Transcript of "Ethical Corporation - WWF at 50, Does the Panda Need More Teeth?"
Published on Ethical Corporation (http://www.ethicalcorp.com)WWF at 50: A golden anniversary?Posted by Ben Schiller  on Nov 3, 2011As WWF marks half a century of conservation work, it faces growing criticism that it is losing sight ofits founding principlesIf you are an NGO trying to change corporate behaviour, is it better to partner with business, leadingmanagers by increments to better practice, or is it more effective to confront companies throughdirect action, media blitzes, and public appeals?Most NGOs say it is necessary to do both – and that both can be effective. But it is also true that anindividual NGO will tend to do more of one than the other, reflecting its beliefs, history, andpositioning.Greenpeace, for example, is known for its confrontational approach, epitomised by its escapades atsea. WWF – celebrating its 50th anniversary this year – is, meanwhile, more “white shoe”:business-friendly, solutions-oriented, consensual.WWF’s view is that NGOs have to collaborate with companies if they are serious about changingthem. “We’re only going to arrive at sustainable solutions if we work with some of the most powerfulentities on the planet,” says Dax Lovegrove, WWF-UK’s head of business and industry. “Our view isthat we need carrots and sticks. It’s very simplistic to say all NGOs are supposed to be bashingcompanies over the head. We need diversity.”But recently WWF has come under intense criticism over its engagement with companies. Detractorssay it has more partnerships than it can manage effectively; that some ties conflict with WWF’s ownprogrammes; that WWF spends too much time and money signing up companies; that WWF hasbeen corrupted by the ethos of business – from the people it hires, to the managerial processes ithas adopted; and that WWF is conflicted between being a campaigning group and, in effect, abusiness consultancy.Some critics say the need to generate funds has diverted WWF from its core mission. “When thefundraisers are calling the shots, what becomes important are corporate partnerships to makemoney, and not the destructive business behaviours that are trashing the planet,” says CharlesSecrett, a former head of Friends of the Earth in England, Wales, and Northern Ireland.“It’s worms in an apple. WWF is becoming an out-and-out fundraising organisation, rather than anout-and-out campaigning organisation. Fundraising is taking precedence over conservation, and ifyou sup with the devil, you create a hell of your own making.”Timber networkThe phenomenon is exemplified by Global Witness’s recent report on the Global Forest and TradeNetwork (GFTN), WWF’s sustainable timber programme. GFTN, which celebrated its 20th anniversarythis year, is the oldest and largest scheme of its type, with 270-plus members in 30 countries. Itcovers 18% of all traded forestry products, and is well regarded in many conservation and forestrytrade circles. The report, however, points to serious failings: loose membership rules, lax monitoring,and a lack of transparency.Global Witness says GFTN sets such low expectations on participants that they enjoy all the upsidesof membership – including the chance to associate with an iconic conservation brand – and few ofthe downsides, including having to change how they source and produce timber products.Under GFTN’s rules, new “trade members” have five years before having to stop handling illegaltimber. “Forest members” (those that extract timber) have 10 years before needing certification,
Published on Ethical Corporation (http://www.ethicalcorp.com)such as the Forest Stewardship Council (FSC). Moreover, Global Witness says GFTN provides littleinsight on how members are performing. About 45% do not give any information about theirinvolvement, beyond their name; and WWF fails to disclose even those businesses that have left thescheme.“It isn’t good enough,” says Tom Picken, the report’s author. “These companies are benefiting fromassociation with WWF, often getting very good press coverage for joining up. There’s noaccountability for their performance when they leave the scheme, and a lack of information to allowthe general public to see whether it is working or not.”Picken says there has been a slippage in expectations since GFTN began. “In 1991, the plan was tophase out any product not sustainably sourced by 1995. When that wasn’t achieved, the target datewas changed to 2000. Then that wasn’t achieved. Now it’s a conveyor belt designed to getcompanies on a journey to certification. It’s lost its way; standards are appallingly low.”According to Global Witness, GFTN suffers from a lack of capacity. WWF cannot check up on everycompany, and facility, and therefore has to rely on self-reporting, and the goodwill of companies toabide by their promises. Inevitably, some do not follow through. Jewson, a major UK-based buildingmaterials supplier, sourced illegal timber from Malaysia 10 years after joining GFTN, the report says.Programme conflictMost damning, Global Witness says GFTN conflicts with WWF’s other programmes. In one case, itdescribes how Ta Ann Holdings Berhad, a Malaysian logger that joined GFTN in 2009, has destroyedrainforest demarcated for WWF’s “Heart of Borneo” project, which aims to protect orangutanhabitats. “It seems very contradictory to us that they actively fundraise to protect a patch of forestwhile they receive money from a company that is clearcutting the same area,” Picken says.To WWF’s critics, GFTN shows that