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The wrong kind of sponsorship

At one time, investment in a company was simply a financial transaction, made in the expectation of a better return than from a bank deposit account. More recently, we have seen the rise in the activist private investor, whose objective is to influence the future direction of the company, with returns being secondary in many cases. Company policies are also important for some institutional investors, although they also have an obligation to invest the funds they control wisely (see The power of prayer, for example).

This has led to ‘ethical’ funds divesting from the tobacco and arms industries, for example. Now, though, coal and oil companies are increasingly the focus of this attention, with activists holding them at least partly responsible for the present level of carbon dioxide emissions, projected to raise average temperatures to a dangerous degree according to the International Panel on Climate Change.

But campaigners, ever resourceful, are now increasing their pressure on the energy sector by demanding that arts organisations reject corporate sponsorship from sources they disapprove of, most notably oil companies. In the UK, this puts the focus very firmly on BP, the biggest such donor nationally. There is an interesting interview on this issue with Peter Mather, the company’s head of UK operations, in the Times: BP v the luvvies: the battle over Britain’s biggest corporate sponsor.

This is a very different battleground. In shareholders’ meetings, the aim is usually to force some accounting for the projected cost of damage caused by burning oil: internalising the externalities, as economists like to put it. In the case of sponsorship, the goal is to take away the positive PR and advertising of the brand that comes from association with a major museum or art gallery.

Perhaps surprisingly, the amount of corporate sponsorship is a relative drop in the ocean for major institutions. In a report in the Guardian last year (The sponsorship files: who funds our biggest art institutions) we see that the British Museum received £3 million from business, compared to nearly £44 million of public subsidy and over £54 million from fundraising. The only one of the ten major organisations contacted to get more was the Science Museum, which received £4 million in sponsorship and just under £40 million from government funds.

This amounts to 5% of the overall Science Museum budget but only 2% of total British Museum income. These institutions are clearly not dependent on the generosity of businesses, but these sums still enable them to stage exhibitions that might otherwise not be seen. For that, of course, the sponsors get to have their logo displayed quite prominently, although this is probably hardly noticed by many who attend the exhibitions.

For relatively modest sums (although large in terms of what businesses can realistically allocate from profit streams) companies are able to promote their societal engagement credentials. Other sectors are similarly engaged. Hyundai, for example, started an 11-year sponsorship of the Turbine Hall at the Tate Modern last year, and Unilever played a similar role prior to that.

The point is that both partners find such sponsorship useful but, given the level of fundraising that goes on and the willingness of wealthy individuals and foundations to foster the arts, corporate sponsorship is a nice additional source of money rather than being absolutely essential. If association with a particular brand proves to be bad publicity, then a museum or gallery would be more than happy to seek alternatives. This is what the current activists are trying to exploit.

The analogy some would draw is with tobacco sponsorship for a range of high-profile sports, particularly Formula 1 racing. Once ubiquitous, this has for some time been a thing of the past. In this case, it was government regulation that brought such largesse to an end. It is far-fetched to think that this could ever be the case for oil companies, but that would certainly be an end-point campaigners would be delighted to see.

We make moral judgements all the time. In the case of tobacco, the clear evidence of harm resulted in a reversal of attitudes in barely more than a generation. In the lifetime of many readers, we have moved from an assumption that smoking was permitted everywhere unless specifically prohibited to one where it is largely socially unacceptable and allowed in a very limited number of places.

Activists would like to see fossil fuels similarly categorised. James Hansen has referred to trains taking coal to power stations as ‘trains of death’ while others of like mind have called for prosecution of ‘climate criminals’. Currently, this is very much a minority view, but will it always be? Removing oil company logos from association with popular culture would be a small step in that direction and it’s a chink in the armour that some are only too happy to exploit.

An objective assessment by anyone with an open mind would surely come to the conclusion that the success of such campaigning would set a dangerous precedent. Fossil fuels have brought enormous benefits to society and literally fuelled our path to prosperity. One of their main drawbacks has been the potential for air pollution. China and India are currently suffering badly from this, while the UK and other European countries have mandated measures that have seen air quality improve enormously. In urban areas, things are still not perfect, but good progress continues to be made. The positives are much greater than the negatives, and the jury is still out on the real degree of global warming that may result.

In the meantime, there is no realistic alternative to the use of oil for road transport and gas and coal as major sources of reliable energy. This will undoubtedly change, and possibly quite rapidly, but change will occur because the right technology has been developed and accepted by society, rather than because a minority of activists have imposed their will.

In this context, arts sponsorship may seem trivial, but it’s important that institutions are allowed to make their own choices rather than be bullied into different ones.