Assessing, Managing and Communicating Risk (1995)
Charting the future of public relations
Holmes Report

Assessing, Managing and Communicating Risk (1995)

From computer keyboards to killer carpets, there are bizarre and unsuspected dangers lurking in even the most mundane household products, it would appear.

Paul Holmes

by Paul A. Holmes
From computer keyboards to killer carpets, there are bizarre and unsuspected dangers lurking in even the most mundane household products, it would appear. Few companies today can avoid the subject of risk: how to define it, how to manage it, and how to communicate it. Regulatory relief, in the form of more demanding cost-benefit analysis for new protective measures, may be just around the corner, but it’s unlikely to put the issue to rest.
One hundred years ago, the life expectancy of the average American was less than 35 years. By 1950, it had risen to 68 years. Today, it’s close to 80 years. Infant mortality has been cut in half over the past quarter century. Moreover, longevity has been increasing most rapidly in the most heavily industrialized nations. Statistically speaking, the world has never been safer.
Perceptually, however, the world is an increasingly dangerous place. The most mundane household products are suddenly being tagged as killers. There’s asbestos in the walls and toxic chemicals in the carpeting. Power lines cause leukemia and cellular telephones give people brain cancer. Second-hand smokes clogs the lungs and computer keyboards can leave users crippled.
Scientists at the University of Pittsburgh have claimed that showers can be bad for your health, with toxic chemicals in the water reaching levels of exposure 100 times greater than those normally encountered. A study from Loughborough University in England says snoring can cause brain damage. And two researchers at the University of Louisville say that 13% of all coins and 42% of paper money carries infectious organisms.
Bombarded with the statistics about these lurking dangers, often presented context-free by a media that thrives on the shocking, 78% of Americans believe they are subjected to more risk today than their parents were 20 years ago. Only six per cent feel risk has been reduced.
This yawning chasm between perception and reality means that assessing, managing and communicating these risks is one of the most pressing challenges facing business today. It is challenge further complicated by an environment in which everyone seems to have a different definition of what is and is not acceptable. The standards by which risk is judged appear to differ depending on who is doing the assessing - the media has one standard, the courts another, regulators another, corporations another and there appears to be some confusion about which standard the public accepts - and even what is being assessed.
It is by now well-established that perceptions of risk have little to do with the actual hazard involved in a particular activity. If they were, the media would be filled with stories about the dangers of traveling by car or ultraviolet rays from the sun or having a staircase in your home. In the absence of any real perspective, regulators are making decisions that may cost millions of dollars, and perhaps even lives; the public is being scared away from products that may be wholly innocuous, and perhaps even beneficial.
“The failure to communicate about comparative risk is creating a phobic society and institutionalizing the illusion that a world of zero risks is possible,” wrote Kenneth Millian, vp of environmental affairs at W.R. Grace., four years ago. “Legislators and regulators, backed into a corner - who can be for risk? - are railroaded into passing and implementing laws that authorize billions of dollars for attempts to eliminate extraordinarily small risks.
“The pity is that the resources necessary to combat real risks are wasted. We spend billions of dollars to rip out asbestos - which may create a dangerous situation where none previously existed - when billions are needed to find a cure for cancer, to fight AIDS, to stop the flow of illegal drugs. We must encourage the media to promote reality rather than phobia.”
It is equally apparent that credibility is the single largest issue, that the public is struggling to find a source of risk information it can really trust to provide unbiased risk information. Business is regarded with skepticism, its critics pointing to a history of self-interested lobbying, manipulation of data and downright mendacity. Scientists generally do not make excellent communicators, particularly in a country which wears its scientific illiteracy with perverse pride. Public trust in government is at an all time low. And even the media and the consumer activist movement, having cried wolf repeatedly over the past few years, are now losing their credibility.