collaborating with companies does not work. Global Witness saysthe scheme is ideally designed for companies to “greenwash” their operations.In response, WWF argues that Global Witness has cherry-picked its cases, and failed to account forthe improvements made by many participants. (WWF has, though, agreed to a reportrecommendation for a third party review.)Who is right about GFTN depends, to a certain extent, on your perspective, and what you thinksuccess is. Global Witness says WWF should have more to show for 20 years of hard work, includinga more accountable scheme. WWF, on the other hand, argues that signing up companies is in itselfan achievement, allowing better practice to follow. “Because 300 have signed up to moreresponsible timber management, that is where the whole scheme is succeeding,” Lovegrove says.Other NGOs say WWF is naïve in believing that scheme-participation leads inexorably to change.“WWF and GFTN are good at getting companies to sign on and make policy commitments, but I don’tthink they are good at getting companies to implement them,” says Scott Poynton, executivedirector of The Forest Trust, a UK-registered charity.“We find that companies compare us with them and say ‘if we work with GFTN, we don’t really haveto change, and we can say we’re working with the Panda’. We’ve been in many GFTN factories, andthe wood has been untraceable. It’s had no controls on it whatsoever.”Poynton says WWF has effectively lowered the bar, both through GFTN itself, and in how WWF hasabsorbed available funding, from government and corporate partners, pushing others out in theprocess.GFTN has an annual budget of $7m, of which 23% comes from government aid agencies, 18% fromcorporate donations, and 14% from members’ fees (estimated by Global Witness at an average$3,500 a year). The rest comes from other WWF programmes (18%), or is “unfunded” (26%).Lovegrove says the long-term intention is to make GFTN self-financing. So far, corporate donations
Published on Ethical Corporation (http://www.ethicalcorp.com)have included grants from the Citi Foundation (a Citibank representative also sits on its advisoryboard), Tetra Pak and Ikea (both of which also have wider WWF “partnerships”), Homebase, andHewlett Packard, all members of GFTN.Pinning down the amounts involved is tricky. Tetra Pak, for example, refuses to disclose the value ofits contribution, though it will say that its “forestry, packaging, communications and industryexperts” collaborate “on an ongoing basis with our WWF partners”.Across WWF as a whole, including its 67 country offices, corporate contributions make up about 11%of funding, though corporate foundation money is treated separately, and in some countries the levelis higher.According to WWF’s 2010 international annual report, in the UK corporate money accounted for£9.67m, or 17% of total 2010 revenues of £56.71m – a 34% rise on the year before (membershipfees and donations made up 44%).In the US, official “corporate contributions” ($10.51m) make up only 5% of $244.51m overallrevenue, although companies contribute in several other ways. In 2010, there were “in-kind”(non-cash) donations of $50.34m (22%); foundation grants (8%, or $17.25m); and “WWF NetworkRevenues” – money from other WWF funds (6%, or $13.04m). The actual level could therefore be upto 41% of income; the rest coming from individuals (38%) and governments (18%).WWF’s international secretariat, based in Gland, Switzerland, had 2010 revenues of €130.50m, ofwhich €8.07m came direct from corporations, and €65.21m was raised jointly with national offices,and included a sizeable company element.Corporate contributions WWF does not make it easy to calculate the corporate contribution, either in its accounts, or inreleases about individual companies, which tend not to disclose the sums. But it is easy to see thecompanies that have allied themselves with the NGO: Coca-Cola, Nike, IBM, Allianz, Toyota,Wal-Mart, and Johnson & Johnson, to name a few.These arrangements include philanthropic contributions, sustainable business collaborations(“advancing both conservation and the company’s business objectives”), and cause marketing(enabling “corporations and their customers to show their support and to contribute actively toconservation”).In addition, WWF has also developed GFTN-like “roundtables”, such as the Roundtable onResponsible Soy (RTRS), and the Roundtable on Sustainable Palm Oil (RSPO) (see below), whichinclude hundreds more companies, all of which pay for their involvement.In the UK, WWF currently has partnerships with brewer SABMiller (see below), Coke, HSBC, Tetra Pakand Sky TV. Dax Lovegrove says WWF does not work with oil and gas companies because of afundamental disagreement about the future of energy. It does partner with companies where it seesa “good strategic fit” – in other words, where the company’s objectives align with WWF’sconservation ambitions.“We are always looking at whether a company is prepared to improve. If we think it is reallyprepared to step up, that is what can take the partnership forward,” Lovegrove says.HSBC is by far the biggest partnership, financially speaking. Of a $100m deal, which ran from 2007to 2010, WWF received a quarter, sharing the rest with The Climate Group, Earthwatch Institute, andthe Smithsonian Tropical Research Institute. In February 2011, the partnership reported that 28million people had benefited from improved freshwater supplies, 2.9m hectares of forests had beenprotected, and that 18.5m hectares of wetlands had been put under management. WWF says thepartnership has enabled it to reverse or halt the decline of 52 endangered species.Some of WWF’s partnerships have caused embarrassment, though. WWF’s Sky TV tie-up aims to
