NGOs: More than flower power

"Greenpeace is a company's best ally," said John Passacantando, an official with the NGO at a business conference last year. The group can help "bring companies into port before the storm."

NGOs that set themselves the task of civilizing capitalism through markets seek to hold that system in check in a world where globalization is weakening the grip of governmental regulation.

Raymond van Ermen, who once lobbied European Union officials for stricter environmental safeguards, found the process "long and difficult." Though regulations are still needed, he says, the European Partners for the Environment, a firm he runs from Brussels, sets up "a fast track to influence the market" by working directly with business leaders,trade unions, and NGO activists. "In the last two or three years, we have seen impressive changes in the way stakeholders can influence the business agenda," he says.

A similar trend is evident in the way antiglobalization protesters - so violently visible in Seattle or Genoa - are shifting their approach to promote "alternative globalization." Rather than demanding an end to this historical process, they are seeking to shape it by globalizing labor rights and high environmental standards. But government regulations are still important to sanction companies that don't take the ethical bait NGO's offer, say some NGO activists, and noisy campaigns have a place alongside quiet persuasion.

The prospect of a public campaign can be just what a company needs to heed an NGO's complaints, says Mr. Danaher. "We tell them we know how to make their lives miserable but we'd rather not," he explains. "If they want us to go bother some other company, they just have to do the right thing."

And NGO negotiators in suits find their job easier if they seem to be struggling to make their voice of reason heard over the cacophony of protest in the street. "Inside or outside, we are all on the same side," Danaher says.

Beyond the carrot-and-stick tactics that Danaher employs, the nature of NGOs' long-term relationship with corporations is at stake. In many cases, says Mr. Moshoeshoe, that relationship goes little further than philanthropy. Huge companies that treat workers appallingly and devastate the environment "outsource their conscience," he scoffs, by donating money to NGOs.

"Our work is to make the business case for corporate social responsibility - if a business is to be sustainable it needs to integrate social and environmental issues into its structure," he says.

That attitude is gaining ground, says Seb Beloe, a coauthor of the report. Ratings agencies are springing up that measure companies' financial performance as well as a "triple bottom line," which takes account of their social and environmental record, as well as their profit margins. Though only a few hundred companies have drawn up "triple bottom lines" so far, that is "massively more than a few years ago," he says.

And on the other side of the activist-corporation divide, a matching change of mood points to some new directions. "Instead of just railing at capitalism," advocates Danaher, "let's see if we can't use some market savvy."

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