There was a time when a company’s interaction with non-profit organisations consisted either of fending off the ire of anti-corporate activists or of signing cheques for good causes.
While these activities continue, another, far more collaborative relationship has emerged in which companies, in pursuit of responsible business strategies, are turning to community groups, non-governmental organisations (NGOs) and UN agencies to help achieve their social and environmental aims.
Convening bodies such as the UN Global Compact are also making it easier for public and private organisations to connect with each other.
However, the process of embarking on joint projects is not without its difficulties. The business culture of fast decisions, rapid product development and swift implementation of initiatives is far removed from the slower, more bureaucratic style of many non-profit organisations. Trickier still, some partnerships involve a shift from an adversarial relationship to a co-operative one.
Coca-Cola’s work with Greenpeace takes place against a background of conflict in which the environmental group had been campaigning for the elimination of hydro-fluorocarbons, refrigerant gases that are powerful greenhouse gases. “They were very much on the attack with us and other companies,” says Salvatore Gabola, director of European public affairs at Coca-Cola.
Since then Coca-Cola, Unilever and others have been working with Greenpeace to develop alternative refrigeration technology and persuade suppliers to make the switch. “Instead of confronting each other, we slowly got into that mode of understanding each other and realising that we have common goals,” says Mr Gabola.
For Coca-Cola, there are several advantages of working with Greenpeace. For a start, Greenpeace’s recognisable brand as an environmental campaigner gives the companies it chooses to work with credibility. “It’s very powerful for a company to be associated with an NGO, especially if it’s an activist one,” says Mr Gabola.
Moreover, Greenpeace has environmental and technical expertise that a company such as Coca-Cola can use to implement change to a new refrigeration technology.
Technical expertise is also at the heart of another Coca-Cola partnership, announced in June: a water conservation programme with the World Wildlife Fund to protect seven of the world’s most crucial freshwater river basins. At the same time, Coca-Cola is working to continue to reduce its own water consumption with help from the WWF. “These are the kind of things we know we need to do, but we can’t do on our own because we don’t have the credibility or the expertise,” says Mr Gabola.
The fact that NGOs have local knowledge and experience of social and environmental issues is another form of expertise that is crucial as companies enter the development arena.
In India, for example, ICICI, the country’s largest private-sector bank, has increased its microfinance loans from $15m four years ago to more than $350m by working through local microfinance institutions. Through this network of local organisations, the bank can reach rural borrowers it would otherwise not be able to access.
The key to the success of these partnerships lies in the different assets that companies and non-profit organisations bring. “Unless we bring the specific skills and talent that each of these types of organisations have together, we’re not going to make the progress we need to make,” says Pamela Passman, head of global corporate affairs at Microsoft.
“We understand the power of software and computing, but we’re not experts on poverty or health. So we can make significant progress when we are partnering with NGOs, governments and international organisations such as the UN.”
Microsoft has more than 1,000 such partnerships around the world through which it rolls out such programmes as its Microsoft Unlimited Potential initiative, giving skills training to disadvantaged people with the assistance of community groups and NGOs.
ICICI’s microfinance model and Microsoft’s global partnerships are both examples of how alliances can give large companies access to communities they might not otherwise reach. “We can learn much more about local community needs and who are the key players,” says Ms Passman. “We need people who can help make connections and get the services to those that need them.”
As with access to technology and financing, access to medicine is another area where large corporations need local players to advance their social objectives. One example is the International Trachoma Initiative, founded by the Edna McConnell Clark Foundation and Pfizer, the pharmaceuticals company, to address trachoma, the world’s leading cause of preventable blindness.
Pfizer had developed a treatment that was effective in eliminating the disease but needed a way of delivering it to areas where the disease was endemic.
“What we had was the medicine,” says Robert Mallet, Pfizer’s head of philanthropy and corporate responsibility, and president of the Pfizer Foundation. “What the initiative had was the expertise on the ground. Put those things together and you have a real solution for communities around the world.
Case Study: Cool Earth
By
In just a few weeks since its launch last month, 3,500 people, companies and organisations have clicked into the Cool Earth website and contributed sufficient millions of pounds for one of the UK’s newest non-governmental organisations to buy more than 25,000 acres of threatened rainforest in Brazil and begin changing its use to ensure a sustainable livelihood for local communities.
Anybody with £35 to spare can protect half an acre, confident of doing something to tackle global warming.
Every year, deforestation releases more carbon dioxide into the atmosphere than all 301m citizens of the US, the most carbon-wasteful people on earth. Every acre of rainforest saved from the chainsaws and bulldozers keeps 260 tonnes of carbon from the atmosphere, the charity says.
Johan Eliasch, the Anglo-Swedish co-founder of Cool Earth, says: “We want to roll this out globally. That means we would have a Cool Earth initiative in every major country. We need to find people in each country who want to join the initiative.”
That’s mighty big talk for a new boy on the NGO block. Yet Cool Earth has put together a very credible advisory board. Sir Nicholas Stern, the London School of Economics professor and author of the Stern Report on climate change, is a board member, together with William Cohen, a former US Defence Secretary; and Ólafur Ragnar Grimsson, the President of Iceland.
Business leaders on the board include Sir Martin Sorrell, chief executive of global advertising group WPP; Maurice Greenberg, chief executive of US investment fund group CV Starr; and Mark Ellingham, founder of Rough Guides, the travel publisher.
Cool Earth is the brainchild of Frank Field, a Labour member of the UK parliament and social reformer, and Mr Eliasch, a sportsman turned businessman who is also deputy treasurer of the UK’s Conservative party.
Mr Eliasch was a skier of International standing. He went on to acquire several sports equipment businesses which he combined within Netherlands-registered The Head Group.
The company, listed in Vienna and New York, makes tennis, ski and diving equipment. In 2006 it generated net profits of €4.4m on revenues of €377m. Besides being Head’s chairman, and a significant shareholder, Mr Eliasch has sufficient personal resources.
“I was tired of hearing politicians talk about climate change but do very little,” he says. “I love trees. I looked for a piece of rainforest and found one I liked, owned by a logging company.”
Though he doesn’t confirm it, he is reported to have paid £8m for 400,000 acres of Brazilian rainforest. He stopped the logging, destroying 1,100 jobs, but hired some workers back as rangers. He gave open access to local communities for sustainable harvesting of nuts and Acai berries, now being hailed as an antioxidant ”superfood”. He says his forest provides a livelihood for 1,500.
When Mr Field read of that personal initiative, he realised that an umbrella organisation could channel the money of ordinary people to buy far larger acreages. They met, agreed on their shared vision, and set up Cool Earth, an entirely separate initiative, hiring a former Morgan Stanley investment banker and one-time aide to Mr Field, Matthew Owen, as director.
Cool Earth does not want to be seen as a carbon-offset scheme, yet many businesses are “exploring ways of using the mechanism”. One consumer goods company is looking at a scheme to offer consumers a choice of premium-priced packaging whose carbon ”cost” is matched by Cool Earth acreage.
The toughest challenges for Cool Earth, says Mr Owen, are handling the level of interest it has stirred, and putting in place economic arrangements that will sustain forest areas long-term. “Buying forest is dead easy,” says Mr Owen. “Preserving it is much more difficult.” Thanks to the convergence of ideas from business and charity, Cool Earth may have found a way to do both.