Published on Ethical Corporation (http://www.ethicalcorp.com)raise £4m over three years, with Sky putting out awareness-raising programmes across its network,and promising to make up the difference if the target is not met. The commitment, though, has notstopped Sky running some particularly schmaltzy ads for Asia Pulp & Paper, a pariah for rainforestcampaigners. As with GFTN and Ta Ann, the episode has been seen as an example where apartnership has impinged on WWF’s other programmes. Lovegrove says only that he is “deeplydisappointed”, and that he has asked Sky to stop showing the adverts.Lovegrove sees no contradiction between taking money from companies, and trying to changecompanies. “Because we take money from companies and work in partnership I don’t think thatcompromises our ability to drive good action in the corporate sector. We are proud to be workingwith big business as long as we are driving new actions and new thinking,” he says.But others see the issue differently. Christine MacDonald, author of the book “Green, Inc” aboutlarge US conservation NGOs, says it is not so much that groups including WWF compromise withbusiness, but that they are already, in several senses, on a level with business.Historically, the founders of groups such as WWF were part of a moneyed elite, she says, rather thandisruptive rabble-rousers. And, over time, the NGO leaders have increasingly taken on the lifestyleand privileges of their corporate counterparts.The leaders of these organisations spend a lot of time with corporate bosses, travelling on privatejets to places that are hard to get to, getting to stay in the best spots, driving about in big cars,MacDonald argues. “It’s a wonderful lifestyle. You have these connections to high-powered people,celebrities and movie stars, and for the most part, you are seen as a hero.”MacDonald says conservation groups such as WWF have been co-opted by companies that haveworked out that a “soft-power” approach is more effective than being in conflict with NGOs. “If youlook at these relationships over a decade or two, it’s not at all difficult to see who is getting thebetter end of the deal. You see time and again that the corporations are.”Critics such as MacDonald say partnerships are less about a strategic decision that working withcompanies is the best way to bring change, than the need to fund increasingly bureaucraticorganisations, including large salaries for senior staff. For example, WWF-US’s chief executive, CarterRoberts, is paid $455,000 a year, not including other benefits. The UK chief appears to be paidsomewhere between £110,001 and £120,000, according to WWF’s annual report (it does not discloseactual salaries).More importantly, the various WWF organisations spend a large proportion of income onnon-frontline activities. WWF-UK spent 28% of its expenditure (£50.51m) in 2010 on raising funds.According to GFTN’s 2010 accounts, it spent only 39% of outgoings on “activities”, with the restgoing to personnel (40%), office costs (12%) and travel (9%).Secrett, the former head of Friends of the Earth, says the cost of fundraising should be nearer 10%,and that NGOs such as WWF have become top-heavy with staff imported from the private sector.“As they have grown, they have increasingly attracted leaders and mangers who don’t know how tocampaign and have no activism background. They have brought in their skills in runningconventional businesses, and that makes them susceptible to constantly boosting the backroom, orthe fundraising, or the PR, or HR, rather investing in campaigning or research, public information, orcommunity organisation.”The futureAgain, whether the evolution of NGOs into more “professional” organisations is a good thing or not,depends on your perspective. Several veterans of the NGO scene defend WWF’s development, andits focus on company partnerships.Tom Burke, former executive director of Friends of the Earth, and now an adviser to Rio Tinto, says itis important that NGOs become more business-like if they are going to be taken seriously. “If you are
Published on Ethical Corporation (http://www.ethicalcorp.com)gong to be dealing with business and government on a grown-up basis, you’re going to need a moreprofessional staff. They need to have experience of the business and finance world, and that meansyou are going to have to pay them a lot more. The environmental NGOs have not gone through thesame changes as the disaster relief charities in updating their management systems.”John Elkington, sustainable business guru and co-founder of SustainAbility, is co-author of “The 21stCentury NGO: In the Market for Change” and sits on WWF-UK’s council of ambassadors. He saysWWF’s partnerships make greater sense today, as business is genuinely interested in reformingitself. “The problem historically was that NGOs often had more to lose, in terms of brand andreputation, than they were likely to gain, because of the inertia in companies and the widercapitalism system,” he says.NGOs were also often ill-prepared, with insufficient intelligence about particular chief executives,companies or markets, Elkington argues. “But I think the key NGOs have professionalisedconsiderably – and initiatives like FSC and the Marine Stewardship Council have had an importantimpact on how particular companies view all of this.” But Paul