NGO-corporate partnership: does it challenge business?

By Peter Jacobs, Corporate Watch

This article is an insider's account of a multinational corporation and its 'partnership' with an international non-governmental organization (NGO). The organizations involved are anonymised. Naming them would be counter-productive to the argument, as our intention is to examine the processes involved in NGO-corporate partnership. It is useful to name the organizations involved in specific case studies where the aim is to target these specific organizations. The focus of this article is on general principles. In addition, the author had agreed with the corporation in question not to reveal its identity.

If you think about how an NGO actually relates to a corporation in a 'partnership', the question immediately arises: how would an NGO matter to a corporation if it could not be present at all times?

First, I will introduce the corporation and the NGO, then I will outline the history and the rationale of their engagement. I will then focus on a variety of instances of how the NGO was present in the everyday workings of the Corporate Social Responsibility (CSR) unit of the corporation. I shall conclude by questioning the usefulness of NGO engagement with corporations.

The players

The corporation in question is a multinational company in the financial services market, employing over 10,000 people and 'serving' tens of thousands of customers in more than 50 countries. In a recent year, its profits were over 7,000 million USD.

The NGO, also multinational, focuses on environmental conservation. Relative to other NGOs, it is as important and powerful as the corporation. It draws resources from a supporting base of several million people in many countries - almost comparable to the number of countries that the corporation operates in.

The game

How did the corporation's and NGO's engagement with each other originally start? Here is the story I was told in a café on a sunny Thursday morning by one of its initiators, a public relations (PR) specialist working for the corporation.

During a 'stakeholder dialogue', the corporation invited a variety of not-for-profit organisations to learn about its internal processes and suggest changes. One of these was our conservation NGO. The corporation had been interested in developing a partnership through which it could establish institutional access to expert knowledge on how to deal with climate change issues. This NGO was preferred over both academic partners, which were perceived as 'not quite so flexible', and consultants, who were part of their economic territory anyway. In contrast, a partnership with the NGO promised access to a part of society that the multinational was less involved with, i.e. green clientèle. At the same time, the conservation organisation was quite a moderate voice compared to other environmental NGOs.

To make this partnership profitable, the corporation was specifically interested in the NGO’s understanding of green markets. The NGO would be able to recognise whether the multinational’s environmental conduct was scaring consumers off. At the same time, the PR specialist thought of the relationship as providing a source of perspective for his employer: to see the corporation through the eyes of the NGO. In this sense, the partnership established an early warning system on reputational risks with respect to the green image of the corporation.

The engagement process took, and takes, form through meetings, phone calls, workshops, letters of intent, memorandums, commonly commissioned studies, shiny brochures and the transfer of millions of dollars into the NGO's accounts (the NGO received a contracted amount of 'donations' from the corporation). Additionally, the corporation was to 'green itself' and lobby for the 'greening' of public policies that governed several industrial sectors. These political aims were in line with the NGO's own aims. Thus, through the partnership, the NGO would enlist the power of the corporation to some degree to fight for its political agenda, at least in theory. I cannot report on the effectiveness of this grand idea of political lobbying. I can, however, outline how this specific partnership manifested itself in everyday corporate greening activity. Here are three examples:

On the wall: In several of the corporation's offices, a calendar produced by the NGO was put up on the wall. It was a widespread practice within the company to have calendars on the walls; a useful instrument to manage time. Time is a key coordinating dimension for many corporate practices. Even though most date coordination is nowadays done through Microsoft Outlook or a Blackberry phone, it can still be convenient to have a large calendar on the wall to see a whole year at a glance. The NGO's calendar, however, showed single months only. About 90% of the calendar's space was used to show a beautiful natural picture, for example a gorilla. The NGO's logo accompanied the little date row. What can be made of this? While calendars may be a useful object in corporate offices, the NGO one was not quite so apt as a time coordinating device. Rather, it more of an indication, to both visitors and workers, that there was some sort of partnership between the corporation and the NGO.

Explaining the corporation's Environmental Management System: An Environmental Management System (EMS) is a concept used to refer to an organisational scheme that is supposed to help the company to continuously green itself. Our corporation had such a scheme. The head of the EMS explained to me that the NGO had asked the company to organise its greening practices in such a way that an external auditor would be able to verify its EMS. What does this imply? The NGO is rendered as a legitimising resource by invoking its claims. For some corporate actors who had similar relationships with NGOs, the partnership allowed the companies to argue, as in this case, that their greening practices were of a high standard (how effective such standards are is another story). The NGO partnership can also be used rhetorically by some workers to argue for spending more money on greening exercises, like an EMS, and, through that, fighting other employees who do not want to spend resources on 'greening'.

