CORPORATE PARTNERSHIPS WITH NON-GOVERNMENTAL ORGANIZATIONS: THE EVOLUTION OF CORPORATE SOCIAL RESPONSIBILITY

A THESIS

Presented to

The Faculty of the Department of Economics and Business

The Colorado College

In Partial Fulfillment of the Requirements for the Degree

Bachelor of Arts

By

Peder McDermott Johansen

May/2009 CORPORATE PARTNERSHIPS WITH NON-GOVERNMENTAL ORGANIZA TIONS: THE EVOLUTION OF CORPORATE SOCIAL RESPONSIBILITY

Peder McDermott Johansen

May,2009

Economics

Abstract

The purpose of this thesis is to investigate the factors that motivate companies to partner with NGOs on the issue of climate change. In investigating these factors several appear to motivate companies to take action: cost savings, brand image, and altruistic motivations. Climate change has the ability to change the way we live and the global landscape. It is important to understand the factors that cause business to take action on climate change so that we can help to slow or reduce the intensity of climate change. I investigate six companies, three who are actively partnering with NGOs (Lafarge, Nike, and ) and three who are not (Boeing, , and Weyerhaeuser) to determine what factors motivate these companies to either take action or not.

KEYWORDS: (Climate Change, Corporate Social Responsibility, NGO) ON MY HONOR, I HAVE NEITHER GIVEN NOR RECEIVED UNAUTHORIZED AID ON THIS THESIS

Signature

TABLE OF CONTENTS

Chapter Page

I. INTRODUCTION ......

II. THEORy...... 5 Corporate Social Responsibility...... 6 Stakeholders...... 6 Development of CSR ...... , ...... 7 Profitability of CSR...... 9 CSR and the Environment...... 11 Business Partnerships...... 12 NGOs...... 12 Climate Change and Business...... 13 Green Alliances...... 14

III. BACKGROUND...... 18 The Environmental Defense Fund...... 18 WWF Climate Savers...... 21 The World Business Council for Sustainable Development...... 24 United States Climate Action Partnership...... 26 Ceres...... 28 Company Profiles...... 29 Starbucks...... 29 Nike...... 32 Lafarge...... 33 Boeing...... 34 Costco...... 35 Weyerhaeuser...... 35

IV. ANALySIS...... 37 Methodology...... 37 Data...... 38 Carbon Disclosure Project...... 39 Starbucks...... 46 Nike...... 47 Lafarge...... 48 Boeing...... 50 Costco...... 51 Weyerhaeuser...... 52

V. CONCLUSION...... 54

SOURCES CONSULTED...... 58 LIST OF TABLES

3.1 EDF MAJOR CORPORATE PARTNERS AND PROJECTS...... 20 3.2 23 COMPANIES IN THE CLIMATE SAVERS PROGRAM ...... 3.3 COMPANY GOALS FOR THE CLIMATE SAVERS PROGRAM...... 23 3.4 NOTABLE COMPANIES PARTNERING WITH THE WBCSD...... 26

3.5 USCAP MEMBER COMPANIES...... 27 3.6 USCAP NGO MEMBERS...... 27

3.7 NOTABLE COMPANIES OF THE 83 PARTNERING WITH CERES...... 28

4.1 KEY TERMS...... 38

4.2 CARBON DISCLOSURE PROJECT SURVEY RESPONSES...... 40 4.3 OCCURRENCES OF KEY TERMS IN COMPANY DOCUMENTS ...... 41

4.4 AVERAGE KEY TERM OCCURRENCE PER THOUSAND WORDS...... 42

4.5 OCCURENCES OF KEY TERMS BY COMPANy...... 44 4.6 OCCURENCES OF KEY TERMS PER THOUSAND WORDS BY COMPANy ...... 45 4.7 ANAL YSIS OF HOW SOME KEY TERMS BREAK DOWN (STARBUCKS)...... 46 4.8 ANAL YSIS OF HOW SOME KEY TERMS BREAK DOWN (NIKE)...... 47 4.9 ANAL YSIS OF HOW SOME KEY TERMS BREAK DOWN (LAFARGE) 48

