MAY

2020VISION

GLOBAL RISK PERCEPTIONS

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Global Allocation of Risk Perception: Sept 2019 to April 2020PrefaceSo, what comes next?

Companies are beginning to ask this question, finding time between managing the daily emergencies to seriously consider the necessary range of scenarios.

Pharmaceutical firms manufacturing vaccines need to anticipate a full spectrum of risks, such as what happens if an early vaccine were to cause severe human side-effects. Plastics manufacturers need to consider a wide spectrum of scenarios – from a return to pre-COVID levels of concern to a new normal where the public’s concern has moved on. Throughout this report, we present the “pre-mortem” as an effective forward-looking tool for systematically considering a full spectrum of risks.

Governments are also considering the question of what comes next. Those regulators and policymakers who are not involved in the immediate COVID response are exploring how their mandates and priorities may change.

In our special issue (pages 8 – 10), we turn our focus on the risk perceptions of EU policymakers, shedding light on how their concerns map across different industry sectors.

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Figure 1. The public is asking “what comes next?”. As concerns about COVID-19 slowly begin to relax, or as the public becomes fatigued, there is bandwidth for concerns to increase around other issues. Companies should be wargaming a full range of scenarios to determine what actions need to be taken to defend their products.

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Measure Behaviors, not AttitudesWhy do we not poll people like many other risk reports do? Because polling asks people what they think they are concerned about.

Problem one: people often do not know what they are concerned about.

Problem two: they are unable to answer why they are concerned about something.

Ultimately, we want to anticipate the public’s behaviors. And so, it only makes sense, to build risk indices based on actions - the comments people post on social media, their mobilization, what they search and what they read. Behaviors drive attitudes, not the other way around. So we measure behaviors.

MethodologyUsing Artificial Intelligence

With over two decades managing product defense campaigns, we understand what drives people to feel outrage, fear, or uncertainty towards technologies.

TACTIX’ Risk Indices are measured using a proprietary sentiment analysis algorithm. We built the algorithm specifically to analyze controversial products and practices.

If you are looking for historical data, weekly breakdowns, deeper analysis, or for another issue to be added to the tracker, reach out to us at paul.hillier@tactix.ca.

Proprietary Risk IndicesSeverity Index: measures the percentage for public conversation that is registering as highly concerned.

Personalization Index: measures the percentage of public conversation that is associating the concern with a family member.

Mobilization Index: measures the percentage of public conversation that is calling for a ban, boycott, or political change.

Nature of Concern: measures the percentage of concern that is concentrated on environmental impacts compared against concern that is concentrated on human health impacts.

Avoiding a Repeat of 1976:Wargaming the Search for a Vaccine

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Concerns around Vaccines

Figure 2. Risk perceptions towards vaccines are at record lows. Never since the onset of the anti-vaxx movement have concerns been less severe, less personal, and less mobilized (three of the proprietary indices we use to track risk perceptions).

At the same time, engagement has never been higher. Global engagement on the topic of vaccines is 15 times what it was in September. That number cannot be understated: in a separate study we ran in September, more than 30 million Americans were found to be discussing the safety of vaccines over the previous year.

The whole world is watching, waiting and hoping for a vaccine. Pharmaceutical manufacturers are dedicating significant resources to find and bring to market drugs which may allow the economy to return. But the current crop of trials may not yield an effective vaccine. Worse still, there is a risk – as occurred in 1976 – that adverse side effects prove more harmful than the disease. While there are many reasons to be hopeful, hope alone is not a business strategy. Companies need to systematically ask, just how wrong could things go, and what would that mean for us?

Wargaming is an analytical technique we use in the military to systematically ask these questions. One of the most useful wargames is the “pre-mortem”. In this exercise, we turn the problem on its head, imagining things have already gone wrong, and ask ourselves an easier question: what happened?

Most teams have experience running post-mortems, hoping that lessons recorded in a powerpoint presentation after the fact can be applied to future projects. A “pre-mortem” is run before, and is designed to anticipate and mitigate risks before they occur.

Pharmaceutical manufacturers are, of course, not alone in needing to anticipate a full range of catastrophic outcomes. How many companies have seriously wargamed the implications of no vaccine being found even in 2021? What of the risk that some governments put blanket restrictions on travel lasting for several years? The lesson we learned these past months is that when asking just how wrong something could go, the answer can be a lot worse than initially thought.

COVID-19: Reset Button or a Steroid for Risk Perception?

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Impacts of COVID-19 on Risk Perception

Reduced Concerns as a result of COVID-19

Figure 3. On average, severity, mobilization, and personalization of these 13 issues are going down. But plastics, biodiversity, and processed foods are notable outliers. All three are being affected by COVID-19 in a different way.

Ultimately, it is not enough to simply track raw numbers. To understand the impacts we are measuring, we need to ask why.

In 1997 there was an “epidemic…injuring and killing in growing numbers.” It wasn’t a virus: it was road rage.