Making decisions about an environmental accounting algorithm: A third way in which the NGO was present within the corporation can be found in the instance of a meeting in which environmental accountants discussed, and had to decide, how to shape an algorithm that was used to reflect the corporation's environmental impact.The environmental impact of any operation, like producing a leaflet, flying from London to Manchester or building a bridge may be represented quantitatively. However, these quantities are not objective; they are generated in specific social and political contexts. For instance, the order and type of steps used to produce algorithms have to be defined by humans, which means qualitative and inherently political decisions are always involved.

In our example, several alternative algorithms were available. The corporate actors decided to involve further actors to legitimise the choice of one option that served the interests of the company. Besides the financial accountants and a global auditing firm, they also considered involving the NGO. However, this was immediately ruled out. What does this tell us? Involving the NGO can provide legitimacy, and this may be politically useful. However, it can also be a risk. After all, the corporation had to ensure that the NGO did not learn more than necessary about a number of management choices, which were better left in the dark.

Conclusions

These instances clearly show that an NGO may be present within a corporation in a variety of ways. An overall evaluation of whether it is useful to support such partnerships depends on your political ideas and how they relate to these kinds of engagements. If you believe in changing society through ideas, then you might be satisfied with spreading symbols into the offices and work places of a corporation. However, if you are more interested in actual material changes of corporate practices, then you need to consider how your engagement affects corporate processes in your physical absence: how will corporate actors use the engagement as a resource for their own benefit? In the absence of immediate control over how the engagement influences corporate practices, employees may exercise their power over how to inform and include the partner NGO.

My observations on how the NGO was present within the everyday operations of the corporation suggest that engaging with the company did not fundamentally challenge its operations. First, the NGO provided the resource for rendering the offices' atmosphere greener. Second, the NGO was used internally as a resource to legitimise those strategies, which some of the managers were following anyway. Third, the NGO was excluded from influencing the substantive decisions, e.g. those about accounting and finances. At the same time, the 'partnership' repositioned the NGO closer to the corporation: As the official partner, the NGO was not to publicly criticise the corporation and has, thus, lost its critical potential.

How are we to link these observations and conclusions to the politics of engaging with corporations in general? One obvious thing is that the partnership is about money in three ways. Firstly, corporations pay their NGO partners to be allowed to use their labels. This promises higher profits for the corporations, which allows them to continue their profit-driven enterprises, i.e. competing with other corporations where those with the most 'efficient' means of exploiting people and the environment dominate the market and generate more profits.

Secondly, the NGO is able to present itself to its 'customers', i.e. to the masses who provide donations, as being a recognised actor playing on a level playing field with powerful businesses, which promises effectiveness: NGOs engaging in partnerships want to be perceived as being able to influence corporations' practices and politics. If people actually follow the route laid out by those participating in such partnerships, they will provide financial support to these NGOs because the latter can be understood as working on real-world issues, i.e. those phenomena that are construed by advertisement and mainstream media as 'our' problems that 'we all' face. The partnership is even more successful if people start to consume the products and services of the corporation.

Thirdly, if certain businesses are declared by politicians, bankers and other actors as 'green' or 'socially responsible', then they may increase profits. A 'green' corporation is more likely to attract ethical investments; a 'socially responsible' corporation is more likely to win bids in this environmentally concious age. Through such partnerships, corporations gain a green or ethical image, whether or not this is reflected by their actual business. This is known as greenwash.

An NGO seeking to influence the inner workings of a corporation has to invest a lot of time and energy to learn and be part of corporate reality. By doing this, however, the NGO is effectively turning into another service provider for the corporation. At the same time, there is little evidence that this 'investment' in the corporation has any direct influence on the corporation's destructive practices. The results of the engagement process are largely symbolic: the corporation receives a 'green' or 'socially responsible' licence; the NGO portrays or thinks of itself as actively changing business, yet it has to censor itself from publicly challenging its corporate 'partner'. It could be argued that this, in turn, may weaken or hinder more radical interventions by others. Activists should, therefore, challenge such partnerships and show those buying in to them the real effects of these engagements and what kind of ecological, social and political changes they preclude.

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