How Business-NGO Partnerships Can Transform Markets

A recent Ethical Corporation conference delved into the dynamics of partnerships between business and non-governmental organizations.

Delegates from companies, NGOs and academia explored the grey area where the responsibilities of business and civil society blur. They discussed the benefits and pitfalls of working together to tackle social and environmental challenges

The partnerships discussed covered a spectrum, from a business handing a check to an NGO, to the two sides sitting together around the table to strategically shape a particular project, specific products or wider processes.

Anita Roddick, founder of Body Shop, declares partnerships between companies and organizations that have an image of ethical and environmental credibility to be "a lever that can change perceptions and change the world."

Forest and Marine Stewardship Councils are oft-quoted examples of successful partnerships; they have changed attitudes towards sustainable logging and fishing practices across the world.

At the conference, delegates discussed why so many relationships between businesses and NGOs, which fundamentally differ in terms of mandate, power and resource, fail to achieve substantial change.

Trust Crucial

Trust between the two types of organization was stressed to be the linchpin of all cross-sector relationships. The mottled history of these relationships can lead to suspicion on both sides.

Are NGOs going to exploit proximity to business to glean sensitive information that can be splashed over newspaper pages? Are businesses simply looking for public relations kudos by associating themselves with an NGO? Are companies using NGOs as a source of information to help arm themselves against critical views?

However, in line with efforts by some corporate social responsibility practitioners to gain an understanding of the complex, systemic nature of social and environmental problems from a business point of view, there is a move to transform the dynamics between businesses and NGOs in cross-sector partnerships.

WWF, one of the world's largest environmental NGOs, declares: "WWF's experience is that multi-stakeholder partnerships can quickly get bogged down by defensive positions and technical obfuscation."

The upcoming WWF One Planet Business project will bring together WWF, investors, consumer groups, policy-makers and business leaders from industries including the extractive, banking and utility sectors.

It will be founded on the principle that transformation of business and markets - not the incremental improvements that are the current focus of the corporate responsibility movement - is crucial to a sustainable future for the planet.

The focus will be on learning and developing shared visions and actions leading to sectoral transformation. The project will attempt to address the underlying causes of environmental degradation, not the mitigation of “discrete environmental concerns.”

A focus on specific wide-reaching policy changes and targets for action should avoid it becoming a mere talking shop, which has been a common criticism of the UN Global Compact initiative. The project will be formally launched in July.

It will be interesting to see how the different stakeholders address the power differentials that have characterized relationships between business and non-business organizations so far.

Only when NGOs are seen as equal partners, and only when value-based concerns about the welfare of the planet are seen as on par with those of short-term profit, will cross-sector partnerships as become Roddick’s “lever that can change perceptions and change the world.”

Roddick incorporated partnerships with NGOs encouraging community-based trade into the Body Shop’s business model. Perhaps, with the company’s sale to L’Oreal, we can expect a commitment to the ethical sourcing of ingredients, a ban on animal testing and the use of 100% recycled and minimalized packaging from L’Oreal soon?

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This column has been reprinted courtesy of Ethical Corporation. It was first published on May 23, 2006.