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Common and Conflicting Interests in the Engagements between Conservation Organizations and Corporations

"Conservation is primarily not about biology but about people and the choices they make."

Abstract: The conservation community increasingly views the corporate sector as a positive force for con- servation. Collaborations between corporations and nongovernmental conservation organizations (NGOs) seek to mitigate the negative effects of corporate activities and augment positive conservation outcomes. I reviewed the establishment of corporate social responsibility (CSR) policies by corporations; the emerging fo- cus on environmental practices and sustainability; and the history of engagement between corporations and nongovernmental organizations. I considered the ethical and reputation vulnerabilities of these collabora- tions, which depend especially on the financial nature of the relationship and reviewed how CSR approaches have influenced corporate practices. I concluded that whereas CSR practices can act to mitigate negative environmental impact, to date they have had limited positive effect on biodiversity conservation.


Keywords:  business, collaborations, commodity certification, conservation organizations, corporate social responsibility, corporations, impact mitigation, sustainability 

Introduction

Private companies, especially those that exploit natural resources, have traditionally been viewed by conservationists as destructive to natural ecosystems (Ehrenfeld 2003), yet today the engagement by conservation organizations with corporations is frequently seen as an effective strategy for conservation. Rose and Colchester (2004) provide a rationale for this engagement: “Perhaps the single most influential group when it comes to determining the future of the planet is the corporate sector. The land area under corporate management is vast. The extent to which people depend on businesses for their incomes and livelihoods is overwhelming. Single companies are wealthier than entire groups of governments.”

Fauna and Flora International, for instance, aspires “to creating an environment where business has a long term positive impact on biodiversity conservation” (FFI 2006). The Union for the Conservation of Nature states that “in a world  increasingly characterized by a global market economy, there are growing opportunities to harness the power of business to help deliver [our] Programme” (IUCN 2008). As it launched its new mission in 2010, Conservation International noted  that  “The  success  of CI’s new mission and strategic direction ... will depend in part on mobilizing private sector ingenuity and resources on behalf of healthy ecosystems.”

Corporations, for their  part, increasingly are expressing the idea that they have a responsibility to conserve the natural world, and a need to do so, because the loss of ecosystems and biological diversity pose serious risks to business. These ideas are consistent with corporate social responsibility (CSR) policies and practices, which started in the mid-1980s as voluntary initiatives designed to address social, environmental, and human-rights concerns arising from a corporation’s activities.

The Convention on Biological Diversity endorsed corporate engagement in conservation when it included corporations as active partners in its 2002 strategic plan to significantly reduce the rate of loss of biological diversity by 2010 (CBD 2005). That business has a role in conservation was endorsed again, by both national governments and civil society organizations, in The Economics of Ecosystems and Biodiversity Report for Business (TEEB 2010).

Nevertheless, the idea that companies might have this role, and that conservation organizations should engage with them, has been viewed with suspicion (e.g., Rose & Colchester 2004;  Brockington et al. 2008). It seems, therefore, appropriate to examine what companies can realistically contribute to the conservation of biological diversity and ecosystem services. What potential benefits can companies provide and what are the limits to what they can do? Are corporations limited to just mitigating their negative effect on the natural world, or can they actively and positively contribute to conservation? Do conservation gains justify the investments conservation organizations are making in establishing partnerships with corporations?

I review what led to the development of CSR policies and practices within the corporate community and examine what drives conservation organizations to engage with corporations (and the risks associated with that engagement). I also consider how much the interests of corporations and nongovernmental organizations (NGOs) are aligned and whether and when there are real opportunities to effect conservation. 

The Business Engagement with Conservation 

Corporate activities contribute to loss of biological diversity through their consumption of natural resources and conversion of natural areas to create systems more productive for humans. Businesses push to increase profits, and increasing profits depends in part on minimizing costs. Minimizing costs often leads to increased effects on natural systems. Defending the public good from these activities and promoting the sustainability of human endeavors is traditionally seen as the role of government and civil society (Shell Global Scenarios to 2025 [Shell International 2005] describes these different roles).

