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Partners in sustainability

Yashashree Gurjar says that corporations are realising that growing in isolation is just not viable any more because it will lead to shrinking markets and talent pools available in future

As globalisation gathers pace, the world around us is increasingly adopting collaboration as a way of doing things. A lot of the issues that organisations face today, whether they are businesses, government or civil society, cannot be resolved by any one individual entity. Business-to-business collaborations like co-branding are becoming common; so too are partnerships between businesses and NGOs.  

International institutions specialising in aid and economic development have recognised the value and importance of cooperation between sectors in promoting sustainable development. In December 2005, the United Nations General Assembly unanimously adopted a resolution, Toward Global Partnerships. The text of the resolution describes the joint role of organisations and businesses in the eradication of poverty and national development. 

One of the reasons why businesses are seen as having a big role to play in development is the diminishing role of government in the context of an increasingly ‘globalised’ international economy. In the last few decades, the world has seen the unprecedented power that corporations -- especially large multinationals (MNCs) -- have gained in terms of their access to resources and their ability to influence governments. 

Because of their ability to have far-reaching effects, there is a growing sense that business has a responsible role to play in promoting development. Simultaneously, NGOs are seeking new ways to achieve their goals. John Elkington and Shelly Fennell, in Partners for Sustainability, argue that NGOs worldwide have become frustrated in their efforts to improve environmental practices through legislation, and, as a result, some are attempting to work directly with business to achieve their goals. Quite simply, NGOs have realised that the participation of business is essential to the development of any long-lasting solutions. 

This expectation from various stakeholders, combined with the pressure to play an effective role in development, has seen many corporate organisations and NGOs getting into partnerships. 

Businesses and civil society (non-profit/activist) organisations are discovering that despite very different goals, they can often produce more impressive outcomes in collaboration than they can on their own. This type of relationship is based on the concept of mutual gain, in contrast with traditional business-civil society relationships based upon concepts of philanthropy or responsibility. A mutual gain process draws from traditional business concepts that link strategy to distinctive resources, capabilities and competencies. 

How corporations gain 

Partnerships with NGOs can bring many benefits to a corporation, an important one being management and reduction of risk. Relationships with NGOs can help corporations reduce general operating risks, and risks on specific projects. The NGOs represent stakeholders outside of the core corporate structure, and provide a sort of early warning network of potential problems with the activities of a corporation. 

Gaining competitive advantage is another area of benefit to the corporation. It includes understanding markets, new product development, building barriers of entry to other corporations through distinctive cause-related marketing in products that might otherwise be difficult to distinguish from each other. Corporations are using CSR and partnerships with NGOs as a strategic tool for business enhancement. 

Also, corporations are getting into partnerships in order to help resolve some of the social problems faced by developing nations -- poverty, illiteracy, lack of governance -- which, in turn, are seen to be crucial to their own development. Corporations are becoming more concerned about the health of the communities in which they operate. One unique advantage that NGOs offer their corporate partners is professional expertise to respond to the needs of communities in which corporations are or wish to be active. Corporations gain from this in terms of enhanced image and a social licence to operate. 

A number of corporations also see NGO partnerships as a way to strengthen their own corporate governance. An increasing number of corporations are using volunteer programmes or seconding their employees to NGO partners; this influences the company’s and employees’ attitudes towards communities and, by extension, influences the environment within the company. 

How NGOs benefit 

NGOs are quickly beginning to realise that there are several gains for them too in partnerships with corporations. Access to funds and the ability to influence the social agenda are some of the more immediate benefits of being in a partnership with a corporate body. Apart from these, there are several other benefits for NGOs. 

An NGO can benefit from the skills present in a corporation. Tadashi Yamamoto and Kim Gould in their article ‘Corporate-NGO Partnership in Asia-Pacific (APAC)’ (1999) illustrate how corporations in the APAC region are beginning to view partnerships with NGOs as beyond the traditional approach of philanthropy. “NGOs badly need certain management skills such as financial management, information technology, and strategic planning, which are essential to building a stronger institutional infrastructure. Strategic partnership with corporations provides NGOs with access to skills and training that they would otherwise not be able to afford.” 

Corporations are focused on bottomlines and therefore can bring to the NGO a sense of accountability, a focus on deliverables and the need to stress timelines. 

BILT-in partnerships for sustainable development 

Ballarpur Industries Ltd (BILT) is one of the largest manufacturers of paper in India. It is a part of the $3 billion Avantha Group which has a presence in ten countries. At Avantha, sustainability is about how the group develops its business towards ecological, social and economic viability. All of these are recognised as shared responsibilities within the group, enabling the continuous improvement of its operations. The sustainability of BILT’s operations is linked to its ability to address the issue of sustainable development of the communities it works with and the environment in which it operates. 

