Environmental NGO’s and Corporate Sponsors

Two weeks ago the landscape architect Martin Barry was the keynote speaker at SUNY ESF’s George F. Earl Memorial Lecture. One of the things Barry discussed was his experience creating reSITE , which is an NGO that promotes the development of more livable and eco-friendly urban cities. One of the problems Barry experienced while starting the NGO was fundraising. Barry explained that without money from federal grants or local government organizations, many NGOs turn to corporate sponsor for funding (Barry, 2013).

This contradicts the classic image of environmental activists or “tree huggers” standing in front of a factory protesting, but that was 30 years ago. Barry’s discussion on NGO funding begged the questions of why would a corporation financially support an environmental NGO and why would the environmental NGO accept a corporation’s money.

Shell, General Motors and Coca-Cola are not names that usually come to mind when someone thinks about environmentally-friendly corporations. Last April, Shell spilled over 1,000 barrels of oil in Nigeria (Vidal, 2012). General Motors produces the Hummer, which gets nine miles to the gallon, making it one of the world's least fuel efficient cars (“Fuel Economy,” 2011). In 2005, Coca-Cola was banned in two states in India because high levels of the pesticide DDT were found in it's products (“Pesticides in Coke,” 2009). While all of these corporations have somewhat checkered pasts for not being environmentally friendly, they also are major sponsors or partners of environmental NGOs.

In the late 1980's and early 1990's NGOs and corporations began working together. With the rise in popularity of the green movement, many corporations saw this as an opportunity to make a positive impact on the environment. Environmental NGO’s such as the Sierra Club and Greenpeace decided to stop fighting corporations and collaborate with them (Murray, 2011).

One of the early collaborations was between FedEx and The Environmental Defense Fund. The two organizations worked together to reduce FedEx’s carbon footprint, by developing hybrid delivery trucks. NGOs like The Nature Conservancy and World Wildlife Federation began to receive funding from major corporations such as Shell and BP (Murray, 2011). These collaborations provided NGOs with the financial support that is required to run a major public policy campaign and corporations could become more ecofriendly and increase profits by becoming more energy efficient.

According to the Global Environmental Management Initiative (also known as GEMI), partnering with an NGO can reduce manufacturing costs for a company and increase the efficiency of production. The company can reduce energy consumption and production costs, which increases overall profit. Corporations can receive advice from NGO’s on topics that “they may not have expertise in,” such as renewable energy and recyclable materials. Both the NGO and the corporation can improve “the creditability” of each and expose both to new audiences (Global Environmental Management Initiative, 2008).

Some environmentalists claim this is just an opportunity to generate positive support from potential customers. Brendan May suggests that many of the collaborations between corporations and environmental NGOs are public relations events to gain brand support. Being labeled as environmentally friendly can garner customer loyalty and influence a consumer’s decision to buy one brand over another (May, 2011). Business journalist Johann Hari said corporations saw these collaborations as,

reputation insurance: every time they were criticized for their massive emissions of warming gases, or for being involved in the killing of dissidents, they wheeled out their shiny green awards, purchased with "charitable" donations, to ward off the prospect of government regulation. (Hari, 2010)

This relationship gives NGOs the opportunity to gain unprecedented financial support. The makers of Clorox Bleach made a deal with the Sierra Club in the 1990's that gave the NGO a percentage of the profits made from a Sierra Club approved household cleaning product. The Sierra Club’s Corporate Accountability Committee labeled the deal as an obvious conflict of interest, but Executive Director Carl Pope accepted the agreement anyway (Hari, 2010).

There are some problems in many of these partnerships. Radical environmental groups view corporate sponsorships of environmental organizations as “selling out." The problem NGOs must address is that their sponsor maybe responsible for the environmental damage they are trying to prevent. Environmentalist Sarah Murray said corporations could leverage their financial backing of many environmental groups to influence the NGOs policy-making decisions (Murray, 2011).

Johann Hari notes that a large portion of corporate donations given to environmental NGOs fund public relations campaigns and congressional lobbying. This money can hire more lobbyists, pay for 'stand up dinners' and be given as campaign contributions. Environmental groups are seen as experts in Washington that promote policies that protect nature and promote sustainability. This raises the question of whether the political influence of environmental NGO’s promote policies that improve environmental sustainability or the profitability of corporate sponsors (Hari, 2010)?

Some environmental NGOs such as Greenpeace and The Environmental Defense Fund refuse to “take a single penny from corporate or governmental sources because they maintain that it would compromise the integrity of their campaigns” (Vijayaraghavan, 2011). The recent recession has resulted in many environmental NGOs losing large amounts of money and private donations dramatically decreased. These organizations are being forced to rely on corporate donations to survive, but what can be done to ensure the integrity of these groups (Vijayaraghavan, 2011)? What is preventing corporations from turning these environmental NGOs into small clandestine public relations and lobbying groups?

Brendan May suggests that Congress should pass legislation that makes contributions to environmental NGOs transparent and limit the amount of money a corporation can donate to any single organization (May, 2011). This would restore creditability to environmental organizations and ensure that corporations do not control the NGOs decision-making process. May argues that if political campaign contributions are controlled and monitored, why aren’t the funding of NGOs and other lobbying groups? Without transparency there remains the possibility of corruption. Transparency would guarantee that environmental NGOs are working to protect the environment, not business interests (May, 2011).

The time when corporations and environmental activists were sworn enemies is long gone. They have now combined resources and efforts to promote sustainable development and prevent further damage to environment. Some have suggested legislation be passed to make the financial relationships between these two types of organizations transparent to ensure influence is not abused. Whether or not the intentions of both NGOs and corporations are sincere, is unknown, but since the two have begun to work together there has been unprecedented progress made in environmental protection and regulation.