Although government’s role in regulating business activities and mitigating environmental damage was affirmed by the Stockholm Declaration (1972), the growth of multinational corporations and increased globalization (with its removal of trade barriers, and facilitation of the flows of goods, services, and labor) undercut efforts at national regulation (Ehrenfeld 2003). Regulation of the environmental effects of corporations shifted increasingly to international bodies (e.g., the European Union) and United Nations (UN) treaty organizations (e.g., CITES) (Mason 2005). Nongovernmental organizations counter- balanced business interests through their ability to influence consumer preference and choice (Brugmann & Prahalad 2007).

Corporations for their part argued against command-and-control regulation by national governments and promoted voluntary adoption of CSR policies and practices (Utting 2005). Rather than responding only to profitability and shareholder value, companies argued that by adopting social and environmental objectives, they could achieve a “triple bottom line” (accountable to “people, planet, and profit”).

Corporate social responsibility allows companies to engage constructively with conservation organizations in those organizations’ new role as de facto watchdogs. This detente was facilitated in the lead up to the Earth Summit in 1992 by the increasing acceptance of the concept of sustainable development (e.g., IUCN et al. 1991). Corporate social responsibility practices were seen as compatible with the proposed shift from an aggressive model of economic growth to a more sustainable model. The World Business Council for Sustainable Development (WBCSD) was established to develop the business case for companies to operate in the new global environment. Corporations argue that CSR programs allow them to tacitly receive a license to operate (i.e., approval from society to undertake business operations) (Earthwatch et al. 2002). By engaging with government and civil society in a positive way, corporations can avoid disruptions in their resource supply chain, manage their product life cycles more effectively, and mitigate other risks. Through CSR, corporations can act as good public citizens and potentially attract socially responsible investors, develop additional customers, and improve employee morale and productivity. “Corporate environmental performance is increasingly important to investors and therefore corporate  leaders”  (Rand et al. 2010). Finally, if CSR acts to reduce ecological risk, then corporate growth can be sustained.

Within the corporate community, critics of CSR practices worry that CSR could hurt profitability because achieving social and environmental goals has a monetary cost. Corporate social responsibility requires development of new areas of expertise, consultation with a new set of stakeholders, and development of new systems of accounting, monitoring, and auditing (Henderson 2001; Economist 2005). Corporations should stick, some argue, to what they do best: “The proper business of business is business. No apology required” (Economist 2005). Those who assume that unfettered capitalism is good for society consider CSR bad social policy. Henderson (2009), for instance, believes that establishing systems that are less efficient, less competitive, and ultimately less profitable will negatively affect the market economy and harm the public good (Henderson 2009).

These arguments have generally lost  traction. Many companies have adopted CSR policies and practices and defended them as contributing to the public good and more importantly to profits, if not in the short term, then certainly in the longer term (Porter & van der Linde 1995; Holliday et al. 2002). And by adopting CSR policies, a company can differentiate itself from competitors by adopting leading social and environmental practices and penetrating new markets.

Corporations justify collaborations with NGOs as necessary risk management to protect their reputations and markets and as a way to open up new markets, given the ability of NGOs to influence consumers. Brugmann and Pralahad  (2007) point to 3 areas of overlapping interests between companies and NGOs: development of CSR standards and joint regulatory mechanisms; marketing of products to environmentally and socially aware consumers, especially through cause marketing; and increasing overlap and sharing of management professionals between companies and NGOs.

The need to ensure that corporations that adopted CSR policies were not disadvantaged relative to their corporate competitors, and to improve accountability, led to the development of best business practices and standards. For example, the UN Global Compact was convened by the United Nations in 2000 to promote best practices within the corporate world. The International Council on Mining and Metals promotes standards (although they are far from being universally adopted) for mining and protected areas (ICMM 2003; Richards & Houston 2004). In the financial industry, the Equator Principles were developed in 2003 to oblige institutions that sign on to require their clients to abide by international environmental and social  standards.

