Aron Cramer is recognized globally as an authority on corporate responsibility by leaders in business and non-governmental organizations. As President and CEO of Business for Social Responsibility (BSR), he advises senior executives of BSR’s 250 member companies and other global businesses. A member of Barrick’s Corporate Social Responsibility Advisory Board, Cramer spoke to Beyond Borders about the increase in public-private sector collaboration on sustainable development, discussing the reasons behind the trend and addressing some of the criticisms.
The relationship between businesses and NGOs has really flowered in the last 20 years and the reasons for that are many. One reason is that companies have begun to think more about how they can have a positive impact and avoid some of the challenges that often arise when big businesses operate in close proximity to local communities. A second reason is that more and more businesses are operating in places where the local government lacks capacity and, in some cases, the trust of communities that companies want to develop positive relationships with. Another reason is that NGOs are paying a lot more attention to what companies do, rather than focusing all of their energy on what governments do. Finally, there are more NGOs than ever before. The Economist estimated that the number of NGOs increased by 10,000 percent in the 1990s.
These factors have led to a significant increase in collaboration between businesses and NGOs. While these relationships have a degree of challenge and confrontation to them, I think businesses and NGOs recognize their respective goals can’t be reached if they don’t find ways to work with each other.
Walmart is one of several companies that have really made a sharp turn from a company that didn’t have a lot of respect from the NGO community to one that’s widely considered a leader. Beginning in 2005, Walmart really made sustainability a core part of what it was trying to do. It realized that it could leverage its immense influence as the world’s largest retailer to change not only its own practices but those of its business partners, who comprise some of the world’s largest corporations in their own right. General Electric (GE) is another good example. Its CEO, Jeffrey Immelt, made a famous speech in 2005 in which he said, “Green is green.” This was a reference to how the environment could be a real business opportunity for GE, and that really helped turn the company’s reputation around in the NGO community.
Most institutions — businesses, NGOs, governments — recognize that they each have their own unique contribution to make to sustainable development. At the same time, they recognize that building prosperity, preserving the environment, ensuring an appropriate degree of transparency are things that they can achieve best by working together. Sustainable development challenges are complex and multifaceted. Addressing these challenges effectively requires the kinds of investment and innovation that business brings, the kind of credibility and community engagement that NGOs often bring, and the good governance frameworks and credibility that governments bring. Alone, none of those sectors can achieve what they want and need to achieve. It’s only by working together that they can really ensure that the whole is greater than the sum of the parts of their respective contributions.
Without that kind of collaboration, important progress will be missed. Government can play an indispensable role by helping build partnerships that have tangible impacts. The Voluntary Principles on Security and Human Rights is a perfect example of government being an honest broker bringing NGOs and business to the table to improve practices in the extractive sector. Without government at the table, that partnership would not have worked and would not have gone as far as it did. So, the notion that government should somehow stand aside from the sustainable development challenge, from human rights issues, from environmental issues, from economic development issues is, I think, actually, a dereliction of duty on the part of government. I think, in the 21st century, the belief that big government and big business should sit behind Berlin Walls that completely separate them is outdated. The best opportunities for progress involve both of these key actors.
There’s nothing wrong with a company trying to preserve its reputation, so long as that effort is done on the basis of good work that is making a real difference with a degree of transparency. That’s fine. We live in a world where reputation matters and that’s more transparent than ever before. I think there is a huge risk to companies that are trying to furnish their reputations without the actions to back it up. The truth usually comes out. Governments should not be in the business of protecting any institution’s reputation. That’s not the role of government, but it does play a role in building the kinds of collaborations that, at least indirectly, do help various institutions demonstrate that they’re trying to roll up their sleeves and tackle important issues.
I think that public perception may have lagged reality in terms of the way progress occurs in the 21st century. We come from a world where, traditionally, the lines between business, government and other actors was very sharply defined. That world, in the eyes of many, is gone and yet I think that the public doesn’t always see it that way. Part of this may reflect the fact that we’re living in tough times and people feel vulnerable economically at a time when, quite frankly, corporate earnings of some companies have never been higher. So, I think that there may be a sense of anger and frustration at play.
The best partnerships I’ve seen have been very deliberately outcome-focused so that the reasons why all the parties are around the table working together are very, very clear. That’s absolutely crucial. The second thing that’s really important is to agree in advance on how to deal with differences of opinion because they will arise. The key is to have an understanding of how to work through those differences of opinion because very often that’s where the real value in a partnership comes from. Partnerships between organizations that see things exactly the same way sometimes aren’t as valuable as partnerships between organizations that see things differently, so long as there’s a way to resolve differences with the outcome in mind.
There’s no doubt that partnerships will remain indispensable. Without them, real progress on the most crucial sustainable development issues is simply impossible. The world is evolving in such a way that there’s often talk of producing shared value, but on the other side of shared value is shared influence. And, in this world, no single institution, no sector, has the ability on its own to make the kinds of progress that’s desired or needed. So, working in partnership is going to be even more important over the next 25 years than it has been the last 25. The companies, governments, NGOs that figure out how to do collaboration really, really well are going to have better results and are going to have a competitive advantage in this world.
Otto Farkas is the Director of Resource Development & Collaborative Innovation at World Vision Canada. He has extensive experience developing and managing partnerships with the private sector and government development agencies. He spoke to Beyond Borders about the evolution of World Vision’s collaboration with Barrick and the increase in multi-stakeholder development partnerships.
We have been partnering with the extractive industry for more than 10 years and we made this shift quite deliberately. Good development requires collaboration based on common goals and opportunities, and the UN’s Millennium Development Goals have also established the need for the private sector to play a role in development work. The extractive industry is already operating and investing in many communities where we operate, so it made sense to coordinate our activities. That led to collaboration with companies like Barrick on activities that complement what they are doing and what we are doing. We realize that we can do things together that we couldn’t be doing on our own, and that’s really the basis for partnering.
In Canada this may seem like something new, but the idea of multi-stakeholder partnering between the private sector, NGOs and the government has been around for quite some time and is a common practice. Donor governments, private sector companies and development organizations alike have recognized it makes more sense to combine resources and competencies to achieve development objectives. So public and private partnerships are an increasing trend for funding development around the globe. But it goes beyond funding. Government development agencies, like CIDA (Canadian International Development Agency), bring decades of experience when it comes to building national capacity. They have strong governance know-how and can help ensure that resources from mining, local governments and NGOs are distributed widely and used efficiently. Support from government donors like CIDA also helps us maintain a more neutral role in a context where we have to work with communities and local government actors.
We have a due diligence process that we follow that is based on external standards and internal review processes. Barrick, for example, provided us with a list of all the external certifications and standards that it subscribes to, and levels to which they have been implemented. We also engage regularly in discussions to exchange first-hand experiences that are garnered through our collaborative projects. We obviously need to protect our credibility and reputation as an NGO, and our desire is to work with companies that have community needs in mind-even those that have experienced challenges. This is an industry that is, by definition, intrusive to nature and communities so challenges will inevitably come. The question is how companies manage those challenges, and that is what we look for in determining who we want to work with. So, it’s about how companies continuously show there is a process of engagement, trust and transparency so that we can talk to each other and local stakeholders about issues. I think that’s the sign of a mature relationship, which is what we have with Barrick.