Can corporate-NGO partnerships save the environment? Part 2

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.