There are indications, however, that the tide is turning. Michael Kehs, executive vp and head of the environmental practice at the international public relations consulting firm Burson-Marsteller, observes that the new Republican Congress has “made people feel free to discuss in public the kinds of issues they have been discussing around the water cooler for years.” One of those issues is a change in the way government assesses and regulates risk.
The eighth of the ten points in the GOP’s Contract with America calls for the introduction of a “job creation and wage enhancement act” that would force regulators to conduct a thorough cost-benefit analysis of current and new regulations to establish whether environmental, health and safety laws actually save enough lives to be worthwhile.
Of course, regulatory reform will not end the debate about how much risk is acceptable. Indeed, passing legislation that will remove some environmental protections will require an intensive public education campaign and continued communication. And even if such legislation does pass, companies can expect to encounter concern at the community level, and demands that any potentially hazardous activity be conducted only with the informed consent of those who might be affected.
Mary Woodell, formerly a consultant with Arthur D. Little and now president of her own controversy management and risk communications firm in Washington, D.C., tracks the evolution of the public’s involvement in corporate decisions: “From ‘the public be damned,’ once the watchword of American industry, we have progressed to acknowledgment of ‘the public’s need to know.’ This grudging acknowledgement has in turn given way to ‘the public’s right to know.’ Now a third generation is emerging: the public’s right to intervene.”
Whatever happens in the 104th Congress, the public will not easily surrender that right.
Nevertheless, regulatory relief is high on the agenda for business lobbyists in Washington, and it is likely that changes will be made in the way the process works, despite the concerted opposition of the environmental activist community and the concerns of the White House.
A draft of the Risk Communications Act of 1995 began circulating last year, including the following provisions: a risk assessment must be performed for each major rule relating to health, safety or the environment; a rule is deemed major if it affects more than 100 people or compliance requires any person to spend more than $1 million; risk assessments must consider and discuss both negative and positive laboratory or epidemiological data; flaws in design, or implausible assumptions, must be highlighted; the risk must be put in context with comparisons to other known risks; an independent peer review panel must consider each risk assessment and cost-benefit analysis; and no final rule can be issued if the panel disputes the data or methods used.
Says Marc Scheineson, a senior vice president with the Washington, D.C., government affairs firm of Bailey & Robinson, which has been lobbying for regulatory reform: “This bill exposes all assumptions and methodologies to the light of day. It requires explanation by scientists of the choices made to improve the understanding of Congress. It invites debate. It requires peer review and public explanation.”
Earnest Davenport, chairman and ceo of Eastman Chemical Co. and chairman of the Chemical Manufacturers’ Association, calls on government to “balance the interests of its various stakeholders” when considering new regulation, and adds: “In the face of limited resources, the propensity to regulate under our current system has become so great that it consumes more value than it creates. If we continue using our current process of managing risk where good science is too often contaminated by politics, where risk prioritization is conducted without conviction, where no provisions exist for weighing the costs against the benefits, and where peer review is just another insider’s game, then we are being irresponsible environmental stewards.”
Davenport, like most corporate executives lobbying for change, has learned from business’s past mistakes and appears to understand that many people assume a crass, profits-at-any-expense motivation for industry’s promotion of this issue. He strives to reassure people that he is seeking not deregulation, but regulatory reform. This means a process in which scientific risk analysis becomes the centerpiece of any regulatory initiative.
Not everyone is enthusiastic about the bill’s proposals, however. U.S. EPA administrator Carol Browner and even a key Republican committee chair (Sen. John Chaffee, whose Environment and Public Works Committee must approve the statute before the Senate can vote on it) have suggested that the bill will increase red tape and make the regulatory process even more adversarial by opening up new avenues for legal challenges to regulatory proposals.
Consumer groups, too, have been vocal in their opposition. The Natural Resources Defense Council, for example, says the bill would “increase red tape, increase taxpayer burden, increase opportunities for frivolous lawsuits and radically decrease the effectiveness of existing environmental safeguards.” Others suggest that risk analysis remains an inexact science, and that in matters of public health and safety it is important to err on the side of caution.
