Can corporate-NGO partnerships save the environment? Part 2

This is part two of a two part series. Part one is available here

Fisheries

As the harvest of agricultural commodities on land threatens biodiversity, so does the harvest of fish and other marine life from the world's oceans. Overfishing has pushed three-fourths of marine fish stocks to their biological limits. Coral reefs and other marine and coastal ecosystems around the world are suffering from destructive fishing and aquaculture practices, as well as pollution from agricultural runoff and other land-based sources.

Unilever, the world's largest buyer of seafood, partnered with WWF to establish the Marine Stewardship Council in 1997. The MSC developed a standard for "sustainable and well managed" fisheries and a label for products from fisheries complying with the standard. McDonald's is working with the Center for Environmental Leadership in Business to assess fishing practices and identify actions that the company and its suppliers can take to protect marine biodiversity in key fisheries.

Energy and Mining

As global demand for energy and minerals grows, oil, gas, and mining companies expand into biodiversity-rich ecosystems around the world, risking biodiversity loss by land clearing, habitat conversion, pollution, and agricultural colonization along access roads and pipeline corridors. Global energy and mining companies have become prime targets of environmental advocacy groups. ExxonMobil, Shell and Freeport McMoRan have been the targets of international criticism for the environmental impacts, conservation and human rights abuses.

Some companies have begun to form partnerships with conservation organisations to reduce the ecological footprint of their operations and to contribute to conservation. Mobil has worked with Conservation International, Shell with the Smithsonian Institution, Chevron partnered with the WWF and Rio Tinto has worked with a number of research institutes and NGOs.

In 2001, a group of leading energy companies and conservation organisations launched the Energy & Biodiversity Initiative. The EBI is convened by the Center for Environmental Leadership in Business and its partners include BP, Chevron Texaco, Conservation International, Fauna & Flora International, The Nature Conservancy, Shell International, the Smithsonian Institution, Statoil, and the World Conservation Union (IUCN). In 2002, the newly formed International Council for Mining and Metals announced that it would work with IUCN to develop biodiversity best practices for the global mining industry.

Tourism

Tourism can be a cause of environmental damage as well as a positive force for conservation. One of the world's largest industries, it is projected to expand four-fold from its 1996 levels by 2010. Nature-based tourism in areas with significant biodiversity is increasing more rapidly than the industry as a whole.

Tourism involves major infrastructure development, increased demands for water, energy and waste disposal, and an influx of new people, ideas and cultures. The tourism industry has perhaps the strongest incentive to conserve biodiversity as the future of its business depends on protecting the natural beauty and cultural richness its customers pay to visit.

Despite the strong business case for conservation, the industry has been slow to develop partnerships with conservation organisations, due in part to the structure of the industry, which is highly decentralized.

Seventy per cent of cruise ship destinations are within the global biodiversity hotspots. The industry has made significant investments in waste disposal and pollution prevention but other impacts have been largely ignored, especially those outside U.S. waters. These impacts include damage to coral reefs from ships' anchors and tourist diving expeditions, and pollution and habitat degradation associated with port development

Conservation organisations should partner with developers to reduce the impact of new hotels and resorts in sensitive coastal regions. The International Hotels Environment Initiative (IHEI), a program of the Prince of Wales International Business Leaders Forum, was established in 1992 to improve the environmental performance of the global hotel industry. IHEI recently launched a program with the Center for Environmental Leadership in Business to develop guidelines for the siting, design and construction of hotels and resorts, with special emphasis on the biodiversity hotspots.

Global tour operators control a significant flow of tourist traffic through bulk purchases and are important sources of leverage to influence the environmental practices of local hotels. The United Nations Environment Program launched the Tour Operators' Initiative for Sustainable Tourism Development (TOI) in 2000. It now includes 26 of the world's leading tour operators.

Are Partnerships Working?

Partnerships became a prominent feature as NGOs and corporations adapted to new features of the global economy, including the expanded global reach of many large corporations, enhanced public and media scrutiny of these companies' behaviour, and reluctance of governments to enact new environmental regulations.

An impressive number of partnerships have been launched, yet the companies involved control only a fraction of the economic activities that threaten the world's critical ecosystems. In the absence of new regulatory policies voluntary partnerships need to focus on strategies that leverage behavioural change far beyond the operations of the companies directly involved. Partnerships should focus on global leaders whose actions influence the behaviour of competitors and their global supply chains. They should promote conservation approaches that help protect threatened species and habitats, such as the creation of new parks and protected areas.

All of the major environmental organisations have experimented with partnerships to some degree. Similarly, most multinational companies that have a significant environmental impact have formed partnerships with one or more NGOs.

