Reyes AnnaNGO engagement with firm behavior can be varied and complex. There are four types of engagement strategies: direct compromise, direct coercion, indirect compromise, and indirect coercion. Examples of indirect strategies include research reports and policy briefings, while examples of direct strategies include protests, boycotts, disruptions, picketing, and occupations. In this section, we narrow our focus to strategies that NGOs can use to build mutually beneficial relationships with corporations to emphasize the positive impact of NGO activism on corporate value creation and environmental and social responsibility.
Consultations
To collaborate with companies on specific issues, NGOs often seek out specialized communities, networks, and knowledge. When companies start to engage with NGOs, it means the beginning of a learning process that creates new strategies to achieve economic benefits as well as benefits for society and the environment. Examples of this include the Environmental Defense Fund (EDF), which provides knowledge and expertise on energy issues; the Clean Water Network, which shares its extensive knowledge of water quality; WWF, which provides assistance in sourcing materials; and Conservation International (CI), which provides expertise in food and agriculture. NGOs can serve as consultants and advisors to help companies become more responsible and sustainable. These characteristics can have a positive impact on companies’ business operations,
Interactions between companies and NGOs provide learning and knowledge-sharing opportunities for firms that lack experience with certain innovations and new practices and regulations, or are unaware of the potential impact of uncertainty. NGOs often possess analytical and technical skills that can help corporations set standards, generate new ideas, address new challenges, and respond to other stakeholders. The World Resources Institute (WRI), for example, creates and curates datasets as part of its commitment to turning information into action.
However, there are also concerns about the accountability of NGOs in their role as advisors and consultants to multiple stakeholders. Some scandals in the NGO sector have been reported, such as misuse of funding, misconduct and lack of transparency in their financial systems.
Cooperation
NGOs and companies usually start the engagement process with different needs and perspectives. Communication helps both parties to balance their needs and expectations so that they can achieve common goals. NGOs and companies can develop mutual forms of cooperation based on their common interests and complementary resources.
For NGOs, a collaborative relationship gives them the opportunity to guide the company’s policies and activities, and thus achieve their own goals. However, there are factors that can potentially reduce the influence of NGOs. In contrast to antagonistic relationships with the same company, cooperative relationships can affect the independence of NGOs.
Shareholder activism
Although NGOs do not typically invest in stocks, in recent years activist NGOs have begun to either buy shares as their own (to participate in proxy meetings and other decision-making) or to find allies among other shareholders in companies to address their concerns and pressure companies to change. Institutional owners often find themselves called upon by NGOs to vote as proxies on a wide range of environmental and social issues, such as those related to diversity, climate change, pollution, waste, animal welfare, and others.