The new wave of business-NGO collaborations differs from the relationships of the past. No longer is corporate philanthropy the main driver for collaboration. We are now seeing the birth of strategic partnerships that are designed to tackle both internal operational issues and the external impacts of corporate activity.
Modern NGO-business partnerships involve NGOs and trade unions in decisions that affect core business practices. As a consequence, corporate social responsibility (CSR) no longer consists merely of the 'nice' things a company might do with its profits; increasingly, it goes to the heart of how companies make those profits in the first place.
A notable trend in business-NGO relations has been that of development NGOs in the northern hemisphere promoting sustainable development among companies in the south. For example, the British NGO Fairtrade Foundation launched a pilot project in 1997 to work with British companies in developing codes of practice to guide relationships with their southern suppliers.
A similar initiative, but with a broader mandate and with UK government backing, was launched in 1998. The Ethical Trading Initiative (ETI) is an alliance of companies, NGOs and trade union organisations committed to working together to identify and promote good labour practice, including monitoring and independent verification. Participants include supermarket chains J. Sainsbury and Tesco, leading garment industry players such as Levi Strauss and the Pentland Group, and NGOs such as Oxfam and Save the Children.
There are many such partnerships where corporations do not actually give money to the NGOs with which they collaborate. Neither do they focus their partnership efforts on initiatives that are external to corporate policy and practice, such as a community development, conservation projects or other 'good works'.
However, the situation is different in the south, where NGOs are not as well-financed as their northern counterparts. Since the mid-1990s, international development agencies and charitable foundations have been making funds available for NGOs that seek to improve the social and environmental performance of businesses operating in their communities.
In addition to such one-on-one collaborations, some NGOs are helping to establish systems of certification in order to enable companies to monitor, measure and then credibly communicate social and environmental best practice to consumers. For example, environmental NGOs such as the World Wide Fund for Nature (WWF) have helped set up a new globally applicable system for the endorsement of products from properly managed forests - the FSC accreditation, certification and labelling scheme. Instead of waiting for inter-governmental regulatory agreements, or for full implementation of existing regulations, the NGO spearheaded the creation of a new organization, with an accelerated timeframe for moving the industry towards sustainability.
Of course, NGO-business collaborations are not always straightforward. For example, efforts to create a certification scheme for banana plantations (see Chiquita case study) demonstrate some of the challenges that can arise.
So what can business gain from forging a relationship with an NGO? The answer is fourfold:
Research shows that social and environmental reports by companies continue to suffer from a credibility gap in the eyes of stakeholders. The United Nations Environment Program (UNEP) argues that 'faced with this credibility challenge, active dialogue and stakeholder partnerships assume unprecedented importance'. Northern-hemisphere retailers of products from the south need credible information in order to reassure consumers, as do southern exporters.
By working with NGOs, some companies have generated a level of interest in their environmental policies which hitherto was the preserve of niche environmental retailers.
Expertise and innovation
NGOs have a wealth of expertise in sustainable development issues. For example, efforts to establish the forest stewardship certification (FSC) scheme demonstrated that retail outlets, with complex supply chains and often strained buyer-supplier relations, benefited from WWF's free advice.
Companies can tap into NGO networks in order to address sustainable development issues 'on the ground' in countries where their suppliers are operating. International NGO networks also offer opportunities for southern suppliers to gain access to socially and environmentally progressive markets in the north.
Opposites can attract. It is the differences that exist between NGOs and businesses – both in resources and in organisational forms - that make NGOs attractive partners for companies seeking to make the transition to sustainability. It is important that those differences - in particular the capacity of NGOs for independent advice and action - should not be compromised as a result of any partnership -building.
Partnerships should not be seen in isolation from other forms of NGO campaigning. They form one (increasingly important) element in an NGOs' toolkit for bringing about change. Partnering with NGOs can be an attractive proposition, because NGOs bring a unique perspective to the boardroom table.
(By Jem Bendell)
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