Dan Gardner, in his book RISK, used road rage as an example of public concern that dissipated only when something more captivating came along. In the late 90s, road rage became one of the major concerns gripping the nation. Then, all of a sudden, it was gone. Why? Because the 1998 impeachment hearings of President Clinton – and the media sensation around the story of Monica Lewinsky – captivated public attention long enough to eclipse other concerns.

Which public concerns are COVID-19 eclipsing? Early data suggests that concerns towards plastics are being swept aside – at least temporarily. Even with the Earth Day campaigns, mobilization against plastic pollution has decreased over last month. As people begin to associate plastics as a more personal matter (as we are encouraged to wear it on our face as protection), mobilization is going down. However, this could also be driven by the zero-sum nature of concern. A compelling argument could be made that when concerns towards COVID-19 decrease, risk perception of plastics will rebound.

Which will it be? Plastics manufacturers need to be wargaming both scenarios, as well as a range of other scenarios that may initially sound extreme.

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Taking the Fear out of Pesticide Residues

Nature of Concern

Guest Commentary

Figure 4. Most risk perceptions are primarily driven by either environmental or human health concerns. However, a select few have the potential to generate both types of concern, necessitating that brand managers balance and prioritize both.

Canadians have one of the safest food supplies in the world. That’s a fact that’s backed up by data as well as by our everyday experiences. It is exceedingly rare that we get sick from the food we buy at the grocery store. And even amidst the current global health crisis, the safety of our Canadian food supply remains.

Yet despite all this, some people are concerned about pesticide residues on their food. Parents struggle with decisions about whether or not they should be feeding their families organically grown fruits and vegetables to avoid pesticide residues. Again, the science here is clear and Health Canada unequivocally states that there is no health risk from eating conventionally grown foods because of pesticide residues.

But food is a motherhood issue and people often make decisions about what they buy and eat based on emotion. Fortunately, the tide is turning and both the media and public are paying less attention to alarmist reports like the Dirty Dozen and focusing more on the importance of eating more fruits and vegetables no matter how they are grown.

While the science behind pesticides is critical, we need to focus on telling people stories and talk about benefits. We need to give people the confidence to make decisions about what foods to buy based on meaningful information and not fear.

Pierre Petelle, President and CEO, CropLife Canada

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Percentage of the March Conversation:Severity vs Personalization

Percentage of Monthly Conversationwith SEVERE concern

Figures 5 and 6. Even as the severity of risk perceptions towards PFAS decreased from March to April, PFAS remains an outlier, well above all others in its overall level of severe concern.

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Special Issue:Risk Perceptions of Brussels Policymakers

How to Segment Policymakers and Respect GDPR

Risk perceptions in one region can quickly spread to others. Time and again we see boycotts and bans in one political geography migrate to others, which is why we track global risk perceptions.

However, the regulatory decisions that drive business risks are made in localized regions. And so, we also track risk perceptions at the regional, national, and subnational levels.

In this issue we take a deep dive into what the data reveals European Union policymakers’ risk perceptions to be.

Comparing twelve industry sectors, we ask two questions:

• How many policymakers are talking about that sector on socialmedia?

• What percentage of the policymakers who are engaged areconcerned?

But then we went one step further, analyzing not only how policymakers thought about each industry sector, but how they thought about each sector in the context of the EU Green Deal.

Some sectors register only moderate levels of concern but astronomical levels of engagement. In contrast, other sectors are being discussed publicly by only a few policymakers, but a very high percentage of those who are engaged are concerned. For those managing brands, either one of these is a potential concern.

As with all of our data analysis, respecting GDPR is our top priority. At no time do we collect or store personally identifiable information. This analysis was conducted using public domain social media content, aggregated without any identifiers as to its source.

In order to estimate policymakers’ risk perceptions, we built a sample of 5,194 people. Like a public opinion poll, this sample was extrapolated to the broader population.

Not all 5,194 people in this sample would be EU policymakers. However, by using a specific set of demographic and geographic criteria, our segmentation ensured that the vast majority in the sample would be EU policymakers.

The reader should be cautioned to understand these as relative numbers, providing a benchmark between industries.

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Special Issue: Risk Perceptions of Brussels Policymakers Across Sectors

Figure 7. For European companies, the risk perceptions of these policymakers have immediate, material impacts on business risks and regulatory prospects. For global companies, Europe’s role as the guardians of the precautionary principle give their risk perceptions global importance.

Animal Health Products

ChemicalsConsumer Cleaning Products

Cosmetics

Fertilizers

Food ProcessorsNon Ferrous Metals

Paint & Coatings

Pesticides

PharmaceuticalPlastics

Titanium Dioxide

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Special Issue: Policymakers’ Risk Perceptions in the Context of the EU Green Deal

Any industry sector that is found to be an opponent of the EU Green Deal risks extensive regulatory difficulty. As such, we are using our AI tools to help groups test messages, modeling what will move the needle on helping EU policymakers see a given industry as part of the solution rather than part of the problem.

Animal Health Products

ChemicalsConsumer Cleaning Products

Cosmetics

Fertilizers

Food ProcessorsNon Ferrous Metals

Paint & Coatings

Pesticides

PharmaceuticalPlastics

Titanium Dioxide

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Global Risk Communications