4.10 ANALYSIS OF HOW SOME KEY TERMS BREAK DOWN (BOEING) ... 50

4.11 ANALYSIS OF HOW SOME KEY TERMS BREAK DOWN (COSTCO)... 51

4.12 ANAL YSIS OF HOW SOME KEY TERMS BREAK DOWN (WEyERHAEUSER)...... 52 LIST OF FIGURES

3.1 IMPORTANCE OF TOPICS COVERED IN STARBUCKS 2006

CORPORATE SOCIAL RESPONSIBILITY REPORT...... 31 CHAPTER I

INTRODUCTION

Climate change is problem that all of humanity is facing today. Scientists have

been able to use ice core samples to look at the concentration of CO2 and the temperature

of the earth going back over 400,000 years. In their findings the concentration of CO2

had never exceeded 300 parts per million (PPM) CO2. However, currently the average

atmospheric concentration of C02 is 380 PPM. This leads scientists to believe that the

climate change that we are seeing is from anthropogenic causes. "Scientists predict that

if the increase in greenhouse gas emissions continues unabated, temperatures will rise by

as much as }0 degrees Fahrenheit by the end of this century, potentially causing dramatic-and irreversible---changes to the climate."} It is speculated that as the earth's temperature increases, glaciers on Antarctica and Greenland will melt causing sea level rise. This will have dramatic effects on many low lying areas and coastal cities, causing the destruction of infrastructure and millions of people to become refugees. This will also have the effect of destroying the habitat of many different species of plants and animals. As ocean temperatures rise, it is possible that large storms will become more powerful and destructive. We may also see changes in rainfall patterns; this could have

I Pew Center on Global Climate Change. "Climate Change 101: Overview." Available from http://www.pewclimate.org/docUploads/Climatel 0 1-0verview-lan09.pdf. Internet; accessed 30 April 2009. 2 the effect of leaving cities without an adequate supply of water and changing the growing regions for the world's crops. Much of this is speculation since scientists have not been able to create models that take into account all aspects of climate change, but the future

seems bleak if no change is taken.

In July of2008 Al Gore gave a speech in D.C. where he called for

100% renewable electric power in the United States (U.S.) by 2018:

To those who say 10 years is not enough time, I respectfully ask them to consider what the world's scientists are telling us about the risks we face if we don't act in 10 years. The leading experts predict that we have less than 10 years to make dramatic changes in our global warming pollution lest we lose our ability to ever recover from this environmental crisis. 2

Of the U.S. greenhouse gas (GHG) emissions from 2006, electricity generation makes up

32%, transportation makes up 28%, and Industry makes up 20%.3 Mr. Gore's call to change implies that all sectors from business to government are needed to work together to accomplish this aggressive program and can help promote change within other sectors.

Non-Governmental Organizations (NGOs) have the ability to bridge the gap between government inaction on climate change and work directly with the companies emitting greenhouse gases to develop action plans and work to address the issue on a voluntary basis. This model has been effective with the World Business Council for

Sustainable Development (WBCSD) cement project where eighteen companies worked to understand the issues their industry faces on climate change. These companies have

2 Environment News Service "INSIGHTS: A Generational Challenge to Repower America." Available from http://www.ens-newswire.com!ens/juI200S/200S-07-1S-insgore.asp. Internet; accessed 30 April 2009

3 U.S. Department of Transportation, "GHG Inventories, Forecasts, & Transportation Data." A vailab Ie from http://climate.dot.gov/ghg-inventories-forcasts/national/us-inventory-structure.html. Internet; accessed 7 April 2009. 3 taken voluntary action to reduce their GHG emissions and have set goals that they want to meet. In addition the Forest Stewardship Council (FSC) was developed to track and assure the consumer that the wood or paper products they are purchasing are sustainable.

The development of the FSC means that forests around the globe are now being certified as sustainable as are forestry plans. This certification allows for logs and products coming from these sustainable forests to be tracked from the exact location they were cut until the finished product reaches the consumer.4 This is another way in which a NGO has worked outside the restrictions of government to accomplish a private sector goal.

Starting in the 1990s companies began to work cooperatively with NGOs.