One example of how the risk analysis process works, and how inexact the science often is, involves the battle during the Bush administration over regulations that the Occupational Safety and Health Administration proposed to reduce cadmium dust and fumes in factories. OSHA’s studies and the conclusion that they would save 14 lives each year were assailed by both Vice President Dan Quayle and business interests on one side, and environmental and public safety activists on the other.
Everyone agrees that at high doses, cadmium, which is used to coat metals and make batteries and pigments, can damage kidneys and possibly cause lung cancer. But at lower levels, there is considerable debate over the danger.
OSHA first suggested that current guidelines concerning cadmium exposure might be too high in early 1988, after reviewing a petition from the consumer group Public Interest. The administration relied on two studies: one, a German study conducted in 1983, reported that as many as 71% of rats developed lung cancer after breathing air with a cadmium content similar to that found in U.S. factories; the other, published in 1985, showed that workers in a Denver cadmium factory were more likely to get lung cancer than the general public, although rates were nowhere near 71% higher.
However, other studies have shown that mice and hamsters that breathe high levels of cadmium don’t get lung cancer, while the Denver study also showed that workers exposed to lower levels of cadmium (lower than had previously been permitted, but higher than OSHA’s proposed new rules would allow) actually had lower levels of lung cancer than the general population.
The White House agency that reviews regulatory proposals, the Office of Information and Regulatory Affairs assailed OSHA’s proposed changes, claiming the agency had manipulated the statistics to exaggerate the risks. OSHA had used the rate study as its starting point, running the data from that study through five statistical models, and then choosing the model that showed the second-highest cancer risk as the basis for its proposals. Since the five models produced answers that varied by a factor of more than 100, OIRA - and the cadmium industry - felt the risk was being sensationalized.
On the other side of the issue, however, were environmental activists who adhere to the dogma that there is no such thing as a safe level of any carcinogen, and who find the fact that risk management appears to balance human lives against corporate profits offensive.
“Historically, Americans have been unanimous in their contempt for those who kill for profit,” says Carl Pope, in a recent issue of Sierra. “Recently, this moral consensus has started to erode. Somehow, the national dialogue has shifted from preventing killing to preventing ‘excess’ killing.
“On the surface, the idea has great appeal. It suggests that we concentrate our limited financial resources on combating the greatest risks; that we let science and economics set the precise level at which the cost of regulating a chemical exceeds its benefits, and allow the release of chemicals below that level into the environment. It’s an attractive idea, but a very dangerous one.”
Unfortunately, the issue is not as black and white as activists such as Pope would have people believe. While there is a financial component to the equation, the potential loss of human life on one side of the ledger is counterbalanced not only by corporate profits, but also by increased employment, by the production of goods and services that may have societal benefits, by the expansion of the economy and by increases in the standard of living. These benefits may themselves have a life-enhancing and perhaps even life-saving effect.
Proponents of risk analysis cite research by the late Aaron Wildavsky, a political theorist at the University of California at Berkeley, who has suggested that government can kill by being over-cautious. His notion was that regulation can maim or kill by slowing economic growth, which in turn depresses the standard of living and the health of the population. Economists have even created models that purport to show that one person will die for every $1.9 million to $7.5 million in regulatory costs.
(This model, too, has been criticized for oversimplifying the issue. After all, the money spent on meeting regulatory requirements is not taken out of the economy. Indeed, the environmental protection industry has created thousands of jobs over the past few years and is one of the more lucrative sectors of the overall economy.)
Pope is not convinced: “No one suggests allowing murder if it is sufficiently lucrative, but allowing a chemical company to poison its workers or neighbors because it can make a lot of money is, to some, morally defensible.”
Risk reduction regulations do vary widely in their cost, however. Some, such as childhood immunization programs, actually save money, since prevention of disease is less expensive that treatment. At the other extreme, strict controls on benzene emissions by tire makers have been estimated to cost $340 billion per life saved. At the very least, the deregulatory lobby contends, there are ways in which a sum of that magnitude could be invested to save many more lives.