Hohnen, a former director of Greenpeace International, says the Global Witness reportshows the need for accountability and transparency in partnerships. “I think there are problemsabout dealing with business, and there is a need for greater transparency about the impact they arehaving, and accountability about the resources NGOs are receiving from industry, so people canunderstand that resources are going to effect change.”Hohnen says NGOs should not work with companies that are not doing sustainability reporting,providing disclosure on their environmental and social impacts, and what effect their policies arehaving. If companies fail to offer that, then NGOs should walk away. “The role of NGOs is to get realchange, and if that is not happening, there are real questions about what they are in the businessfor,” he adds.And with many of the world’s environmental problems only getting worse, it seems inevitable thatthere will be greater debate about the effectiveness of powerful NGOs such as WWF. With asignificant share of government corporate funding for issues such as forestry management, they willexpect outsiders to question whether they are delivering.Rather than being defensive about their corporate partnerships, though, there is a growingconsensus that all NGOs, including WWF, should shine as much light as possible on thearrangements – both to dispel doubt among observers, and as a way of keeping the pressure up incompanies to reform. Proper transparency is the least we should expect.Palm oil problems The Roundtable on Sustainable Palm Oil (RSPO), like the Global Forest and Trade Network, hasbeen criticised as a form of “greenwashing”.“Dem Pakt mit dem Panda”, a documentary by film-maker Wilfried Huismann, whichpremiered this summer, accuses WWF of handing out “indulgences” to absolve companiesof their sins. The film says WWF certified a palm oil plantation owned by Wilmar, a Singaporeancompany, which destroyed 14,000 hectares of rainforest, managing to save only 80 hectares.WWF says parts of the film are inaccurate. Dax Lovegrove, WWF-UK’s head of business andindustry,says the RSPO is succeeding in signing up companies, which number 526 full members, 96affiliates, and 73 supply chain associates.He argues: “This is the best show in town. We all agree that something needs to be done aboutpalm oil. For anyone who is critical of the scheme, the question is ‘if not the RSPO, then what?’Nobody seems to be coming up with an alternative. We actually feel this is making progress,although we do know we need to make improvements.”Water conservation that works
Published on Ethical Corporation (http://www.ethicalcorp.com) WWF’s “Water Futures” partnership with SABMiller and the German government agency GTZ grew out of the brewer’s concern about the state of water supplies near its sites. An initial study in 2007, using a tool developed by the World Business Council for Sustainable Development, found that up to 30 sites could see future water shortages. In 2008, the three partners conducted a full “waterprinting” of sites in South Africa and the Czech Republic . After that, SABMiller decided to launch full water conservation projects in South Africa, Ukraine , Peru and Tanzania that are still going on today. In South Africa, for example, WWF and SABMiller are removing non-indigenous tree species, with the aim of making more water available for the local community, the environment, and the company. Andy Wales, SABMiller’s head of sustainability, says it is vital for companies, NGOs and governments to work together. “We are going to need significant changes in how we all working together. The very old paradigm of just confrontation by NGOs isn’t going to work any more. We still need challenge, and I think WWF is still fairly good at that. But they have also been a model for NGOs in how to work with business on thorny problems of resource scarcity.” NGOs such as WWF offer things that other groups cannot, Wales says. “NGOs like WWF have knowledge and relationships with communities that businesses often do not have, and that can be very valuable. It is not what you could get from a consultancy. In 2008, when we were looking for the best thinking, it came from WWF. There are other consultancies now, but at the time WWF was miles ahead.” On the accusation that companies seek a “halo effect” from working with recognised brands like WWF, Wales says SABMiller has been focused on water scarcity, and has not co-marketed any product using WWF’s logo. He concedes that that partnering with WWF and GTZ can help push the issue to the wider audience. “Our combined reputation makes a bigger difference than if we were doing it on our own.” The project has an initial budget of €2m over three years, with SABMiller and GIZ (GTZ’s successor) splitting the bill. Some projects are led by WWF, others by outside groups contracted by the NGO and GIZ. Dax Lovegrove, WWF-UK’s head of business and industry, says the work would not happen without SABMiller’s input. “It does require financial investment from SABMiller, and allows us to bring in our freshwater teams. I think there is a good fit between raising funds to bring conservation to those watersheds, as well as protecting the communities and wildlife, while also driving different thinking in the private sector about how to deal with this challenge of increasing water scarcity. That’s a perfect change-making partnership that has good money involved.” Links:  http://www.ethicalcorp.com/users/ben-schillerPowered by TCPDF (www.tcpdf.org)