Companies cite three main reasons they have decided to take preemptive action on the issue of climate change: cost savings, social responsibility, and reputation enhancement.s

Are these factors the only factors that companies take into account when they are deciding on their CSR policy? What are the driving factors that cause companies to partner with NGOs on the issues of the environment and climate change? Are the motivations of these companies altruistic or do they expect that they will see other gains from the costs of partnering with NGOs? Are these companies attempting to either draw attention away from their bad practices? Or are they attempting to gain political footing by taking action on climate change and the environment before government regulation?

4 FSC, "Forest Stewardship Council" Available from http://www.fsc.orglfileadminlweb- data/public/document_ center/publications/fact_sheetslForest_ Stewardship _Council-EN .pdf. Internet: accessed 22 April 2009

5 Hoffman, Andrew 1. "Getting Ahead of the Curve: Corporate Strategies That Address Climate Change." Pew Center on Global Climate Change. Available from http://www.pewclimate.orgidocUploads/PEW_ CorpStrategies.pdf. Internet; accessed 30 April 2009. 4

The ultimate question remains, what are the factors that motivate business to partner with

NGOs on the issue of the environment?

I used case studies to gain information as to the motivating factors of business when it comes to partnering with NGOs. I also used surveys from the Carbon Disclosure

Project and the companies Sustainability or Corporate Social Responsibility (CSR) reports. The companies I investigated Starbucks, Nike, Lafarge, Boeing, Costco, and

Weyerhaeuser. In selecting these companies I looked for companies that either actively partnered with NGOs and some that also did not partner with NGOs. Another factor I used whether the companies were large and their brand is easily recognizable by average consumers. I used the documents of these companies to determine if there is a difference between companies that partner with NGOs and those that do not. I used key terms to see how frequently they occur and how companies use these terms to discuss climate change.

I plan to see what patterns occur in the data and whether the drivers behind partnerships have changed and gain a better understanding of how companies see their role in the problem of climate change.

I expect to find that brand image, cost reduction, CSR, and political factors are drivers ofNGO business partnerships. In addition I anticipate that companies have political motivations that also influence their actions. I also expect that business will listen to more of their stakeholders in determining how and where they will focus their

CSR.

Chapter two discusses the relevant literature that relates to partnerships, CSR and its history, corporate strategy, environmental business partnerships, and environmental policy. Chapter three discusses some of the types of partnership programs and the 5 environmental goals of Star bucks, Nike, Lafarge, Boeing, Costco, and Weyerhaeuser.

Chapter four covers the content analysis. Finally chapter five is the conclusions. CHAPTER II

THEORY

In trying to understand the motivations of business it is important to understand

the concepts of corporate social responsibility (CSR), the practice of business

partnerships, and the impetus for companies to act on the issue of climate change and the

environment. CSR on the environment and voluntary partnerships with environmental

NGOs is a complex area of corporate governance. Historically companies only focused

their efforts on maximizing shareholder value, the classical view of companies. 1

However, this has changed and the relation between consumers, shareholders, and

stakeholders has begun to draw corporate focus away from this classical theory. While

some environmental programs should be implemented simply because they will

maximize share holder value, such as efficiency improvement and waste reduction, other

policies have their roots based in more complex relations between the stakeholders.

While most investors are focused on the returns of a company, there are groups of

institutional investors that control vast sums of money and may have specific goals when investing that requires a company to have some specific environmental goals or CSR policies.

1 Elisabet Garriga and Domenec Mele, "Corporate Social Responsibility Theories: Mapping the Territory," Journal of Business Ethics 53, no. 1-2 (August 2004) : 53

6 7

Corporate Social Responsibility

Stakeholders

The relation between a company and its stake holders has changed in recent decades. Companies have mainly focused on maximizing profits to shareholders; however that idea has begun to change as the different groups within a company's stakeholders have changed. Stakeholders are defined as "individuals or groups with an interest, claim, or stake in the company, in what it does, and how well it performs.,,2

