How to tackle attacking NGOs

<div class="section1"><div class="Normal">Being the boss of a big company besieged by indignant activists is not much fun — though it is increasingly a fact of life. Mention, say, Greenpeace, to a typical boss and he will often turn apoplectic. <br /><br />Still, a growing number of executives are concluding that it is better to get along with the lobbyists than to attack them.Look at the rapid spread of activist-friendly corporate social responsibility policies or listen to Lord (John) Browne describe how green nowadays is his firm, BP — even if it makes money selling oil.<br /><br />Consider, the lengthening lists on the "Victories" pages of the websites of campaigning groups such as the Rainforest Action Network. Among its trophies is Citigroup. <br /><br />RAN campaigned to get the giant to adopt policies to reduce habitat loss and climate change, urging customers to cut up their Citicards and plastering the internet with nasty jibes against named executives. In April, RAN announced a truce, claiming that Citi had agreed to what it wanted. <br /><br />In the contest between NGOs and companies, size is no advantage. Nor is being in the right. NGOs are pursuing campaigns within America''s friendly legal system.<br /><br />So, what is the best policy for a firm attacked by such NGOs, which, in contrast to the many NGOs that simply get on with doing good works, aim to force firms to change by deluging them with bad publicity? Should the NGO be attacked, ignored or befriended? The answer may vary, depending on the kind of business a firm is in — and the nature of the NGO.<br /><br />The memory of a campaign may linger, but evidence of damage is scarce. Few customers of Citigroup seem to have cut up their cards. Craig Smith of London Business School studied the impact of an NGO campaign against a big European food firm and found that sales initially dropped but recovered within a few months.<br /><br />It can sometimes make sense to co-operate with NGOs. Some firms will incur lower costs than others, or even gain, if they capitulate quickly rather than fight, argues Debora Spar of the Harvard Business School.<br /><br />Thus, it may be relatively cheap for a firm such as Nike, harried by activists for employing children to make its sports shoes, to accommodate the demands of NGOs by switching to other suppliers. But the cost for ExxonMobil to reduce production of fuels that may contribute to climate change, as Greenpeace says, would be huge.<br /><br />But, notes Spar, it may still pay for such firms to talk to activists when they can gain competitive advantage as a result. For example, Exxon worked with a large number of mainly local NGOs in Chad and Cameroon to plan the development of oil extraction in Chad and the course of a pipeline.<br /><br />The biggest risk in talking to NGOs is that a firm may become a bigger target. BP, which has worked hard to build a dialogue with a dozen NGOs, is arguing about the construction of a pipeline between Azerbaijan and Turkey that environmentalists think will breed conflict, corruption and horrors. <br /><br />In June the American Enterprise Institute set up a website, NGOWatch, to "bring accountability to the world of NGOs." <br /><br />Firms may conclude that if they are going to have to live with NGOs, they need to know which ones will play fair. Wise firms should talk to those—and leave the others to their tiger costumes. <br /><br /><span style="" font-weight:="" bold="" font-style:="" italic="">The Economist</span></div> </div>