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ESM 210 Strategic Environmental Management

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Title: ESM 210 Strategic Environmental Management


1
ESM 210 Strategic Environmental Management
Alliances with NGOs
  • Magali Delmas

2
Types of alliances
  • Corporate sponsorship
  • Firm contributes to the environmental group
    financially or in king through becoming involved
    in specific env causes or fund raising
  • Product endorsement
  • Environmental group approves a firms product as
    being ecologically sound
  • Task force
  • to develop economically feasible solutions for
    the greening of business practices

3
The context that leads to collaboration
  • Perceived crisis and shortcomings of adversarial
    approaches to problem solving
  • ex Lawsuits might take years and results in
    greater costs
  • Problems that are so complex that they require
    multiple actors to solve them
  • Disagreement over solution
  • Disparity of power/expertise among stakeholders
    in dealing with the problem
  • Environmental groups have expertise and public
    support but lack power of implementing solution
  • Each of the stakeholders have a vested interest
    in the problem

4
Nature Conservancy and Home Depot
  • Target of Rainforest Action Network campaign
  • Commitment to phase out wood purchases from
    endangered regions by 2002
  • Developed new procurement policies to trace
    origin of wood

5
The Home Depot Wood Purchasing Policy
  • The Home Depot will give preference to the
    purchase of wood and wood products originating
    from certified well managed forests wherever
    feasible.
  • The Home Depot will eliminate the purchase of
    wood and wood products from endangered regions
    around the world.
  • The Home Depot will practice and promote the
    efficient and responsible use of wood and wood
    products.
  • The Home Depot will promote and support the
    development and use of alternative environmental
    products.
  • The Home Depot expects its vendors and their
    suppliers of wood and wood products to maintain
    compliance with laws and regulations pertaining
    to their operations and the products they
    manufacture.

6
Home Depot
  • Conservancy helped Home Depot identify endangered
    areas
  • Connected company to legitimate wood suppliers
  • Timber tracking system

7
Pros of collaboration
  • Firm perspective
  • Access to complementary assets
  • Credibility
  • Green products are particularly hard to market
    because greenness is not easily verified by
    customers
  • Additional communication channels
  • Scientific knowledge
  • NGO perspective
  • Direct impact on firms behavior, potential
    ripple effect within industry

8
Turned Negative into Positive
  • Partnership received significant media coverage
    (CNN, Newsweek, major newspapers, etc.)
  • Raised profile with U.S. government
  • Recognition by Conservancy in magazine, web site,
    annual report
  • Praised by other NGOs
  • WWF is delighted that The Home Depot supports FSC
    and that the company is using its purchasing
    power to develop sustainable forest management
    around the world.

9
Conservancy Project Criteria
  • Consistent with values
  • Prefer companies with demonstrated commitment to
    environment
  • Impact at scale
  • Create best management practices
  • Action-oriented project with measurable outcomes
  • Minimum level of financial support

10
Metrics for the Conservancy
  • Philanthropic dollars raised
  • Increase in habitat protection with respect to
    the 10 year goal
  • Reduction in conservation threats
  • Conservation easements dollars saved

11
Partners of Nature Conservancy
  • 3M Alabama PowerAmerican Electric Power Bank
    of AmericaBPBurt's Bees CanonCargillCaterpill
    ar Centex HomesChevron Disney
    CorporationDominion PowerESRI ExelonGeneral
    MotorsGeorgia PowerGeorgia-Pacific
  • Hewlett-Packard The Home DepotJ.M. Huber
    CorporationLennox InternationalLowe's
    CompaniesMBNAMeadWestvacoMicrosoft Monsanto
    FundNestle Waters North AmericaOraclePacifiCorp
    Procter Gamble PSC New Mexico Royal
    Caribbean Second Nature SoftwareShell Tom's of
    MaineXerox Corporation