There are two types of stakeholders, internal and external. External stake holders are such groups as customers, suppliers, creditors, governments, unions, local communities, and the general public. Internal stake holders are the company's stockholders, employees, managers, and board members. 3 All of the different stakeholders in a company supply the company with resources or contributions and expect to gain from their relationship with the company. The interests of stakeholders are taken into account when a company creates its strategic policy. However, this does not mean a company will try to satisfy all the different stakeholders but simply the ones the see as most important. A company's stockholders have a unique relation to the company since they are the owners of a company and supply a company with capital funding. Recently, there has been a trend of a company's employees have started taking more of a stake in the company by becoming stockholders, either by choice through employee stock purchase

2 Charles W. L. Hill and Gareth R. Jones, Strategic management theory: An intigrated approach (Boston, MA: Houghton Mifflin Company, 2006), 374.

3 Ibid., 375 8 programs or through other benefit programs. This trend to make employees stockholders is partly done to try to reduce agency costs and bring a case a change in employee behavior to help improve the company's value. 4 Because of the variety of different stakeholders, their interests are often focused in different areas. Because of the variety of differing ideas of stakeholders there is often a conflict of ideals and ideologies. Some stakeholders may focus on maximizing the wealth of a company by addressing energy efficiency and climate change. Because of stakeholders and their interests we have seen more development of company's policies toward CSR.

Development of CSR

CSR is seen in the business world as the actions or programs that a company takes to try to improve areas of society including environmental concerns, worker safety, and product safety. A question that arises is whether CSR naturally grew to include the issue of climate change. The idea of CSR has been around since the 1940s; however it only truly became defined in the 1970s.5 During this time there are three prominent definitions that try to make sense of CSR. 6 The first definition implies a stakeholder perspective that indicates the company looks at more than maximizing shareholder wealth and also looks out for the welfare of employees, suppliers, communities, and consumers. The second way to look at CSR is as a way to maximize long run performance, meaning that the social programs increase the profitability of the company.

4 Garriga and Mele, 54.

5 Archie B Carroll, "Corporate Social Responsibility: Evolution of a Definitional Construct." Business & Society 38, no. 3 (September 1999): p273

6 Ibid. 9

The third way to look at CSR is as a way to maximize utility where the manager who is maximizing his utility also has an interest in the well-being of others. 7 During this time many discussed whether CSR is the proper use of company's resources. The prominent theme was that CSR should only be embarked on after the financial goals of the company are reached. CSR is considered an area of the corporation that does not improve shareholder wealth but is believed that it is a way of appeasing stakeholders. In the

1980s research into CSR increased. A new idea developed "the idea that profitability and responsibility were compatible."g This allows for business to consider CSR as a way of driving business and sales Often companies see their CSR policy as a possible way to attract and maintain their customer base. Consumers are often attracted to companies that are socially responsible because it provides them piece of mind; primarily because companies' CRS policy works to give back to the community, environment, and workers.

This helps to drive long run sales and profitability if the company continues to focus their

CSR policies on the issues that are important to consumers.

In current times the theories on CSR focus on four main ideas: "(1) meeting objectives that produce long-term profits, (2) using business power in a responsible way,

(3) integrating social demands and (4) contributing to a good society by doing what is ethically correct.,,9 Companies that are concerned about the environment may choose to take actions to reduce waste and energy use, which will often reduce costs for the company and help to increase their profitability. Companies like GE, who have begun to

7 Ibid., 274.

g Ibid., 286.

9 Garriga and Mele, 65. 10

take steps to evaluate and address their carbon footprint, have gathered together to flex

their business muscle and call for government to take action to deal with climate change.

These companies see that environmental NGOs and other activists may call for

companies to take action on the environment and the companies may take action to avoid

having negative attention called to them. Companies may simply be ethical and want to

take action on an issue because it is an important issue to upper management. However,

the most important issue for economists is the profitability of CSR and whether CSR is

the correct way for companies to spend their resources if the ultimate goal of companies

is to maximize shareholder value.