With all of this investment in partnerships, it is reasonable to ask whether they are working. The partnerships reviewed here have all yielded concrete, if limited, results that have helped to protect the environment and to make companies more profitable and competitive.

This is significant, given that these benefits would not have materialized but for the voluntary initiative of the companies and NGOs involved. In each case, no public policy compelled the partners to act. In all cases, the partners took considerable risks to make the results happen. They risked their time and money on an uncertain venture. More importantly, they risked their reputations. NGOs faced criticism they were "greenwashing" the image of undeserving companies. Companies likewise faced that they were wasting money and "selling out" to environmentalists.

But have the partnerships worked to spur others in industry to act, to influence public policy, or to deliver environmental benefits beyond what the partners themselves could accomplish? Have they been catalysts? Unfortunately, the answer to this important question is, not yet.

NGOs like Environmental Defense, WWF, and the Pew Center launched their partnerships with the intention of showing skeptical policy makers and industry leaders that emissions can be reduced substantially at low or no cost. Despite the success of these partnerships U.S. policy has not changed. More industry leaders have been persuaded that climate action is feasible, but many admit privately that public policy is essential to spur action commensurate with the scope of the problem. A common rationale for voluntary action is to gain experience with reducing emissions so as to be competitive when a carbon policy takes effect. Without a policy, most companies are unlikely to move beyond modest pilot efforts.

Similarly, in the biodiversity arena, where eco-labelling has been the dominant strategy of voluntary partnerships, consumer demand has been less than hoped and companies have incorporated conservation principles in their operations primarily to enhance their reputations, in response to pressure from NGOs and because of corporate values among owners and chief executives.

With a stagnant economy and the public's attention focused on international terrorism, U.S. public policy and consumer attitudes are unlikely to change in the near future. Voluntary action is unlikely to spread far beyond "the usual corporate suspects".

The Way Forward

But the usual suspects could exert much greater leverage. Three strategies are key.

First, conservation partnerships need to focus on supply chains, through incentives for suppliers to adopt better conservation practices. Forest and paper companies are forging partnerships with conservationists not because of mass consumer interest, but because of the demands of key retailers who themselves are responding to pressure from environmentalists. There is tremendous opportunity to improve conservation practices in agriculture if more leading companies can be encouraged to demand better conservation practices of the millions of farms worldwide that supply their raw materials.

To engage global corporations in supply-chain partnerships, conservationists need to work collaboratively with them to establish conservation standards and verification systems that are clear, achievable, inexpensive and simple. Environmental standards need to be balanced against price, quality and other imperatives. Only through compromise will a voluntary supply-chain system work at a scale large enough to match the impact that public policy imperatives would have.

A second key strategy is to expand the focus of voluntary initiatives. To create partnerships that look 'beyond the fence-line', NGOs need to emphasize the business case for doing good, not just for doing less harm. Most to date have focused on reducing firms' own environmental impacts. The focus needs to be more on creating innovative solutions for the problem at the landscape or global level. Reducing greenhouse gas emissions among a handful of leading energy companies makes a tiny dent in atmospheric concentrations but the successful commercialisation of low-carbon energy technologies by those firms could have a tremendous impact. Environmental partnerships need to use corporate pride as motivator, not only corporate responsibility for correcting bad behaviour.

The lack of major business-NGO partnerships on water conservation is interesting as water availability has been identified as one of the key environmental challenges of the new century. The problem of water scarcity in most regions results not from the behaviour of large industrial firms, but from inefficient water use in agriculture and from the degradation of watersheds. Shifting the focus of partnerships to creating landscape-level water conservation solutions could attract valuable corporate allies.

The third key strategy is to create partnerships that involve joint business-NGO advocacy for effective public policies. The proposition that public policy will not change could be refuted if corporations and NGOs change the terms of the environmental policy debate. If progressive business leaders and environmentalists agree a common environmental policy agenda the political winds could shift rapidly. The Pew Center for Global Climate Change, with its Business Environmental Leadership Council, is an excellent example of this approach.

For any of these strategies to work NGOs need to learn to compromise, to build trust and to collaborate on innovative solutions while keeping up the pressure, without which large corporations have little incentive to take voluntary action. It is probably most effective for some NGOs to specialize in pressure, and others in collaborative solutions - and for each to recognise the value in the other's role.

NGOs also need to learn to work more collaboratively with each other. Too often ego and competition for donors and media attention prevent NGOs forging alliances that could yield larger-scale results. Competition among NGOs leaves corporate partners confused. The Center for Environmental Leadership in Business has found that it is often harder to get NGOs to collaborate than companies in highly competitive industries.

With ingenuity and a spirit of compromise, business leaders and conservationists can together accomplish a world of good for the environment and for the economy in this era of strange bedfellows.

This is part two of a two part series. Part one is available here