Onetime foes, companies and activists find ways to cooperate

Companies and activists are partnering on environmental, health, and other issues. Labor initiatives are more problematic.

By , Correspondent

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    In 2007, Ford reached out to activist groups for help on becoming more environmentally friendly. Since then, it has introduced cars like the hybrid Fusion and some groups have toned down their rhetoric.
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In 2007, Ford Motor Co. did something unexpected; it invited groups vehemently opposed to the automaker’s products to help Ford create a more environmentally friendly business model, particularly in the arena of fuel-efficient cars.

"It was our decision to approach those organizations with an olive branch," says John Viera, director of sustainable business strategies in Dearborn, Mich. "Our dialogue has been around moving from them demonstrating against us and us not speaking favorably about them, to getting in the same room, talking about the areas we disagree on, those we agree on, and moving forward."

Rainforest Action Network is one group Ford approached. "Our protest signs started to be their press release words," says Nell Greenberg, a spokeswoman for RAN. Since then, Ford has introduced cars like the hybrid Fusion and RAN has toned down its rhetoric.

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For many companies and activists, the old days of confrontation over picket lines and boycotts have given way to a new era of cooperation, particularly on environmental issues (labor initiatives remain less frequent). Some of these alliances are stronger than others. Still, activists and corporations are beginning to realize the benefits of turning foes into friends.

"These types of partnerships are increasingly common, and will likely remain so," writes Daniel Korschun, a fellow at the Drexel University’s Center for Corporate Reputation Management, in an e-mail. "Many companies initially approach nonprofits in order to reduce the risk that the nonprofit will create bad press or organize protests and boycotts. But these companies often end up discovering that fostering alliances with nonprofits is a terrific business opportunity."

Examples abound:

Clorox last year partnered with the Sierra Club to bring out its Green Works line of cleaning products.

•In 2007, PepsiCo hired a former executive director at the World Health Organization to direct its global health policy, including a program to put healthier drinks and snacks in schools.

Monsanto Co., a leading crop-protection and biotech company, launched a 2008 initiative partnering with multiple agricultural and conservation groups that will work with farmers to help reduce runoff from the Mississippi River into the Gulf of Mexico.

"We’re really seeing a shift from a period of avoidance and lobbying toward one of engagement and collaboration," says Richard Coughlan, senior associate dean of the University of Richmond’s business school. The trend will grow because it’s strategic for both sides, he adds.

For nonprofit groups, corporate partnerships can generate concrete results.

"We learned quickly that the best way to stimulate widespread change was to work with companies to improve their practices and purchasing decisions rather than boycott or oppose them entirely," says Abby Ray, a communications associate for the Rainforest Alliance, which has developed successful partnerships with companies like Kraft and Unilever to help them buy goods from farms and/or forests certified by the Rainforest Alliance.

The partnerships can be extensive. The Environmental Defense Fund (EDF) has worked with McDonald’s, DuPont, and FedEx. But its most intense partnership began in 2005 when Wal-Mart sought out the environmental group for advice on how to craft a better corporate responsibility plan. At the time, the megaretailer was getting lambasted for everything from killing small business to poor personnel management. The relationship grew closer as it shifted to strategy.

"Getting involved with Wal-Mart at the strategy-setting side has been a significant change from us saying ‘We don’t like what you’re doing,’ then they make a decision and let us know and we’d say ‘That’s good, but this would be better,’ " says Michelle Harvey, EDF’s project manager of corporate partnerships. "Now, they sit down and say, ‘Give us your thoughts on what we should do about this.’ It’s not that we direct it, but we have a greater potential to influence the direction they take." In 2007, EDF opened an office in Wal-Mart’s hometown of Bentonville, Ark.

For companies, partnering with nongovernmental organizations (NGOs) comes down to managing risk.

"The best risk-management practice is to identify places where there’s ambiguity about how activist groups will respond to an action," says Mr. Coughlan. "If you can get the [group] sharing that with you in advance of setting that strategy, you’ve done a service to the firm in reducing risk."

Of course, there’s still risk on both sides. The company’s programs can come off looking like a public-relations maneuver. Activists, who potentially gain access to resources as well as decisionmakers, run the risk of looking like sellouts.

"It’s a very fine line for the nonprofits to walk," says Coughlan. "Their missions sometimes get clouded when they get so close to the organizations they once worked against." The result is often a relationship of cautious optimism. "You can find examples of relationships built over years with good outcomes, but in 2009, 2010, most fall under the category of each side cautiously monitoring the other to make sure each side lives up to what they’ve promised," he adds.

When EDF and Wal-Mart started to work together, Ms. Harvey fielded many calls from angry EDF supporters and had to convince people at Wal-Mart "that we weren’t there to throw rocks at them." She now describes the partnership as "positive and productive." Neither EDF nor the other NGOs in this story take money for their corporate consulting. EDF relies instead on donor underwriting.

This activist-corporation dance can be delicate. In mid-decade, Oxfam and Starbucks formed a pilot project to improve conditions for Ethiopian coffee growers. Then, in 2006, the international relief and development agency launched a campaign to press the coffee conglomerate to recognize the right of Ethiopian coffee growers to trademark their product, thereby giving the African growers more control over their brand, and putting more money in the pockets of poor farmers. The NGO and the firm battled publicly until 2007, when Starbucks and Ethiopia signed a licensing agreement.

Now, Oxfam and Starbucks have put those tensions aside to work together (as part of a consortium of businesses and activists) on policy initiatives related to climate change, an issue hitting Starbucks’ supply chain in the developing world.

"What we have found is we get a lot more traction moving public-policy positions forward if we can bring a wider range of advocates to the table," says Chris Jochnick, director of the private-sector department at Oxfam America in Boston. "These NGO-private sector coalitions can be much more effective in terms of advocating for a position."

When a company the size of Wal-Mart, Kraft, or Ford makes even small voluntary changes, they create a huge ripple effect. Having such a powerhouse in the activist group’s corner helps strengthen its position when it comes to regulatory issues, too. Still, Harvey says nonprofits need to be mindful of "greenwashing" – corporate attempts to appear environmentally friendly without making substantial change – and of getting too cozy with the corporation.

"I think there’s a growing recognition whether you’re a for-profit or a nonprofit or a government agency, that we all want the same healthy, safe environment for ourselves and our family," she continues, "but I think there will probably always be a need for people with protest signs."

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