Profitability of CSR

Companies discuss their CSR policy in several different documents, from issuing

CSR reports or sustainability reports to corporate citizenship reports. All of these have

similar themes and promote the companies' programs where they reach out beyond the

core competencies of the companies and what they do outside the realm of making

profits. The business community is still undecided whether or not CSR makes good

business sense or if it is an inefficient practice where shareholders bear the cost. "A

growing number of marketplace polls attests to the positive effects of ... (CSR) on

consumer behavior ... more companies than ever before are backing CSR initiatives such

as corporate philanthropy ... and social responsible employment and manufacturing

practices with real financial muscle."lo Most companies believe that their CSR programs

10 Sen Sankar and C. B. Bhattacharya. "Does Doing Good Always Lead to Doing Better? Consumer Reactions to Corporate Social Responsibility," Journal of Marketing Research 43 (May 200 I) : 225. 11

improve their image in the eyes of consumers and probably help to improve their

competitive advantage. "Although this aggregate positive relationship between a

company's CSR record and consumers' willingness to patronize the company represents

an important beginning in the understanding of CSR, it masks potentially important

company- and consumer-specific differences." II The CSR policies of a company work to

help express the values of a company and the issues that they feel are important to

themselves, their consumers and their stake holders. However, the question of whether

CSR helps improve financial performance is still waiting to be answered. The debate

over this subject falls to arguments of what variables are important to determining the

link between profitability and CSR. The main argument that underlies this question is the

inclusion of the variable of research and development (R&D) as an important variable

one study finds that a company's R&D and CSR has a strong correlation to profitability.

The variables that are seen as important to the profitability of CSR are the long run economic or financial performance of a firm, the size of the firm, risk of the firm, industry specific factors, R&D of the firm, and advertising intensity of the firm. These factors determine the profitability ofa firm's CSR I2

CSR and the Environment

When companies are considering CSR and whether to take action to voluntarily reduce their GHG emissions they consider the profitability of such actions and what will be

IIIbid.,226.

12 Abagail McWilliams and Donald Siegel. "Corporate Social Responsibility and Financial Performance: Correlation or Misspecification?" Strategic Management Journal 21 , no. 5 (May 2000) 12

accomplished by these projects. There are many ways that consumer behavior may

change company's willingness to be involved with environmental CSR policies. In

recent years the focus on climate change has started to change the purchasing habits of

consumers. Consumers began purchasing based on environmental goals. This is evident

by the sprouting up of many different methods and labels to identify these products. This

includes the creation of fair trade coffee, shade grown coffee in one sector. Companies

have started to advertise their use of renewable energy sources as a way to draw in

consumers. There has also been a change to biodegradable take out containers and starch

based forks, spoons, and knives. While frustrating to use, consumers feel better about

using a product that is not made from petrochemicals.

But consumer demand is not the only driver that causes companies to take action

on the environment. Company image is important and the threat of boycott or protest

causes business to take action to prevent being seen as an evil corporation. Another area

to look at is labor markets since "most employees want to feel good about the company

where they work, and want to be able to tell their children they are working to make the

world a better place.,,13 Oil companies such as Shell are creating massive publicity

campaigns to promote the technologies and practices that they are undertaking to gain

access to oil reserves that are not easily accessible and technologies to shift away from

fossil fuel use. The question arises, is Shell taking theses actions simply to appear that

they are playing an active role in creating change from the oil dependent status quo? Or

are their actions meaningful in attempting to playa part in the transition away from their

13 Thomas P Lyon and John W. Maxwell. "Corporate Social Responsibility and the Environment: A Theoretical Perspective." Review ofEnvironmental Economics and Policy 2, no. 2 (2008): 244. 13 primary product and there by stay competitive? This is the problem of "green washing," i.e. being less than sincere in the actions a company is taking on the environment, making claims that cannot be substantiated or advertising facts that are mandated by government.

The idea of "green washing" is the idea that a company will not take any real action but only actions that will fool a consumer into thinking the product or company is actually more environmentally friendly than it is in actuality. 14

Business Partnerships

As part of wanting to partner with corporations, NGOs that work on environmental issues walk a fine line between their ability to constructively work with a company and their ability to criticize the company. This has caused a change within

NGOs from militant confrontation and protest to more of a middle ground that allows the

NGO to work with corporate partners to improve their environmental record. "The culture of environmental groups is shifting from one of protest to practical solutions, evidenced by the collaborative leadership with industry that is being initiated by such groups as the Environmental Defense Fund ... These 'green alliances' are designed to

'green' products and operations and transform the traditional command-and-control

5 regulatory climate." I However, there is a liability for the NGO when partnering with a company since the NGO risks its reputation on the ability of its partner to create the

14 Laufer, William S, "Social Accountability and Corporate Greenwashing," Journal a/Business Ethics 43, no.3 (March 2003): 256.