Another oft-cited example of how ill-conceived regulations can lead to the misallocation of valuable funds is in the war on asbestos. Since the ‘50s, when physicians learned that workers in asbestos-related industries experienced lung cancer rates far higher than those of the general population, asbestos has been public enemy number one. Even though the workers who contracted asbestosis and other lung ailments had suffered prolonged exposure and inhaled large volumes of asbestos dust, and even though there was little or no evidence to suggest that asbestos used in walls, floors and ceiling tiles posed any immediate danger, the EPA published a guidance book that avoided the issue of what levels of asbestos were safe and instead focused on searching out and removing asbestos-containing materials.
Removal, according the to FDA Blue Book, issued in 1983, was “always appropriate, never inappropriate.” That finding was based on research that was, EPA officials admit, incomplete. It remained the ‘bible’ on the subject for school administrators, however, long after further research indicated that the levels of asbestos in buildings with even flaking insulation could be as low as in the air outdoors, where asbestos comes from a myriad of sources.
In New York City last year, schools were closed for two weeks and more than $80 million was spent on inspections and removal. In Oakland County, Michigan, the cost of tearing out asbestos fixtures was close to $100 million. Nationwide, the cost of removing asbestos is estimated at $10 billion, much of it spent by local governments strapped for cash and school districts unable to buy new books. And the irony is that tearing out old asbestos fittings probably creates more health risks than it alleviates, since workers are exposed to higher levels than the children would ever be.
In many respects, asbestos is typical of the kind of things that create the highest levels of concern among the public. It is man-made, it is invisible, it is imposed upon people without their consent, its dangers are more readily apparent than its benefits. And it has been hyped by the usual alliance of environmental activists, plaintiffs’ lawyers and sensation-hungry journalists. Industry claims that it is this triumvirate that is responsible for the distorted picture most people have of the greatest threats to their well-being
Says Peter Sandman, an expert in risk communication at Rutgers University: “If you make a list of environmental health risks in order of how many people they kill each year, and then list them again in order of how alarming they are to the general public, the two lists will be very different. Risk managers often deduce from this that the public perception of risk is ignorant or irrational, but a better way to conceptualize the problem is that the public defines risk more broadly than the risk assessment profession. Call the death rate ‘hazard’; call everything else that the public considers part of risk ‘outrage.’”
Thus risk, in Sandman’s by now well known equation, equals hazard plus outrage.
Sandman also provides an illustration of the way in which risk perception impacts public reaction. He compares the experiences of a first-time skier who has chosen voluntarily to accept the risk inherent in the activity and an individual kidnapped from his home, driven to the top of a mountain, strapped to a pair of skis and pushed down the slope. The second person is at approximately the same risk of injury as the first, yet his reaction to the risk will almost certainly be more fearful and more angry. The objective facts about the degree of risk are not terribly important considerations to the second skier.
“People behave in response to a perceived risk exactly as they do when confronted with a real one,” says consultant Mary Woodell. “Concerns that may be scientifically invalid are no less likely to affect your company’s business. They cannot be ignored. They must be addressed with information. People have a right not merely to express their concerns, but to receive a meaningful response to them. Similarly, whether media coverage is accurate or sensationalized, the news media should be educated, not ignored.”
There are other unscientific factors that influence the way people think about risk. For example, most people are considerably less comfortable with man-made risks than they are with “natural” risks. Says Bruce Ames, a biochemist at the University of California Berekely: “99.99% of the pesticides we consume are naturally present in plants to ward off insects and other predators.” Yet despite the clamor from the environmental movement regarding man-made pesticides, no one is campaigning to remove natural pesticides from the foods we grow.
(In fact, Ames argues that on balance pesticides may actually help prevent cancer, since they lower the cost and increase the yield of fruits and vegetables that contribute to a healthier diet.)
