back of S?
A group calling itself ‘Punks with Purpose’ recently wrote an open letter, which you can read here, to the owners of BrewDog and their staff. The group of ex-employees shared their stories of harassment and accusations of "growth at all costs".
"BrewDog was, and is, built on a cult of personality. Since day one, you have sought to exploit publicity, both good and bad," the statement claims.
The craft beer house has been a unicorn in the British food and beverage industry for nearly 14 years now and seems set to grow. Its core of passionate 'punks' buy shares in the firm like tickets to gigs, to live the brand through to the conscious consumer who wants a pleasant alcohol-free beer or feel warm in the knowledge that their purchase of a BrewDog lager has come at a negative carbon impact; and they have been loyal to the firm on its route to domination.
Its BrewDog Lost Forest in Scotland will be bigger than 17 countries across the world, the company claims. You could be forgiven for licking your lips like a cold one from the fridge at the prospect of putting a healthy tick against BrewDog’s ESG credentials.
However, the brewer’s fight for forests and green credentials has come at a hefty price – that of social impact. A culture of fear has spilt out into a PR disaster for the firm.
BrewDog's HR team panicked in the immediate aftermath of the Punks with Purpose open letter. They issued a counter letter to all staff to sign up, which you can see here. The letter essentially mandated all staff sign up to say how good the firm is. Imagine if you disagreed with the firm; would you be brave enough not to sign this open letter? This quick-thinking plan effectively showed the world the fear culture within the organisation and the pressure on staff to conform. Shortly after this second letter started gaining traction, BrewDog's CEO stated that he was not involved, throwing his entire HR team under the bus.
Later on 10th June, CEO James Watt issued his response to the events that unfolded. His words were the right tone and the right message. It is a shame it came after the panic fires had ripped through the organisation. Has he done enough to settle investor nerves?
Later on 10th June, CEO James Watt issued his response to the events that unfolded. His words were the right tone and the right message. It is a shame it came after the panic fires had ripped through the organisation. Has he done enough to settle investor nerves?
Will members start to expect more from their investments?
Tesla is another example of a unicorn in the environmental space, changing consumer behaviours to electric vehicles. A quick search to look at the organisation's culture and the cult-like following of consumers and some investors to Elon Musk leaves few with an impression of a work culture that benefits the employees. Shares are doled out to keep employees glued to their desks with little else forthcoming. Even its E credentials are starting to fade with its love of cryptocurrencies and SpaceX denting its eco badge.
How will your respond to changing member investment appetites? Is there a bias towards delivering on environmental factors over social ones? How can funds cater for both?