15 Cathy L Hartman and Peter S. Hofman, Edwin R. Stafford, "Partnerships: A Path to Sustainability," Business Strategy and the Environment 8, no. 5 (September 1999): 262 14

change in their emissions. Also, the NGO risks legitimizing the company's bad practices

by attempting a partnership that fails or where the agenda of the business is dominant.

NGOs also need to be careful about how they choose their partners. Many NGOs have

policies in place where they will not work with certain types of companies such as

extractive industries, oil and gas, and government contractors.

Climate Change and Business

Shifts in corporate organization from a focus on shareholder responsibility to one

that integrates stakeholders and a focus on issues larger than shareholder wealth

maximization are often caused by globalization and increased competition. Because of

the increased competition companies are becoming more aware of the needs and wants of

a larger stakeholder base. Partnerships with environmental NGOs are a way of bringing

new ideas to the strategic planning discussion and bring more representation to more

stakeholder groups. 16 One underlying problem of partnerships is whether the agendas of

the partners and organization are compatible and look to achieve similar goals. If the

agendas differ then partnerships may not be successful or only represent the interests of

the stronger party. United Stated Climate Action Partnership (USCAP) "is an expanding

alliance of major businesses and leading climate and environmental groups that have

come together to call on the federal government to enact legislation requiring significant

reductions of greenhouse gas emissions.,,17 However, USCAP is seen as ineffective and

16 Utting, Peter. "UN-Business Partnerships: Whose Agenda Counts?" UNRISD. Available from http://www.unrisd.org/unrisd/website/document.nsf/d2a23ad2d5Ocb2a280256eb300385855/a687857bd5e3 61 14cI256c3600434b5f1$FILE/utting.pdf. Internet; accessed 30 April 2009.

17 USCAP, "About USCAP." Available from http://www.us-cap.orglaboutlindex.asp. Internet; accessed 22 February 2009. 15 as a way to draw out the discussion on climate change and keep any real change occurring in terms of climate regulation. Some of USCAPs members are accused of hiring lobbying groups to lobby against the recommendations ofUSCAP. 18 Seeing how roundtable groups fail to achieve real progress, NGOs began using other methods of partnership with companies, focusing on specific issues, goals and reductions to achieve a change.

Green Alliances

Green alliances are "partnerships between environmental NGOs and businesses that pursue mutually beneficial ecological goals.,,19 These partnerships take many forms, from roundtable meetings for companies to discuss their environmental policy to programs to reduce their carbon footprint or resource use. "For business, green alliances may raise new business opportunities, improve (environmental) performance and enhance reputation, while NGOs may achieve more environmental gains through co-operation with business than through cooperation with government. ,,20 There are many examples of this theory. The Forest Stewardship Council (FSC) was developed to track and assure the consumer that the wood or paper products they are purchasing are sustainable. They do this by certifying forests and forestry plans and all the companies along the production

18 Elgin, Ben, "Green-- Up to a Point," Business Week, Available from http://www.businessweek.com/magazine/contentl08_091b4073000596425.htm. Internet; accessed 30 April 2009.

19 Bas Arts, '''Green Alliances' of Business and NGOs. New Styles of Self-Regulation or dead- End Roads'?," Corporate Social Responsibility and Environmental Management 9, no. I (February 2002). P 26

20 Ibid. 16 process to ensure their ability to track the entire history of each piece of lumber. This certification allows for logs and products coming from these sustainable forests to be tracked from the exact location they were cut until the finished product reaches the consumer. This council has been able to work to encourage the changes in forestry practices without the need to change world government policy.