“People are increasingly reluctant to assume involuntary risk, risk over which they have no control, and in which they have exercised no choice” says Woodell. “Consider, for example, trends in tobacco use: once passive smoking became a public health concern, legal restrictions and social pressures increased dramatically. So long as the risk was restricted to the person choosing to smoke, smoking was far less objectionable; once other people’s health is involved, they are inclined to take fast action to restrict the practice.”
Similarly, perceived risks arising from industrial operations are involuntary in the sense that people who may be exposed to do not control the processes that generate them.
Despite the widespread concern about industrial chemicals, the most widely accepted statistics on the causes of cancer indicate that industrial chemicals in the workplace, food, medicines and environment account for only five to eight per cent of all cancer deaths. The research, by British cancer experts Sir Richard Doll and Richard Peto, originally published in the Journal of the National Cancer Institute, suggests that lifestyle choices such as tobacco, alcohol, diet, reproductive behavior and exposure to sunlight are between them responsible for 78% of all cancer cases. Food additives were held responsible for fewer than one per cent of cancer cases; pollution for about two per cent.
Yet another dimension of risk perception has to do with perceived benefit.
“Pesticides and food additives can provide many benefits, not only to food producers but also to consumers,” says Joseph Roddicks, counsel in health and environmental science at Environ Corporation, in his book Calculated Risks. “But most people are not very aware of those benefits, or at least do not personalize them to a high degree, and this no doubt contributes to their sense of outrage when they hear about new health risks from these sources.
“Some people take very high risks, whether on the job, as part of their recreational activities or resulting from their personal habits, because they feel they are getting something out of it for themselves; but they become upset when asked to tolerate very much smaller risks from activities or exposures that they feel are without significant personal benefits. Even if they do derive some personal benefit, unless this is known to them or internalized in some way, people will not perceive it, and perception is what is important here.”
The media clearly understands how the public’s perception of risk works, and focuses its attention accordingly.
“A direct comparison between hazards as topics of news stories and hazards as causes of death shows essentially no relationship between the two,” say social scientists Eleanor Singer and Phyllis Endreny, in a study of risk coverage by newspapers, news magazines and television stations. Another study by researchers Robert Lichter, Stanley Rothman and Mark Mills, examining 1,147 stories over 20 years, found that the media gave more attention to artificial carcinogens that scientists generally believe to be low risk, while neglecting the natural carcinogens that scientists believe present more of a problem.
Howell Raines, editor of the editorial pages of The New York Times, responds that the scientific definition of risk is too narrow. “Risk is not just about the statistical threat to health and life,” he says. “Risk is also about what kind of society you want to have. I think we’re probably doing a better job if we’re responding to the popular sense of risk rather than the scholarly side of risk.”
The problem is that there is very little black and white in the world of risk. Mostly, there are shades of gray. Conflicting research implies different conclusions, and much of the research is regarded with skepticism because it is funded by parties with a partisan interest.
One example is the controversy surrounding second-hand smoke. A report published by the Environmental Protection Agency in 1993 labeled second-hand smoke a human carcinogen, holding it responsible for 3,000 cancer deaths a year and 36,000 deaths from heart disease. The report also said that between 50 and 67% of children under the age of five live in homes with at least one adult smoker, and that smoking was linked to 300,000 cases of infant respiratory infection.
Critics charge that the EPA distorted the findings of its studies. Scientists and researchers have joined the nonpartisan Congressional Research Service in suggesting that the EPA used unreliable methodology and failed to consider “confounding factors” - lifestyle and environmental situations that might have contributed to some of the illnesses observed - such as diet, poverty, heredity and consumption of alcohol and caffeine. Little of that criticism made it into the press, however.