Some of The Nature Conservancys leading
supporters over the past 5 years. These companies
have provided support of 1 million or more or
are marketing partners.
12
ED and alliances for environmental innovation
  • Bristol-Myers Squibb - "MERGE-ing" the
    environment into new product development  
  • Citigroup - Reducing the financial and
    environmental impacts of copy paper use
  • Compass Group - Reducing the use of antibiotics
    in pork and chicken
  • FedEx Express - Building the next generation of
    pick-up and delivery vehicles  
  • McDonald's Antibiotics Project - Protecting human
    health by reducing antibiotics overuse in animal
    agriculture
  • Norm Thompson Outfitters - Improving catalog
    paper practices
  • SC Johnson - Implementing design-for-environment
     
  • Starbucks - Re-inventing the coffee cup  
  • UPS - Re-designing overnight shipping packaging

13
Cons of collaboration
  • Firm perspective
  • Negative backlash if the project fails
  • Confidentiality issues
  • How to retain the Intellectual property rights?
  • NGO perspective
  • Open to criticism that is becomes and ally of
    industry
  • Open to criticism that it looses neutrality

14
Issue of property rights
  • NGOs diffusion of practices throughout industry
    have incentives to diffuse information to as many
    other corporations as possible.
  • Example Greenpeace-Foron alliance. Foron did not
    keep control over property rights of Greenfreeze

15
Guidelines for alliances success
  • Selection of an environmental partner
  • Selection of project
  • Managing partner relations

16
Selection of an environmental partner
  • Env group should have an established philosophy
    favoring market based solutions
  • Env group should have a recognized, credible
    reputation
  • Ability of the parties to provide complementary
    assets

17
Selection of project
  • Keep alliance based on subjects that are far from
    firms IP (packaging for McDonalds)
  • Find organizational attributes that make
    Intellectual property difficult to transfer
  • Implement and market defendable goals and
    programs (beware of scientific uncertainty)
  • Strive for early movers advantages

18
Managing partner relations
  • Clear definition of objectives
  • Tasks clearly defined with deadlines
  • Bridge organizational cultural differences by
    building personal relationships
  • Frequent meetings both formal and informal
    facilitate cohesive linkages and build trust
    among partners
  • Maintain an arms length relationship formal
    contract
  • No exchange of money
  • Set-up conditions for ending up the contract
  • Confidentiality issues addressed

19
Exert from ED contract Expenses Termination
  • The Project will be carried out by appropriate
    Alliance and company name staff, and will
    require priority effort and time commitment by
    each of the Parties. The Parties will each bear
    all of their own costs and expenses in working on
    the Project, and company name will not
    compensate the Alliance in any way for any such
    costs or expenses. Meeting locations and other
    Project activities will be chosen to equalize the
    expenses of the Parties
  • Each of the Parties has the right to terminate
    the Project at any time. In such an event, the
    Parties will be free to comment on the Project as
    they see fit.

20
Exert from ED contract Confidential information
  • In order for the Parties to work effectively, it
    will be necessary for company name to disclose
    certain confidential information to the Alliance.
    The Alliance agrees that all information
    identified by company name at the time of
    disclosure as confidential will remain
    confidential and will not be disclosed without
    the written permission of company name or used
    by the Alliance other than in connection with
    this Project, subject to the additional terms and
    conditions contained in the Appendix. This
    confidentiality obligation shall remain in place
    until company name informs the Alliance in
    writing that the information is no longer
    confidential.

21
Conclusion on Alliances with NGOs
  • Work best in following context Perceived crisis
    and complex problems with disagreement over
    solutions
  • Provide firms with access to complementary
    assets (scientific knowledge and credibility)
  • But are risky in terms of use of information and
    how Intellectual Property is protected
  • Choice of partner project as well as design of
    alliance are key for success

22
This week Next
  • Wednesday Freeport Indonesia
  • Monday Sam Hitz 330-430
  • Wednesday Last day of class. Projects
    presentation
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