Government legislation is often slow moving and is often a compromise of policy that does not reflect the most economical policy. "Companies ... consider many regulations inefficient, as theses are generally too broadly formulated, too costly from an economic point of view, and do not always stimulate best practices and most innovative technologies.,,21 NGOs work with companies on specific interests; for example, the

World Business Council for Sustainable Development (WBCSD) has worked with the cement industry to address the challenges of sustainable development. The purpose of their project is to:

Identify and facilitate actions that companies can take as a group and individually to accelerate the move towards sustainable development. Provide a framework for working with external stake holders. Provide a framework through which other cement companies can participate.22

As part of this program, the WBCSD has challenged the participating companies to set goals for a reduction of GHG emissions. The emission reductions by these cement companies are entirely voluntary. All the companies meet their local environmental regulations so by reducing emissions in their industry they are creating de-facto

21 Ibid., 28

22 World Business Council for Sustainable Development, " WBCSD Sector Projects - The power of working together." Available from http://www.wbcsd.org/DocRoot/jDN I 6MEoHXUQ3S9VVMmG/sector-projects.pdf. Internet; accessed 30 April 2009. 17 environmental regulation. This program is on a global scale so it has the ability to create emissions reduction without global governments agreeing to legislation or treaties.

There are also examples of companies in an industry working together to determine effective goals for health, safety, and the environment. The Responsible Care program is an initiative sponsored by the International Council of Chemical Associations.

Within the U.S. the Responsible Care program focuses on worker health and safety, environmental impact, energy use, and product stewardship. Companies track their progress in theses areas and then have their information verified by a third party to ensure that they are being truthful. This program fails to set goals for the companies to meet while it offers companies recognition for their improvement in areas monitored by the program. The Carbon Disclosure Project (CDP) surveys companies about their GHG emIssIOns. However, there is still much asymmetrical information in the area of GHG emissions. Few companies in high emitting sectors report their information unless they happen to be the company that has become an industry leader in environmental practice or wants to appear that way. "Using an institutional theory perspective, which suggests that an organization will adopt certain environmental practices to attain social legitimacy rather that merely to enhance operational efficiency ... companies use greater discretion ... when organizational image is not at stake,,23 This theory brings to light some motivations of companies to enter into voluntary partnerships with NGOs, since it allows for a greater flow of information about the companies environmental practices into public view.

While partnership is attractive to many companies it also has the ability to bring

23 Cathy L. Hartman and Peter S. Hofman, Edwin R. Stafford. "Partnerships: A Path to Sustainability." Business Strategy and the Environment 8, no. 5 (September \999): 260-26\ 18 unfavorable information to the public and make it easier for stakeholders to find and criticize possible faults with the companies' practices. The openness required as part of a partnership with a NOO has up sides and down sides. The companies will weigh the risks as part of determining if they will engage in partnerships with NOOs.

There are driving factors that increase the likelihood of companies partnering with

NOOs for reasons beyond "cost savings, social responsibility, and reputation enhancement" since CSR programs and policies are complex and dependent on the companies ranking of its stake holders. However, the issue ofthe environment and climate change has been addressed by many large U.S. companies in their CSR reports.

Companies admit that climate is one of the largest issues facing the globe today.

However, their reports may simply state reductions in emissions from a point in time or the company may talk about the change in emissions intensity and not deal with their absolute emissions. Companies are good at creating reports that say nothing. However, there are some companies that actually see that they need to take action on climate change and set goals and targets to meet. Overall companies that partner with NOOs on the environment have decided that they want to change and are willing to disclose the information about their emissions and energy use. The question still remains what are the factors that cause business to partner with NOOs. It appears from the current literature that it is strongly based in the company's CSR policies and stakeholder input. However, there are probably still more reasons beyond these for a company to partner with NOOs such as brand image, government regulation, and increased profitability CHAPTER III

BACKGROUND

In understanding why companies choose to partner with NGOs it is important to look at the different types of programs that the NGOs have to offer companies. There are two main types of programs. Those that seek to achieve an absolute reduction of greenhouse gas (GHG) emissions and those who offer a roundtable discussion of the problem. The programs that I will discuss are the Environmental Defense Fund, the

World Wildlife Fund Climate Savers, the World Business Council for Sustainable

Development, Ceres, the Climate Group, and USCAP. In addition it is important to understand why companies are active in different arenas.