“One reason the media have generally minimized criticism of the EPA report, and of the anti-second-hand smoke campaign, is the widespread sense among journalists that spokesmen and apologists for the tobacco industry have long lied about the dangers of smoking,” says David Shaw, a reporter for the Los Angeles Times, who has written extensively about the media’s coverage of risk. “As a result, anyone who says anything that seems supportive of a tobacco industry position is viewed with skepticism.”
Forbes MediaCritic, a right-wing media watchdog publication, was one of the few to focus on the alleged flaws in the EPA report, making space for a paid tobacco industry spokesman (who was not identified as such) to criticize the methodology. But the majority of the coverage focused on the link between second-hand smoke and cancer, devoting little space to these criticisms. US News & World Report, another conservative publication, used its cover to ask: “Should Cigarettes Be Outlawed?”
A final factor that creates chaos in the risk communications process is scientific illiteracy: the fact that most Americans lack even the most rudimentary understanding of chemistry and biology, and that many of the reporters covering science and technology issues bring no more than a layman’s expertise to the job. One example of this ignorance, cited by Woodell, is the recent move to “ban” chlorine. As she says: “It is difficult to imagine any way to ‘ban’ a dues-paying member of the periodic table.”
Again, however, there are indications of a change. The public, suffering perhaps from an overdose of fear, is becoming more tolerant of risk and less tolerant of people telling it to be fearful of everything from cellular telephones to apples. (Says Burson-Marsteller’s Michael Kehs: “I had one guy in a focus group tell me: ‘I’m far more worried about having a heart attack because I missed a telephone call than I am about getting brain cancer from using a cellular phone.’ He made his own cost-benefit analysis, I guess.”)
“I’m struck by how often reporters call me and say: ‘Is this something we should be concerned about or is this another alar?’,” says Paul Portney, vice president of Resources for the Future, a Washington scientific group that focuses on environmental issues, referring to the 1989 scare over apples sprayed with the pesticide alar, which many journalists now consider to have been the most egregious example of the environmental movement crying wolf.
It may be that the media is in tune with the general public, which appears to be more accepting of some risk than was the case five or ten years ago. Chuck Rund of the San Francisco-based research firm Charlton Research Group has been presenting the findings of a study that indicates younger people in particular are less likely to respond with Pavlovian horror to the latest environmental scare, and are actually prepared to concede that some risk is a necessary part of life.
It may also be that after a decade of exaggerating safety concerns and scaring consumers to death, the activist community is finally seeing its credibility start to wane. Reporters, who have traditionally responded to the notion that environmentalists have no financial interest in the positions they stake out, have come to see the link between scare stories and fund-raising, and are prepared to regard the activist community with as much skepticism as they regard business.
All of which is not to say that industry’s credibility is on the rise, which should be a concern, since credibility is likely to be the key for corporate interests both in the debate over regulatory reform and in the aftermath of any reform, when public consent will still be needed.
Credibility is difficult to define, but Columbia University’s Vincent Covello has devised a formula that he believes reflects the way people make their decisions on whom to trust. Competence and expertise, he says, accounts for only 15-20% of the judgment process. Another 15-20% is allocated to honesty and openness, and to commitment and dedication. But 50% of the decision will be based on empathy and caring, which most people will assess within the first 30 seconds. Moreover, when trust is low and concerns are high, non-verbal communication provides between 50-75% of message content, and almost always overrides verbal communication.
The most effective communication, Woodell adds, is interactive, and this is particularly true in the case of risk communication. Even when a risk is remote, she adds, interactive communication, in which dialogue is encouraged, enhances credibility by demonstrating that the company is willing to listen.
Woodell suggests five essential characteristics of effective risk communication:
  • accuracy - first and foremost, information must be comprehensive and accurate, reflecting a company’s full and current knowledge, and results and opinions must credibly withstand close scrutiny;
  • timeliness - new information about a process or a product should be disclosed as soon as it is verified;
  • clarity - information that experts take for granted when communicating with their peers may be complex and even unintelligible to a lay audience, and conveying such information requires practice and patience;
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