Product certification provides another way to establish standards. The Forest Stewardship Council (FSC), established in 1993, and the Sustainable Forestry Initiative, established in 1995, certifies wood products as meeting environmental and social standards and requires establishing a chain of custody of wood and wood products. Nongovernmental organizations engage with certification processes by providing a third-party perspective. In the case of agricultural commodities, for instance, Rainforest  Alliance pioneered the certification standards for bananas in 1993 through their ECO-OK label. Standards for different agricultural commodities have been established through a commodity-roundtable process (which brings together commodity producers and buyers with conservation NGOs) (e.g., Round Table on Responsible Soy, Roundtable on Sustainable Palm Oil, Better  Sugar-cane Initiative, and Better Cotton Initiative).

Corporate social responsibility practices are also justified by corporations on sustainability grounds and because they position a business to take advantage of long-term environmental and social trends (Lubin & Esty 2010). As resources become globally  limited, CSR practices ready corporations to operate more sustainably. In a survey of 766 chief executive officers of companies in the UN Global Compact, 93% agreed that sustainability issues were critical to the future successes of their business, and 96% agreed that they needed to be fully integrated into the strategy and operations of a company (Lacy et al. 2010).

Outside the corporate community, CSR approaches are not without their detractors. The approach aligns with neoliberal philosophy, which is the belief in the efficiency of private enterprise, liberalized trade, and open markets to set economic, social, and political priorities, which are to be reached through voluntary and self-policing actions of corporations rather than the regulatory role of government. It is this characteristic of CSR that has most aroused critics. Newell (2008) for instance argues that corporations “are the principal beneficiaries of economic globalization and liberalization, [and] they are heavily implicated in reproducing social exclusion and inequality.” As belief in markets has become the dominant philosophy in national economies, the concerns are that “legal and governance institutions have prioritized the strengthening and realization of global rights, and not their obligations” and that “the unchecked growth of corporate power enabled by global trade rules...put profit before labour rights or environmental protection.” As Utting (2008) opines, CSR creates “a vibrant side  show... that runs the risk of diverting attention from aspects of public policy, regulation and democracy needed to tame corporate capitalism.” Newell  (2008) agrees: “The rise of CSR is in no small part a move to offset and preempt regulations aimed at ensuring minimal standards of social and environmental protection.” These critics tend to argue for strengthening corporate accountability and the regulatory role of government and elaborating the role of public policy and law.

Those critics who assume capitalism as a whole is detrimental to society are especially incensed. “Capitalism is turning the environmental problems it creates into opportunities for further commodification and market  expansion” (Igoe et al. 2010). In this view, CSR furthers the corporate agenda  and is not a constructive corporate response to social and environmental concerns. Bakan (2004) argues that because CSR is driven by corporate interest and corporations adopt standards voluntarily, it is essentially a sham designed to avoid appropriate regulation. These critics consider the adoption of CSR policies and practices as self-serving efforts to maintain access to resources, find new markets, and increase profitability (MacDonald 2010; West 2010).

Corporate engagements with NGOs, according to this argument, are a cynical way to increase profits. Igoe et al. (2010), for instance, characterizes them as an expression of the new hegemony of the ruling elites and an expansion of the neoliberal agenda. The marketing of new products and consumptive experiences to new consumers is seen as a fresh commodification of nature and a novel exploitation of the toiling masses (Igoe et  al. 2010; MacDonald 2010; West 2010). The “motivation for business to engage with conservation organizations lies .. .squarely in the need to control their own external environment to retain access and use rights to strategic resources and to accommodate the institutional demands as cheaply as possible” MacDonald  2010).

The Conservation  Engagement with Business

One of the first collaborations between conservation NGOs and corporations, that of the Environmental Defense Fund (EDF) and  McDonald’s hamburger chain in 1990, aimed to improve McDonald’s packaging and waste management. The goal of the partnership was to benefit the environment without affecting the company’s bottom line, and to address the environmental issues created by the company’s operations. The EDF adopted a policy not to accept any funding from its corporate partners so as to avoid conflict of interest, though it requested, in the interests of advertising best practices, that the partners promote their joint work.

Another example is Fauna and Flora International’s collaboration with Rio Tinto, which was established in 2000 to mitigate the effects of mining operations. Specifically the aim was to support the development and implementation of biodiversity offsets (i.e., actions compensating for adverse environmental effects), improve stewardship of natural resources, and enhance local livelihoods. Fauna and Flora International (2006) describes their  approach as one that encourages corporations to develop and adopt “policies, strategies and practices that minimize their impact on the environment, support a precautionary  approach to environmental issues management, and are transparent and open.”

