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Market News

 February 22, 2006
Corporations and NGOs: working together

 Vancouver, Canada (GLOBE-Net) -- In a trend that will be examined in detail at GLOBE 2006, corporations are changing their attitudes towards Corporate Responsibility and Non-governmental organizations are changing their views of business drivers. The results can be seen in a number of unique partnerships that are changing the way both players act.

The number of companies that incorporate sustainability or social and environmental policies into high-level strategic planning has been growing rapidly. Many different industries have taken to including the environment in their mission and value statements, resulting in top-down initiatives that influence managers and operations.

The debate on whether such Corporate Responsibility (CR) is good for the bottom-line continues, as executives and scholars debate whether intangible benefits can be tied to profits and shareholder value. But many businesses do believe in such a link, and are looking to non-governmental organizations (NGOs), to help maximize those benefits.

One of the driving factors behind this attitude shift is the adoption of a multi-stakeholder approach to business. Instead of simply including shareholders, who retain their primary importance, many companies now see society at-large as a factor in strategic decision making, and see NGOs as representing certain societal values.

As GLOBE 2006 Speaker Gordon Lambert, Vice President of Sustainable Development for Suncor Energy says, "We believe that we have to earn societal consent to operate and grow for our business, and Corporate Responsibility is a means of achieving that. Outreach between corporations and NGOs has been part of a mutual, legitimate interest to understand each other's interests and work to maximize dual benefits."

"By understanding their concerns, it helps to raise our game...we want to know what faults we have from their point of view, and use those to help drive positive change in the business."

One example of a program that has brought together NGO and corporate stakeholders is the Canadian Boreal Initiative, a group dedicated to the conservation and sustainable development of Canada's boreal forest. Suncor, along with other resource companies and public stakeholders, worked with NGOs to develop the Boreal Forest Conservation Framework, a national conservation vision.

The CBI has won the support of many environmental groups, and has helped to raise Suncor's profile as an environmentally sustainable energy company. Adds Lambert, "such programs can help our business by helping us to look broadly for opportunities and solutions."

NGOs have been more receptive to working with corporations as well, in part because the prospect for affecting positive change has grown recently.

"Companies have been receptive to hearing our concerns for years, and collaborative actions have often led directly to action on their part," said a Greenpeace Canada representative. "What we are seeing now is that companies are much more open to seeing the economic advantages of being environmentally friendly. Progressive executives are responding to the 'carrot' of lower costs from acting sustainably, and to the 'stick' represented by NGOs that may lead public awareness campaigns. "

"Most often we have worked directly with companies and successfully cooperated, but unfortunately the nature of the press is to highlight to adversarial aspects of our work," he added.

A recent agreement to develop a management plan for BC's Great Bear Rainforest has been held aloft as a shining example of cooperation (see GLOBE-Net Article). Environmental groups and industry involved praised the agreement, but some environmentalists withdrew from a process which they said amounted to industry pressuring other groups for huge concessions and government subsidies. The resulting document certainly represents a unique achievement, but whether the long term results will favour industry over the environment remains to be seen.

Both sides also readily accept that there will be some issues where agreement cannot be reached. But such disputes are not failures; they emphasize, and can be used as part of the learning process.

The meeting of diverse groups poses challenges for each in working to build capacity to understand the other's point of view.

From the NGO perspective, there is the need to develop an understanding of key business drivers and models, to better relate economic and social aspects. Time and resources are also an issue, and some organizations will be able grow into this role while others diminish.

On the flip-side, business professionals must become much more knowledgeable, says Lambert, in order to better evaluate the environmental and social repercussions of business. But this is all part of promoting best practices and understanding the multi-stakeholder approach, he adds.

One of the best examples of a truly multi-stakeholder approach to a business and environmental issue is the Clean Air Strategic Alliance (CASA) of Alberta. Bringing together government, industry, and NGOs together to manage air quality issues in the Province, CASA is breaking new ground as a model for the future of corporate collaboration.

Formed by the Government of Alberta in 1994, CASA adopted goals of environmental protection, economic efficiency, and continuous improvement. Groups and teams made from various organizations work on air quality issues and make recommendations once a consensus is reached. Their work over the past decade has led to pollution-reducing legislation, largely in the oil and gas sector.

Mr. Lambert believes that CASA offers a "glimpse into the future, towards collaborative problem solving. The collaborative approach is important, as it also involves the government, which can facilitate implementation of public policy changes."

Certainly the growing profile of Corporate Responsibility will continue to be influenced by NGOs, and these groups will keep working to change corporate value systems. The collaborative process is still in development stages, but already the results have been seen as positive for both sides. Businesses that learn to expand their thinking in this regard may just earn a competitive advantage in the future.

As Mr. Lambert notes, "The framework brought by the NGOs causes you to think longer term and more broadly about business risks and opportunities that face the company. This delivers a benefit in terms of quality of strategic thinking, and often the dialogue has resulted in creative business solutions."