The best way to change the system is from within. That certainly seems to be the belief of PETA: the animal welfare organisation’s longstanding strategy of shareholder activism has gone into overdrive over the past year, catching the attention of many in the leather industry.

In January, the organisation bought a single share in French luxury fashion house LVMH, giving it a platform upon which to draft shareholder resolutions and put them to vote at annual general meetings. The stock purchase was the second such move in the space of a year, with Prada targeted in April. May saw PETA member Isabel Goetz publicly confront Hermès chief executive Axel Dumas over his company’s use of exotic skins, an episode that, while gracefully handled, caused no small degree of embarrassment.

PETA wants to eradicate the eating, wearing of and experimenting on animals. Ambitious goals, and yet its shareholder activism is based around much more specific, tangible aims. Recent actions have focused upon forcing fashion houses to stop using exotic animal skins by winning around management, shareholders and customers.

PETA has stakes in 57 individual companies and though it’s extremely rare for its resolutions to pass, the influence of the organisation – and others like it – has increased. A study by research group The Conference Board showed that environmental, social and governance issues made up of two fifths of all resolutions in 2013, a 60% jump in the space of a decade, and average support for such proposals doubled over the same period, reaching 21% in 2013.

PETA’s recent stake acquisitions coincided with the release of a video investigation showing horrendous conditions at crocodile farms in Vietnam, where animals were being killed through a cruel process called ‘pithing’ – in which a steel rod is driven through the spinal column to destroy nerve centres in the tail and head – rather than by more humane captive bolt guns. Employees from two farms were caught on video saying that they had supplied skins to Heng Long, a LVMH-owned tannery based in Singapore. LVMH hit back by saying that it ceased all trading with these farms in 2014, though by then the negative publicity had already done considerable damage.

“Through such exposés people can actually start to relate to exotic animals and understand them,” Yvonne Taylor, PETA’s senior manager of corporate projects, tells Leather International. “That just changes their approach. Suddenly, a crocodile handbag goes from being a luxury product that people want to own to being a badge of shame. The same way people feel about the fur trade they are starting to feel about the exotic skins.”

Waste not, want not

Exotics is a very specialised sector within the overall leather industry, thus functioning and producing differently to its cattle counterpart, and certainly not on the same scale. Though it’s not an argument that PETA buys, in a vast majority of cases leather is a genuine by-product of meat production. This makes leather a particularly low-waste business and gives it an ethical edge over exotic skins, where animals are sometimes reared only for their hides. However, given PETA’s stated desire to end the wearing of animals in all its forms, should the leather industry be worried about shareholder activism?

A quick industry straw poll suggests measured caution. While many express concern, and even a degree of admiration for PETA’s ability to generate publicity for its cause, figures such as Dr Kerry Senior, director of the UK Leather Federation, believe that the pressure group’s argument against leather is not sufficiently powerful to persuade customers.

“I don’t see a noticeable impact,” he says. “The luxury end of the leather market is actually doing very well. I would never take PETA lightly: you always have to be aware of what it is doing and be ready to provide factual answers to whatever it is speculating on. But it’s not something that I see as a concern for the broader leather industry, though it does make for a very high-profile story for PETA, which is what it is very good at.”

Others, like Mike Redwood, visiting professor at the University of Northampton and head of advocacy group Leather Naturally, express resignation. He feels that many activist organisations refuse to have frank, factual conversations about leather (which, ironically, is a charge they frequently level at tanners and luxury goods companies). Until terms of engagement are agreed and adhered to, talks are pointless.

“Leather Naturally chooses to engage with bodies with an open mind, with which we can discuss the different scientific aspects, from climate change through to waste management and the value of leather as a sustainable material,” he says. “Sadly, much of the time is spent countering falsehoods about the use of materials such as arsenic in leathermaking, which has not been used since the early part of the 20th century, at which time it was more widely used in cosmetics.

“Using a share certificate to get access to meetings to create publicity via disruption, and to obtain facts to build false arguments, may appear to advance PETA’s cause, but in reality it does not serve society at all well. However, in a democratic world this is a legal tactic, and Leather Naturally is pleased that the companies involved love leather and have shown a dedication to quality, proper sourcing and correct societal approach, and anticipates that they will be well able to rebut any improper attacks.”

Communication problems

The question is how best to engage with these attacks. Most agree that, even though the facts tend to be on the side of leather, the industry has done a poor job of fighting back against activists’ claims.

 While for some this is a result of complacency, others see it largely as a problem of fragmentation, or failing to unite behind a strong message. Senior thinks that a tipping point may have been reached as groups like the Global Leather Coordinating Committee put the issue front and centre. Steve Sothmann, president of the International Council of Hides, Skins and Leather Traders Association (ICHSLTA), believes the industry needs to become more sophisticated in the way it communicates and better at targeting people from outside the industry. While consumer-facing branding and social media campaigns are expensive and resource-intensive, they might be the best means by which to counteract the messages of groups such as PETA and plug the benefits that leather offers.

“I think everyone generally agrees the industry needs to do a better job of responding to these fringe attacks by providing brands, consumers and the marketplace as a whole with more information about how and where their leather is produced,” he says.

“There is quite a bit of misinformation out there about our industry that has gone unchecked. The problem is not necessarily that the industry is too fragmented or complacent, but that it does not have much experience talking directly to these constituencies. The global leather industry is generally very good at talking to itself, but it has not done a great job of taking our message to a broader audience.”

This marketing effort is needed to reverse the increasing popularity of non-leather materials. The steep rise in the price of leather in 2014 and a shift in footwear trends towards trainers have had the kind of impact that PETA could only dream of. However, while activism is a thorn in the industry’s side, it is not keeping tanners and retailers awake at night.