A further rationale for engaging with corporations is to encourage them to have a positive effect on biological diversity (not just ameliorate negative effects). A belief that this is possible is evident in IUCN’s (2004) vision for “a sustainable economy”: among other entities, “firms ... would  freely  invest in activities that improve welfare, reduce inequality and conserve the environment for both present and future generations, not out of charity but because doing so would make them better off both materially and morally.”  In Building Biodiversity Business, which reports on a study sponsored by IUCN and the Shell International oil company, Bishop et al. (2008) argue it is possible “to align conservation and commercial objectives” by mobilizing “significant private investment in sustainable biodiversity business, through appropriate use of market-based instruments.” The same optimism is found in the following IUCN (2008) statement: The “rising pillars of a sustainable future include: environmental economics, environmental markets, new ways of measuring  environmental impact, renewable energy technologies, ecotechnologies, payments for ecosystems services, biodiversity offset schemes, innovative approaches to applied ecology in industry, and new action networks for sustainability.”

The TEEB Report for Business  (TEEB 2010) builds the case that the conservation of  biological diversity and ecosystem services offers profitable opportunities for corporations and lauds the development of new markets  for ecosystems services and biological diversity credits (from certified agricultural and forest products, to payment for ecosystem services, to  biodiversity offsets) and identifies REDD+ (Reduced Emissions from Deforestation and Forest Degradation plus conservation and social  benefits) as a major market  opportunity. The TEEB Report recognizes that the increased development of these markets requires business-oriented regulatory and policy reforms. In this vision, the role of government is to provide an efficient enabling and fiscal environment for business investment.

This argument posits that if conservation action could become part of day-to-day commerce and of the  economic  lives of all people, then conservation would not depend on government funding and charitable contributions. The TEEB Report (TEEB 2010) explicitly makes this case:  “Purely charitable approaches to nature conservation, based on appeals to moral, ethical, or religious values, are unlikely to mobilize significant private investment in biodiversity conservation in market-dominated economies,” and “conservation and commerce.. .must work hand-in-hand if biodiversity loss and ecosystem decline are to be slowed and ultimately halted. Although business is often responsible for environmental damage, efforts to make business part of the solution to biodiversity loss are likely to involve more not less business involvement in nature conservation and environmental management.”

The language in many collaborative agreements emphasizes these net positive consequences. The Nature Conservancy’s corporate partnerships, for instance, link marketing and sponsorship (creating “unique marketing alliances with corporations that share our commitment to conservation” [TNC 2012]). Many collaborations are designed to align the NGO and the corporation around a set of common aims, sometimes creating new markets and new  products that have positive conservation outcomes. The Pew Center’s Business Environmental Leadership Council was founded in 1998 with the belief that business engagement is critical for developing efficient, effective solutions to undesirable effects  of climate change. In 2001 Conservation International and the Ford Motor Company created the Center for Environmental Leadership in Business “to engage the private sector worldwide in creating solutions to critical global environmental problems in which industry plays a defining role” (Ecosystem Market Place 2012). The center is particularly active in seeking to engage corporations in investing financial and other resources in conservation of biological diversity.

Some conservationists, however, argue against corporate engagement in conservation because it requires that biological diversity and ecosystem services be commodified (breaking the ecological whole into separate natural commodities). Commodification is a prerequisite for the use of novel financial mechanisms (e.g., payment for ecosystems services, biodiversity offsets, carbon  trading, species banks). Commodification, by definition, does not place value on the ecological whole, favors only certain components of biological diversity, and subjects conservation to the vagaries and instabilities of marketplaces (e.g., Callicott  1989;  McCauley 2006;  Redford  & Adams 2009). Social scientists are also critical of commodification on the grounds that it fetishizes natural resources (i.e., disarticulates them from the social and cultural context involved in their harvest and production [Carrier 2010]). There are also concerns that as components of nature enter the marketplace, the asymmetries in knowledge, skills, and power tend to work against  poor or otherwise marginalized people (Kosoy & Corbera 2009; Castree  2011).

