When Greens Go Corporate

As partnerships go, the current team-up between WWF International, one of the world's best-known champions of the environment, and French multinational Lafarge, the world's largest supplier of building materials, is an unlikely one. Under a three-year pact, WWF reportedly receives a sum of $2 million a year to advise Lafarge on shrinking its carbon footprint. Lafarge gets plenty of favorable publicity. The big question is what, if anything, the environment gets. Lafarge has a questionable record on greenhouse gases, and figures published last year showed that its CO2 emissions had risen 19 percent since 1990, boosted by the recent acquisition of a string of cement plants in China.

Small wonder that WWF occasionally agonizes about its policy of corporate engagement, now shared by many of its fellow nonprofits. "It's based on an economic assessment of how the market works and where is the best leverage point," says Maria Boulos, head of business and industry relations. "But we do sometimes wake in the middle of the night wondering what we are doing."

Indeed, it's a tough call. In the new green-tinted world, business and environmental groups are edging ever closer, with collaboration replacing confrontation as the favored means of saving the planet. Pressure from big investors and consumers, as well as a stream of new regulation, means companies can no longer afford to ignore eco-concerns. That has opened up a new and sometimes lucrative niche, offering businesses help in such areas as developing sustainable supply chains or cutting emissions. The value of global trade in environmental goods and services is forecast to rise 45 percent to $800 billion by 2015, and not all beneficiaries will be corporations. "In the past you were either an environmentalist or you were in the business of making money," says Paul Gilpin, a onetime Greenpeace boss now running a Sydney-based consultancy, with the U.S. chemical giant Du Pont and the Ford Motor Co. among its customers. "Now those artificial lines have faded." Gilpin and many others argue that corporate funding of green NGOs makes sense. But befriending the old enemy entails tricky compromises that hard-line greens still hesitate to accept.

It is a mark of how far the trend has come that the green NGO Environmental Defense now has an office inside WalMart's Bentonville, Arkansas, corporate headquarters (Wal-Mart shoppers who now buy fresh fish from sustainable stocks have the nonprofit to thank). "More and more companies are seeing this as a success story and want to get onboard," says ED's director of corporate partnerships, Gwen Ruta.

The lure of such relationships is obvious. Get alongside Wal-Mart at the senior level and there's an opportunity to influence the 60,000 companies worldwide that stock its warehouses. "One lesson that we have learned is the power of the supply chain," says Glenn Prickett of the U.S.-based NGO Conservation International, which has worked with the Starbucks coffee chain for almost 10 years. "It can send signals all round the world." Thanks to CI, some 60 percent of Starbucks coffee now comes from growers pledged to meeting a set of conservation and social goals.

Corporate money can also cross-subsidize other work. When Ikea wanted advice on sourcing timber it turned to Rainforest Alliance, an NGO that now derives about 25 percent of its annual revenue from certifying sustainable supplies, useful cash for its conservation work around the world. WWF in 2006 received more than $30 million from corporate funds, whether as gifts or in return for services. Pragmatism rules. "Sometimes we're like a consultancy, but we're working to a conservation agenda," says Prickett. If the company is committed to change, its cash is acceptable. In return for a "generous donation" to help save bee habitats, CI recently helped McDonald's with the launch of a "Bee Movie" Happy Meal, encouraging kids to study the environment in their own backyards.

But integrity and independence are always at stake. Can NGOs continue to campaign against corporate wrongdoing when they are taking corporate funds? If the arguments for collaboration are compelling for NGOs, they may be less clear to the public. "It's like pop stars appearing with politicians," says Tom Woollard, of the international consultancy Environmental Resources Management. "The politicians get a temporary increase in their street credibility; the pop stars appear slightly less cool."

Among larger NGOs, Greenpeace is rare in that it still depends wholly on private donations to fund its work. Yet many others remain ambivalent about getting into bed with business. Friends of the Earth will deal only with the most planet-friendly companies (one recent arrangement allowed the Eurostar high-speed rail service to use FoE's endorsement in its advertising). Environmental Defense won't accept donations from companies in sectors like automobiles or waste management, and total corporate contributions are limited to 3 percent of the operating budget. "The environment is our only client," says Gwen Ruta. "Business is our ally."

But business is an ally to be treated with extreme caution, say the skeptics. Well-meaning NGOs are too easily duped, says Michael Marx of the U.S. lobbying group Corporate Ethics. Smart companies will use the link to burnish their environmental reputation while making no changes in other areas. "Wal-Mart is now leveraging its good public relations around the environment to neutralize its bad public relations around labor relations and its treatment of communities." And there's a danger of unhealthy financial reliance as the NGOs seek to widen their role and must compete for funds. "A lot of NGOs are now almost totally dependent on corporate funding," according to the leading British eco-campaigner, George Monbiot.

Saving the planet will certainly prove an expensive business. The total budget for WWF in 2006 ran to $636 million, with more than 1,300 projects, including tree planting and World Bank lobbying. Multinationals, most agree, should pay their share. But persuading business to change its ways will take more than partnerships. When it comes to twisting arms in the boardroom, governments still have more muscle than NGOs.