BILT has active partnerships with 18 NGOs across India, operating at six of its manufacturing sites. Most of these partnerships are focused on working in communities where BILT has its locations. 

Communities around the manufacturing units are one of the most marginalised stakeholders of BILT. Specific engagement strategies have been drawn up to empower them, helping them enter the mainstream of society and thus break through the poverty cycle. Due to the prevailing poverty in the area, BILT’s CSR programmes deal mainly with empowerment through livelihood-creation, education, health, and natural resources management. BILT reaches out to more than 250,000 people living in 270 villages and 20 urban slums. Annual stakeholder dialogues serve as an effective tool to incorporate feedback from communities and modify the strategy of involvement. 

As a manufacturing industry based in backward areas, there are several challenges BILT faces vis-à-vis the communities in which it operates. The NGOs are credible organisations that have been able to work with communities and convince them of BILT’s interest in community development; they have been instrumental in building trust between communities and the company. One of the most evident advantages of BILT’s partnerships with NGOs is its ability to handle community expectations, especially some of the negative impressions the community has of BILT. 

Sankalpa Bahu-Udeshiya Sanstha, a small grassroots-level NGO based in Maharashtra’s Vidarbha region, has been partnering with BILT for the last five years in developing a joint education intervention that started in ten villages and reached 300 children in its first year. Pre-intervention data in 2005 showed that 30% of children in the age-group 6 to 14 were out of school; even amongst school-going children, about 80% were unable to read or write well. Today, almost 98% of children in the 25 project villages can read and write well and also solve basic mathematics problems. School enrolment figures have reached 100%. The number of children out of school is almost zero. Till date, 7,000 children have been reached through this project. 

Over the last few years, BILT has directly partnered to form organisations within communities, such as farmers’ cooperatives and women’s credit cooperatives, and has seen them successfully manage programmes that are in the larger interests of their villages and communities. The community-based organisations (CBOs) start off as informal groups and go on to become village-level institutions; some get themselves registered so that they can access funds from several donors. All the 40 CBOs formed by BILT are working independently or with minimal support from the company. 

In 2003, women from Ashti village, Gadchiroli district, established their own credit cooperative society to fulfil the credit needs of an area where few banks were willing to extend loans due to the area’s ‘disturbed’ status. After successfully running self-help groups for two to three years, members of the groups had the confidence to start their own ‘bank’ to resolve the larger credit needs of the community. The credit cooperative started with a share capital of Rs 20,000, collected from 201 women members. Today, 375 women are members of the society which transacts loans at a volume of Rs 1 crore per annum. In fact, the total cumulative transactions of the credit cooperative reached Rs 8 crore as of June 30, 2009. This cooperative venture has made significant contributions to the lives of over 350 families that are proud members of the cooperative. It has been of huge value to the local economy which is now self-sufficient in meeting its credit needs. Such effective partnerships have been a win-win situation for all associated stakeholders. 

Overall, NGOs and CBOs gain from their partnerships with BILT not only in terms of funds to fulfil their development objectives but also in terms of capacity-building through training and exposure. BILT encourages volunteering; many employees regularly volunteer their skills in the community, making programmes more robust. 

Partnerships over the years have helped BILT develop programmes that reflect the needs and aspirations of each of its stakeholders. The focal point has been the transparency and openness with which BILT has dealt with its stakeholders, by engaging them in a dialogue process throughout the project lifecycle. Opportunities for communication and dialogue as a part of the partnership initiative with stakeholders, in areas where the company operates, are of immense value in fulfilling CSR. From these talks with individuals and groups the company can assess what is of interest and concern to every member of society. This allows the company to share its perspectives on social issues, which are then tied into an organisational approach so that what is learnt is reflected in the management goals of each unit in the company. BILT believes that this form of stakeholder engagement, in which the stakeholder is given a role and a say in what impacts him/her and the group, is a way to realise the goal of being a sincere, trusted company. 

Conclusion 

NGO-corporate partnership is an idea whose time has come. More so because CSR has become critical to the sustainability of the corporate sector as a whole. Corporations are realising that it is not enough for them to grow without society around them growing as well. Growing in isolation is just not viable anymore because it will lead to shrinking markets and talent pools in the future. Just as corporations have begun to realise that they need to be “part of a solution… and not part of the problem,” NGOs too have come to realise that the participation of the corporate sector is necessary to resolve the myriad problems faced by the country.

(Yashashree Gurjar is Chief Executive, Avantha Foundation)

Infochange News & Features, November 2009