Some believe NGOs involved in collaborations with corporations are selling out to corporations to get access to their money. MacDonald (2010) opines that the “motivation for conservation organizations to engage with business resides in organizational responses to resource scarcity and the need to demonstrate ideological alignment with a new institutional context.” To these critics, the conservation community is being swallowed up by the private sector and becoming a shell for corporate interests (e.g., Igoe et al. 2010). MacDonald (2010) portrays the relation between NGOs and corporations as so asymmetrical that an organization such as Conservation International, which has a “direct  ‘partnership’ arrangement with Walmart focused on energy and waste reduction and the development of products geared towards an ‘environmentally conscious consumer’ ... [is] in essence doing the work of cost reduction and products development for one of the world’s largest  corporations.”

I would challenge both these interpretations of motivation and the role ascribed by these critics to conservation organizations, but NGOs must be sensitive to ethical and reputation risks  associated with  ngaging with corporations, especially when they accept funding from these partners. Although there is a stated consensus among conservation organizations that “fundraising from the private sector is not considered ... the main goal of engagement” (IUCN 2004), there is also a recognition that funding is necessary for the program of work with corporations, NGOs are providing a service to corporations that should be compensated, and corporations have the financial resources to support the mission of the NGO.

Table 1 outlines some of the more common relations between NGOs and corporations. In cases where there is no financial transaction between the 2 entities, the ethical and reputation risks to the NGO are low.  When corporations provide philanthropy, which is typically seen as enhancing their internal and external reputation (Porter & Kramer  2002), the risk to the NGO is in associating with a specific corporation and its business, especially when the business advertises or promotes the collaboration. If in addition to accepting funds for its programs, the NGO endorses corporate products, it exposes itself to the charge of “green washing” (i.e., enhancing the corporation in exchange for funds), especially if the standards of endorsement are unclear.

Another and increasingly common form of collaborationis one that aims to minimize, mitigate, and offset the environmental effects of the business’ operations. In this case, NGOs provide technical assistance to help implement corporate CSR practices and improve sustainability. Typically, corporations provide funding to the NGO, although these funds do not always cover the full costs of the latter’s engagement in the specific initiative. Companies might benefit from these collaborations through changes in their operations, but these kinds of collaboration do not aim to improve the business performance of the company per se. As long as the NGO hews to its mission, the risk to its reputation is low. The NGO is not immune from criticism, although that criticism is usually more about its naivete´ (in believing that  it can change corporate practices) than its malfeasance.

Another form of collaboration is when the corporation, in addition to asking the NGO to help implement CSR policies, provides philanthropic funds. In these cases, the criticism is that the NGO will not fully seek to mitigate the environmental effect of business operations or ignore corporate transgressions because it receives corporate funding. Nongovernmental organizations have been accused of being bought  off (e.g., Hearn 2008) or getting too close for comfort (i.e., blurring the differences beween the agendas of collaborators), issues explored in a different context by Edwards and Hulme (1996). This blurring of the interests of corporations and NGOs is most fully expressed in joint ventures, a form of collaboration that has ethical and reputation risks for NGOs because complete endorsement of the private sector’s business practices may be assumed.

Table 1 (Scroll across to read).

Types of relations between conservation nongovernmental organizations (NGOs) and corporations.

Relation

Example

Defined by

Activity

Ethical and Reputation risk to conservation NGO

Reference

Dialogue/negotiation

Environmental Defense Fund and McDonald’s

agreeing to a common conservation agenda

improve McDonald’s packaging and waste management; implemented joint studies, independently funded, of source reduction, reuse, recycling, and composting

little risk

McDonald’s & EDF. 1991

Charitable or philanthropic support

Conservation International and Total Foundation

receiving charitable or   (rather than funding from the business side of the corporation)

study of reef ecosystems in New Caledonia

criticism for accepting funds from corporations with controversial reputations

http://www.conservation.org/how/partnership/corporate/Pages/total_corporate_foundation.aspx

(June 2012)

