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NGOs: Friend or Foe to Business & Sustainability?

3p Contributor | Monday December 21st, 2009 | 3 Comments

ngoBy Vijay Kanal, CMC, Kanal Consulting

NGOs, or Non Government Organizations, have long been known for promoting socially responsible activities and engaging in philanthropic efforts. What is less known is that several are also partnering with major corporations around the globe on environmental sustainability efforts. On the surface, such partnerships may seem strange, since historically business and NGOs have had a somewhat adversarial relationship (mostly instigated by the NGOs). But enlightened companies and a few business-friendly NGOs have realized that their interests are more often aligned than not, and they have much to gain from working with one another.

What NGOs offer

NGOs have expertise in a number of areas – such as energy, food and agriculture, waste, and natural resources – to help business become more environmentally friendly, which can positively impact a company’s operations, supply chain, and impact in the marketplace. And they have a long history of working globally on these issues, so they can be valuable allies for companies even outside their home country.

To cite just a few of the many ways in which NGOs can and do benefit business, Environmental Defense Fund (EDF) and World Resources Institute (WRI) help companies with energy issues; WWF provides assistance with sourcing of materials, and Conservation International (CI) has expertise in food and agriculture.  Some NGOs also assist with policy issues and opening doors at governments around the world for market access, materials sourcing, and setting up factories, etc.

In some cases, these partnerships have also had a positive impact on the corporate brand, since an NGO association can provide much needed credibility on sustainability claims. While most NGOs we know of are careful not to endorse a particular company or product, their association with a company can boost the confidence level among its customers, investors and other stakeholders that it is “doing the right thing.”

Beyond that, Deborah Fleischer of Green Impact, who works with non-profits and business, says that NGOs provide feedback on how a company is perceived outside the business community, bringing issues to life for the CEO, providing valuable input to setting goals and metrics. Ultimately, they can help business stretch for higher performance.

What NGOs want

NGOs want to make a big impact on the environment so they choose their corporate partners carefully. “We look for opportunities where we can participate in a partnership and make a transformative change,” says David Witzel of EDF, citing examples of partnering with McDonalds on removing Styrofoam for food containers, and with FedEx on the development of a hybrid vehicle. Both initiatives have since been widely adopted in their respective industries leading to the major impact NGOs are seeking. Currently EDF is assisting Walmart with improving sustainability in its supply chain, which Greg Andeck at EDF cites as “very leverageable” for industry at large.

NGOs are also seeking promotion and publicity for their efforts. Generally, they insist on being able to communicate the results from corporate projects in the hope that it will spur other companies and industries to adopt similar practices.

Finally, I think NGOs want to be heard. Most have noble ideals and goals and want to make a difference. Even if business does not partner with them, it should listen when they come calling.

Overcoming Concerns in Business

Unfortunately, from our own experience at Kanal Consulting, working with dozens of companies, the typical reaction to NGO involvement is to avoid it. As one executive from a large technology company told us recently, “why would we risk being criticized by an NGO when they’re leaving us alone?” Beyond this perception is a lack of understanding on what these organizations actually bring to the table that will help their business, because NGOs often communicate in language that is not relevant for business.

Many companies are also reluctant to engage with NGOs because they don’t know where to start, or they consider themselves to be too far behind, and fear they will be ostracized for it. Justin Ward of CI says their door is definitely open to working with companies at whatever stage of development. “We’re eager to work with companies that have a sincere interest in environmental improvement, even if they’re just getting started.”

Another concern is the cost of these “partnerships.” It’s easier for companies like IBM and Johnson & Johnson to write an annual (large) check than get help from an NGO. But we have found that if the environmental impact is potentially big, EDF is willing (in fact insists) on providing their expertise at no cost, and a few groups like CI and WRI will occasionally work with companies for little or no compensation.

Mr. Witzel added, “We don’t do partnerships to raise money, we do partnerships to have an environmental impact.”

But, not all NGOs are created equal

We caution companies also to pick their NGO partner with care i.e. only after doing proper due diligence to see if it has the expertise they are seeking, and a track record of working successfully with business. Not all NGOs are as open and collaborative with business as the NGOs cited in this article. Some organizations like Greenpeace that have a history of anti-business activities, including vandalism, should be avoided.  Yes, there are companies that work with them but we hear it’s often not by choice. Until these activist organizations demonstrate a willingness to consistently and constructively engage business – and they are getting better at it but still have a long way to go – I think there are far better choices in selecting an NGO partner.

Beyond that, there are the intangible areas where alignment is essential. Suzanne Apple at WWF says that the three critical success factors are:

  1. Mutual Trust
  2. Shared Interests
  3. Creating a Win/Win Outcome

Samantha Putt del Pino at WRI adds that if there is true commitment from both parties, the rest will follow.

This makes abundant sense because unless the company and the NGO have alignment in all these areas, the partnership will eventually fail. Both sides should also clearly spell out their objectives, and identify the outcomes they have in mind to define success, and avoid surprises down the road.

A Few Examples of business-friendly NGOs

Some basic profile information on a few NGOs we have found to be good partners of business follow, but this is by no means a comprehensive list. Ceres, NRDC and others are also known to work effectively with business, but were not researched for this article.

Conservation InternationalEnvironmental Defense FundWorld Resources InstituteWWF
Areas of Technical Expertise
  • Carbon Tools
  • Food & Agriculture
  • Soil & Water
  • Supply chain
  • Energy
  • Fleet mgmt
  • Packaging
  • Seafood
  • Supply Chain
  • Toxicity
    • Carbon Tools
    • Policy Analysis
    • Renewable Energy
  • Fisheries
  • Forestry
  • Sourcing
  • Water
Geographic Focus*WorldwideMostly USWorldwideWorldwide
Corporate-focused employees* 30 in group known as CELB2520 in two corporate focused groups8 in US, managing corporate relationships, plus field personnel

*Refers only to projects working directly with business

What NGOs can do to help their cause

In our research, we have found only a few NGOs know how to communicate effectively with business. Businesses cannot relate to goals (however noble) related to climate change and oceans and making the world a better place. They need to know how an NGO can solve their business problems, in language that relates to their objectives and challenges. For instance, rather than talking about how an NGO is helping to slow climate change, it should communicate how it can help business with finding cost-effective sources of renewable energy. Rather than talking about how it is helping to slow pollution in oceans, it should promote its expertise in finding sustainable sources of seafood.

NGOs can also be more open to, and pro-active in forming, partnerships with business. Other than the well-known names, most companies we work with – despite being large – have not been approached by NGOs to help on sustainability efforts.  This is a missed opportunity in my view.

Conclusion

While society by and large would agree that NGOs benefit the world from a social perspective, we suspect most of the business community would say that NGOs’ objectives are not aligned with their own. A few activist NGOs have created this perception resorting to extreme measures to get their point across. But I think that this broad brush is being unfairly applied to NGOs that do recognize that business serves a legitimate purpose, and though their objectives are not identical, there is much common ground. NGOs in general, and the activist ones in particular, need to do a better job of communicating their value proposition in language that business understands, and business needs to be more receptive to listening to, and working with NGOs. I believe both will benefit in time from the relationship, and just as importantly, so will the environment.


Vijay Kanal is a Certified Management Consultant and Managing Principal at Kanal Consulting, a boutique management consultancy based in San Francisco that provides business strategy, marketing, and sustainability services.  His firm has worked with dozens of corporations on improving their sustainability efforts. He can be reached at 415-788-8500 or vijay@kanalconsulting.com.


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