Some firms prefer to engage in adialogue in order to display the constraints to access NGOs’ demands (Burchelland Cook, 2013). NGOs are able to implement change by themselves with thesupport of companies and without the need of governmental policies that areoften considered too slow (Burchell and Cook, 2013). In 2006, a Dutch banknamed Rabobank got in contact with WNF (WWF for Netherlands) as the NGO wantedto create climate friendly credit-cards. The margin made on every card would beused to reduce carbon emissions.
This allowed Rabobank to increase its customerbase while being a more sustainable business with a better reputation due to theirpartnership with WNF. The initial reason pushingRabobank to adopt those cards being that they wanted to touch an environmentally-friendly customer base (Van Huijstee and Glasbergen,2010), and appearing as an ethical brand was the best way of doing so. This customer base is also used inother sectors such as the food industry. Evidence suggeststhat a lot of consumers feel better by buying ethical goods (Barnett,Cloke and Malpass, 2005) and are more value-centric (Doran, 2009), thereforecreating a new way to differentiate products for companies (Bhattacharya andSen, 2004). For example, even though free-range eggs are on average 25% moreexpensive than regular eggs, they account for 35% of egg sales which is an importantmarket share (Smith, 2008). This clearly shows the positive impact of the ethical product for theconsumer’s mind. The fact that NGOs raised awareness about environmental issuesand created a customer base (Smith, 2003) for those products, encouraged firms toswitch their production in order to make it more environmentally-friendly.
We seethis with other firms such as Innocent, Ben and Jerry’s or the BodyShop, dedicated to ensure business sustainability. 1. How is civil society’saction limited? It is legitimate to ask ourselves ifthe impact of NGOs is always positive. When an NGO acquires enough credibility,most of what the organisation says is taken for granted, as people tend totrust NGOs more than states or businesses (Gray, Bebbington and Collison, 2006).This was the case with Shell in 1995. The company wanted to proceed with a sea disposal of an oil platform, which was strongly criticized by Greenpeacebecause of the possible levels of pollution that this disposal could provoke ifthere was an issue (Giugni, 1998).
However, the data that Greenpeace transmittedto the public and the press was actually incorrect/(Mitchener, 1995). Greenpeace had to apologize a few months later fordelivering misleading information(Arts, 2002). This clearly shows that civil society’s action canlead to excesses because of a lack of accurate information. Even though NGOs are highly trusted, theyare not as regulated as a government institution and can make mistakes which candamage their credibility. As some NGOs are inclined to workwith businesses, others wish to maintain complete independence(Van Huijstee and Glasbergen, 2010). Some of NGOs’ demands are impossible toconsider as they are too radical or have the solepurpose of hurting the company. This was the case of Exxon Mobil, an oilcompany which was asked by Greenpeace to decrease its production of aparticularly polluting fuel.
The cost incurred by such change was huge and could potentiallydamage the firm even more than a boycott which led ExxonMobil to refuse each demand. No progress was therefore made on this issue,Exxon faced damage to its reputation and Greenpeacedidn’t manage toimprove sustainability performances (The Economist, 2003). Drawing on thatexample, we can argue that even if confrontation can sometimes be preferred toa dialogue, the NGO should be able to show an acceptable way for the company sothat both organizations are satisfied.
One of the main purpose of NGOs is to raise public awareness on issues which has an indirectimpact on their consumption (Kendall, Gill, and Cheney, 2007). Voguel (2005,cited in Smith, 2008, p.5) stated that “90% of consumers consider corporateresponsibility in their purchase and consumption behaviors”.
However, thisclaim is challenged by the reality of it. A 2004 European study showed that only 3% ofconsumers actually do change their consumer behaviour. This can be explained bythe fact that people tend to answer what is most socially acceptable to say insurveys (Vogel, 2005). Kendall, Gill and Cheney argue that: “The key is that stakeholder groups,such as consumers, perceive themselves as a group” (p.251). This clearly shows that raising awareness on those issues is not enough and if there is not ageneral movement about a product or brand, people may be discouraged inchanging their behaviour, thus limiting civil society’s action. 2.
Conditions ensuring an effective civil society’s campaign We will nowdetermine the conditions needed for successful civil society’s actions. First,we can say that the best way for NGOs to create a strong incentive forimplementing change in companies is to create a business case for CorporateSocial Responsibility. Smith (2008) defines: “The business case is often grounded in threekey drivers: that consumers, employees, and investors care in ways that createeconomic incentives for companies to give attention to corporateresponsibility.” (p. 2). This can be explained by the fact that civil society’spressures under the form of boycotts, letter-writings, protests, mediacoverage, etc.
can impact firms in such a waythat it becomes economically more interesting to implement change withoutresisting civil society. At a certain point, it is more relevant for allstakeholders to implement change, therefore satisfying everyone (Smith, 2008). Another key aspect that civil society shouldconsider before taking any action against companies istheir level of information about the targeted firms. Dialogue between civilsociety and firms is one way to improve it.
Arts (2002) argues that thosealliances allow NGOs to design the policies needed while companies benefit from an improved brand image due to theircooperation with an NGO. However, some NGOs prefer to stay independent and tokeep their distance with firms (Van Huijstee and Glasbergen, 2010). In thatcase, drawing on examples like ExxonMobil or Shell, it seems that keeping arealistic mindset about what can be done ispreferable.
This wasthe case for WWF-UK concerning the deforestationof the Amazon rainforest. The NGO had beencampaigning for years since the 1980s in order to get companies to engage inmore sustainable processes; yet they failedto obtain an international agreement. Because of a more aware public and theacknowledgment that the current wood business led toa dead-end, major suppliers engagedthemselves to respect WWF targets for sustainability (Murphy and Bendell,1999). Finally,if NGOs want to be able to have a lasting impact on companies, an accurate transfer of informationfrom the NGO towards the consumers and the media isrequired. Indeed, the only leverage possessed by NGOs is their means toinfluence consumer behaviour and the media sothat pressure is created around targeted firms (Kendall, Gill and Cheney, 2007).”Consumers are empowered to make decisionswhen provided adequate information by transparent institutions.” (Kendall etal.
, 2007, p.250). The use of numerous tools such as media coverage, websitesand social media in order to keep consumersupdated and to create generalized movements is key to NGOs success. We can now conclude that the main purpose ofNGOs and civil society’s campaigning is to promote business sustainability. Todo so, they use various tactics such as letter-writing, boycotts, dialogue,etc. in order to create incentives forcing the company to implement businesssustainability. However, those actions are limited as NGOs can sometimes be tooradical in their demands or poorly informedon the target company and consumers may notbe influenced enough to participate to ethical consumption, which can lead tocounter-productive results. Finally, we definedthe different conditions that differentiate successful actions from failedones.
Those conditions seem to be: a goodunderstanding of the firm’s constraints and assets, the creation of a strongenough business case for corporate social responsibility in order to please allstakeholders and finally the education ofconsumers and the media, byall means possible, in order togenerate global actions. Webelieve that when all of those conditions are gathered, civil society’scampaigning can be considered as effective in promoting business sustainabilityand therefore become a new type of governance in this globalized world.