Philanthropic support plus product endorsement

Sierra Club and Clorox (Green Works products)

receiving philanthropic funding from the corporation and endorsing corporate product

Sierra Club endorsed Green Works, a biodegradable bathroom cleaner, and received philanthropic support from Clorox

funding seen as compensation for providing corporation with a better environmental reputation

http://www.sierraclub.org/greenworks/

and

http://www.nytimes.com/2008/03/26/busi-ness/businessspecial2/26cleanser.html

(accessed June 2012)

Collaborations to promote better corporate practices to mitigate environmental effects

World Wildlife Fund (WWF) and Cargill food products

contracting with corporation to support activities that benefit conservation and (typically) the business

ameliorate negative effects of beef production; WWF received Cargill support for studies of beef life cycle and Cargill sponsored (with Intervet, JBS, McDonald’s and Walmart) the global conference on sustainable beef in 2010; Cargill seeks to benefit from changes in beef- production methods

criticism for working with corporations or corporate sectors with controversial reputations

http://www.cargill.com/connections/fertile-ground-wwf-beef-%20palm/index.jsp

(accessed November 2010); http://www.sustainablelivestock.org/

(accessed January 2011)

 

Wildlife Conservation Society (WCS) and Congolaise Industrielle des Bois (CIB) forestry company

contracting with corporation to support activities that benefit conservation and (typically) the business

ameliorate effects of forestry operations in northern Congo on biological diversity and society; WCS received substantial in-kind funding from CIB (also from multilateral and bilateral funders and government of Congo); CIB benefits from selling certified wood products

criticism for working with corporations or corporate sectors with controversial reputations WCS characterized as being a “volunteer cheerleader for a billion dollar industry of exploitation”

Elkan et al. 2006

Peterson 2003

Collaborations plus philanthropic support

WWF and Coca-Cola

contracting (typically with corporate business unit) and receiving philanthropic support (typically through foundation associated with corporation)

Coca-Cola contracted WWF to improve efficiency of its water use, cut energy consumption in its manufacturing, refrigeration, and fleet operations, and improve the sustainability of the company; Coca-Cola established the Polar Bear Support Fund to support WWF Arctic initiatives

perception that NGO can be bought off (i.e., NGO does not fully commit to improving business practices because of the danger that it will lose philanthropic funding

http://polarbears.thecoca-colacompany.com/polarbearsupportfund/index.jsp

(accessed October 2010)

 

The Nature Conservancy (TNC) and British Petroleum

contracting with corporation and receiving philanthropic support

identified ”no touch” areas for development on the basis of TNC’s Development by Design method; optimized efforts to mitigate environmental damage; and TNC accepted general philanthropic support

perception that NGO can be bought off following BP oil spill in Gulf of Mexico, TNC accused of slow response to criticize BP

Kareiva 2010; Streep 2010

Zerbe 2010

Joint ventures

TNC and forest landowners (The Forest Bank)

NGOs and corporations or private individuals undertake joint investments and marketing of products or services with shared risk and shared return

TNC provided forest management services to forest owners and guaranteed annual income in return for a permanent conservation easement

relation assumes complete endorsement by NGO of the private sector’s business practices

http://www.nature.org/ourinitiatives/regions/northamerica/unitedstates/indiana/placesweprotect/blue-river-project-the-forest-bank.xml

(accessed October 2010)


 

The Potential of CSR to Help Realize Conservation

The motivations for conservation organizations and corporations to collaborate are very different. The reputations of NGOs may be affected by their associations with corporations, but the aspiration is that there are opportunities to change the way natural resources are harvested or how global commodities are produced, processed, and consumed. Whether this aspiration is realistic can be explored in the following questions:

Do CSR initiatives contribute to conservation? Some businesses, such as those active in carbon trading  or ecotourism, do contribute positively to conservation (Bishop et al. 2008). In other instances, companies may seek to offset the negative effects of their activities at one site by furthering conservation at other sites (e.g., Hardner & Gullison 2005). Most businesses, however, consume natural resources, and CSR initiatives are limited to promoting the sustainability or minimizing the environmental effects of corporate operations. Statements by NGOs (e.g., IUCN 2004) acknowledge this limited  aspiration when they describe collaborations as efforts that help “to achieve conservation through, and alongside, sustainable development” (emphasis added). Sustainable development, in this case shifting business operations away from a focus on short-term economic growth, contributes to, but is not the same thing as,  conservation (Robinson 1993). In these  cases, even if corporations establish strong  CSR practices, their activities will still generally continue to degrade the natural  world, albeit at a slower rate.

