Non-governmental organizations (NGOs) have played a major role in pushing for sustainable development at the international level. Campaigning groups have been key drivers of inter-governmental negotiations, ranging from the regulation of hazardous wastes to a global ban on land mines and the elimination of slavery.
But NGOs are not only focusing their energies on governments and inter-governmental processes. With the retreat of the state from a number of public functions and regulatory activities, NGOs have begun to fix their sights on powerful corporations – many of which can rival entire nations in terms of their resources and influence.
Aided by advances in information and communications technology, NGOs have helped to focus attention on the social and environmental externalities of business activity. Multinational brands have been acutely susceptible to pressure from activists and from NGOs eager to challenge a company’s labour, environmental or human rights record. Even those businesses that do not specialize in highly visible branded goods are feeling the pressure, as campaigners develop techniques to target downstream customers and shareholders.
In response to such pressures, many businesses are abandoning their narrow Milton Friedmanite shareholder theory of value in favour of a broader, stakeholder approach which not only seeks increased share value, but cares about how this increased value is to be attained.
Such a stakeholder approach takes into account the effects of business activity – not just on shareholders, but on customers, employees, communities and other interested groups.
There are many visible manifestations of this shift. One has been the devotion of energy and resources by companies to environmental and social affairs. Companies are taking responsibility for their externalities and reporting on the impact of their activities on a range of stakeholders.
Nor are companies merely reporting; many are striving to design new management structures which integrate sustainable development concerns into the decision-making process.
Much of the credit for creating these trends can be taken by NGOs. But how should the business world react to NGOs in the future? Should companies batten down the hatches and gird themselves against attacks from hostile critics? Or should they hold out hope that NGOs can sometimes be helpful partners?
For those businesses willing to engage with the NGO community, how can they do so? The term NGO may be a ubiquitous term, but it is used to describe a bewildering array of groups and organizations – from activist groups ‘reclaiming the streets’ to development organizations delivering aid and providing essential public services. Other NGOs are research-driven policy organizations, looking to engage with decision-makers. Still others see themselves as watchdogs, casting a critical eye over current events.
They hail from north and south and from all points in between – with the contrasting levels of resources which such differences often imply. Some are highly sophisticated, media-savvy organizations like Friends of the Earth and WWF; others are tiny, grassroots collectives, never destined to be household names.
Although it is often assumed that NGOs are charities or enjoy non-profit status, some NGOs are profit-making organizations such as cooperatives or groups which lobby on behalf of profit-driven interests. For example, the World Trade Organization’s definition of NGOs is broad enough to include industry lobby groups such as the Association of Swiss Bankers and the International Chamber of Commerce.
Such a broad definition has its critics. It is more common to define NGOs as those organizations which pursue some sort of public interest or public good, rather than individual or commercial interests.
Even then, the NGO community remains a diverse constellation. Some groups may pursue a single policy objective – for example access to AIDS drugs in developing countries or press freedom. Others will pursue more sweeping policy goals such as poverty eradication or human rights protection.
However, one characteristic these diverse organizations share is that their non-profit status means they are not hindered by short-term financial objectives. Accordingly, they are able to devote themselves to issues which occur across longer time horizons, such as climate change, malaria prevention or a global ban on landmines. Public surveys reveal that NGOs often enjoy a high degree of public trust, which can make them a useful – but not always sufficient – proxy for the concerns of society and stakeholders.
Not all NGOs are amenable to collaboration with the private sector. Some will prefer to remain at a distance, by monitoring, publicizing, and criticizing in cases where companies fail to take seriously their impacts upon the wider community. However, many are showing a willingness to devote some of their energy and resources to working alongside business, in order to address corporate social responsibility.
To learn more about what these partnerships look like, go to ‘Opposites attract’ using the menu on the left. There, NGO-business relations expert Jem Bendell explores several NGO-business relationships and explains how the new wave of partnerships differs from old-style corporate philanthropy.