Is the adoption of CSR policies changing the  operations of individual corporations in practice? Despite the increasing prevalence of environmental CSR policies, few studies have  examined their effect on corporate practices. Results of those that have (e.g., Kemp 2001; Gullison 2003;  Fig 2007; Paoli et al. 2010;  Watson et  al. 2010;  Friedman-Rudovsky 2011) show a significant gap between theory and practice and between policy and implementation. There are legitimate reasons for the difficulty of operationalizing CSR policies. Corporations have been constrained by the lack of information on the environmental effects of their operations; the difficulty of reflecting true environmental and social costs in the value of their commodities; the failure of financial markets to value risk reduction and long term sustainability; and the fact that policy frameworks do not provide appropriate economic incentives (Mason 2005). In addition, the requirements of financial disclosure and environmental liability generated by CSR policies mean new accounting standards have to be developed. And corporations remain constrained by stockholders’ demand that the adoption of CSR policies not affect profit. What this means is that even for those corporations that have taken a leadership role in developing CSR policies, and some companies have invested significantly in the effort, the gap between general policy and real practice is often large (Doane 2000; Conley  & Williams 2005). Often what corporate leaders espouse is not understood or is considered not feasible at an operational level.

Is CSR being adopted widely enough across the corporate sector to have a substantial conservation effect? One measure of extent of adoption is corporate disclosures of social and environmental performance. Although reporting is often thought of as just a form of reputation assurance or corporate communication, there is an increasing trend in the proportion of Fortune 500 companies producing environmental and sustainability reports (Doane 2000; Conley & Williams 2005). However, the proportion of the corporate sector that has adopted CSR policies is still tiny.  In an analysis of social and labor policies of corporations, Utting  (2008) concludes “the number of companies seriously engaged with CSR is a small fraction of the universe of TNCs” (transnational corporations). Globally,  the total number of transnational corporations and affiliates of transnational corporations is 78,000 and 780,000 respectively, whereas the largest  CSR initiative, the UN sponsored Global Compact, has approximately 3,600 participating companies and includes only one fifth of the Fortune 500 companies (Utting 2008). Yet the bar to membership is not high. The Global Compact suggests annual donations from companies with annual sales or revenues of >$1 billion be $10,000. For companies with sales or revenues between $250 million and $1 billion the suggested amount is $5,000, and for those with sales or revenues <$250 million, the suggested amount is $500.

Has NGO engagement with corporations contributed significantly to the adoption of CSR policies and  practices? Because of their disproportionate effect on the world’s resources, NGOs have focused on large corporations. In his 2010 TED lecture Jason Clay, vice president of World  Wildlife  Fund, said, “One hundred companies control 25% of the trade of all 15 of the most significant commodities on the planet. We can get our arms around 100  companies. One hundred companies we can work with.” Large corporations also have a public  brand and can differentiate themselves from competitors by being responsive to labor conditions and the effects their actions have on the environment. The NGO strategy has been to “identify the best and move the rest” (Clay 2010) (i.e., focus on the corporations with the strongest brands and influence and hope to shift the corporate behavior of an entire business sector).

For example, Walmart has adopted strong environmental-sustainability policies and because of their market power and large number of suppliers, they may influence many other companies to adopt similar practices. However, once a company defines itself as environmentally responsive, other companies may be actively discouraged from doing so because they may seek to differentiate themselves in the marketplace. For example, Gallagher and McWhirter (1998) argue that the Rainforest Alliance’s ECO-OK certification of Chiquita Banana discouraged Dole and Del Monte from seeking that same certification because the environmental label had already been captured.

Empirical evidence is lacking on how much of the observed association between leading companies and the adoption of CSR policies (GEMI & EDF 2008; CECP 2010) is driven by the NGO providing technical and strategic advice and how much is driven by the corporation’s marketing strategy to associate the company with a reputable NGO brand.  Similarly, it is unclear whether there is any form of a “race to the top” (i.e., companies competing to improve their environmental reputations).

Can lessons be drawn by  conservation professionals from examples of CSR effects on labor and human-rights practices? Corporate social responsibility efforts to promote fair social and labor practices have a longer history than environmental efforts.  Many companies have adopted social and labor policies, but analysts generally have been unimpressed by the implementation of CSR policies (Conley & Williams 2005;  Blowfield  2007). Partly this is because CSR implementation is voluntary and partly it is because individual corporations have less than full control over the actions of their suppliers. Typically, companies have been involved in a “race to the bottom” by relocating to countries where labor standards are low and government regulations and enforcement are weak and by pressuring subcontractors and suppliers to reduce costs (Locke et al. 2006; Utting 2008). The “reality or perception [is] that CSR has largely failed in terms of scale, scope and the development of effective instruments” (Utting 2008).

Interests in Common or in Conflict

Optimism yet remains in the conservation community. Most successes are in industries where mitigating environmental effects improves corporate profitability and sustainability. But the effect of CSR has been limited because a very low proportion of companies have adopted CSR practices and reported on them, albeit the ones that have tend to be large and leaders in the field. To date there has been little empirical evidence that engagement with corporations to promote CSR is an effective strategy to conserve biological diversity and ecosystem services (although the case is stronger for mitigation of negative environmental effects). The aspiration remains, nonetheless, that more companies will adopt CSR policies and implement them.

Is this aspiration justified? The focus of corporations on sustaining economic growth rather than conserving natural resources is unlikely to shift; to make such a shift runs counter to making a profit and shareholder interests (although there is a case for altruistic CSR, which decreases profitability [Lyon  & Maxwell 2008]).  Most analysts are skeptical that CSR practices will be widely adopted unless there is development of international and national legal structures and governmental regulation and enforcement (Mason 2005;  Utting 2008). Without legal requirements and enforcement of CSR, corporations are unlikely to change corporate behavior if it decreases profitability (Knorringa & Helmsing 2008). In today’s market- dominated economies and the political context of corporate libertarianism, widespread adoption of CSR therefore is not likely in the near term. There is a role for consumer activism and social movements (Bond 2008) to prod individual companies and whole corporate sectors in more socially and environmentally positive directions, but the control exerted by the private sector over information flow through advertising and media control make this a limited option. For conservation organizations, therefore, I conclude that the evidence suggests that they should not rely on corporations to meet conservation goals.

That is not to say that conservation organizations should not engage with companies or that engagement should not be part of an NGO’s portfolio of activities. Companies have huge social and environmental effects in the places where they operate. Some companies can contribute positively to conservation, and encouraging these business models is important. In other cases, environmental effects can be offset if companies can be encouraged to invest in conservation at other sites. There are opportunities for business operations to substantially reduce their negative effects on biological diversity and ecosystem services (although most will  continue to degrade natural systems, albeit at a slower rate). To date however, positive conservation outcomes resulting from NGO engagement with corporations, as opposed to just mitigating negative impacts, have been limited. 
 

Acknowledgments 

A sabbatical hosted by Nigel Leader-Williams at Churchill College and the Department of Geography, University of Cambridge, provided the  opportunity to develop some of these ideas. I thank B. Adams, E. Bennett, H. Crowley, J. Hilty, K. Redford, S. Sanderson, T. Thorn, R. Victurine, J. Watson,  P. West,  and reviewers for challenging comments to earlier drafts.

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________________________________

JOHN G. ROBINSON
Wildlife Conservation Society, 2300 Southern Boulevard, Bronx, New York 10471, U.S.A., email: wildcons@gmail.com

Conservation Biology, Volume 00, No. 00, 1–11
C 2012 Society for Conservation Biology
DOI: 10.1111/j.1523-1739.2012.01914.x

Paper submitted August 18, 2011; revised manuscript accepted May 9, 2012.

Note: See also http://www.justconservation.org/way-beyond-greenwashing for another discussion of the risks associated with certain types of corporate engagement.

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