The Environmental Defense Fund (EDF)

The Environmental Defense Fund is a U.S. based NGO that works with business, communities, and government to deal with environmental problems. They do this by working with the scientific community to fully understand the facts of the problem, developing and studying the effects of economic incentives for business to reduce their

GHG emissions, partnering with corporations to address specific issue to those

19 20

companies, and working for effective government legislation to address the problems

both globally and nationwide. 1

The Environmental Defense Fund works with a wide range of companies on a variety of issues: "clean fleets and vehicles, climate change strategies, paper and

packaging, ocean friendly seafood, and safer products and materials.,,2 The EDF works with companies to create positive changes within the company in hopes of creating industry wide change. The EDF projects follow these strategies.

Define new best practices - By working with business leaders, we develop our projects to be trendsetters. Green the supply chain - To up the demand for environmentally preferable products and raw materials, we partner with companies with substantial purchasing power. Transform industry - Working with market leaders, we are creating "ripple effects," motivating other companies in the same sector to make similar environmental improvements. Factor the environment into business - Creating tools that businesses can use is a priority of our projects. Demonstrate the business benefits of environmentalism - Our projects have both environmental benefits and strong business rationales. Conservation often applies to both the environment and costs?

The EDF tailors the projects that it partners with companies on issues most important to companies. For example they worked with Starbucks on the issue of paper cups and introduced "10% postconsumer recycled content paper cups, instituted a policy to encourage the use of ceramic plates and cups for in-store customers and adopted a corrugated cup sleeve to eliminate double-cupping.,,4 While these projects may not focus

1 EDF, "About Us" Available from http://www.edf.org/page.cfin Internet; accessed 24 April 2009.

2 EDF, "Corporate Partnerships." Available from http://www.edf.org/page.cfm?tagID=56. Internet; accessed 28 April 2009.

3 EDF, "Corporate Partnerships: Our Approach." Available from http://www.edf.org/page.cfm?tagID=1746. Internet; accessed 22 February 2009. 21 on reducing GHG emissions directly, they address issues that deal with energy use and saving resources. By doing so they indirectly work to reduce GHG emissions.

TABLE 3.1 EDF MAJOR CORPORATE PARTNERS AND PROJECTS

Company Proiect S Goals Enable cost-effective environmental evaluation in product design SC Johnson · Evaluate consumer preferences Results· Developed software tool named MERGE to assess and improve the environmental profile of · product packaging 6 Results Switched from polystyrene foam "clamshells" to paper-based wraps for its sandwich · packaging, providing a 70-90% reduction in sandwich packaging volume, reducing landfill McDonald's space, energy used and pollutant releases over the Iifecycle of the package Reduced paper use by 21 % in napki ns. and incorporated 30% postconsumer recycled content · Asked suppliers to incorporate 35% postconsumer recycled content into all corrugated shipping · boxes Develop a hybrid delivery fleet, currently partnership has helped put more than 170 hybrid FedEx trucks on the road. 7 Goals" Starbucks Decrease waste by increasing the use of reusable cups and dishes ·• Reduce the environmental impact of disposable cups Goals9 Expand the use of reusable packaging UPS · Incorporate recycled content into packaging · Eliminate bleached paper from all packaging · Maintain product perfonnance, appearance and cost-competitiveness

4 EDF, "Corporate Partnerships: Starbucks." Available from http://www.edf.org/page.cfm?tagID=1456. Internet; accessed 20 February 2009.

5 EDF, "Corporate Partnerships: SC Johnson." Available from http://www.edf.org/page.cfm?tagID=1455. Internet; accessed 24 April 2009.

6 EDF, "Corporate Partnerships: McDonald's." Available from http://www.edf.org/page.cfm?tagID=1448. Internet; accessed 24 April 2009.

7 EDF, Corporate Partnerships: FedEx." Available from http://www.edf.org/page.cfm?tagID=1453. Internet; accessed 24 April 2009.

8 EDF, "Corporate Partnerships: Starbucks." Available from http://www.edf.org/page.cfm?tagID=1456. Internet; accessed 20 February 2009.

9 EDF, "Corporate Partnerships: UPS." Available from http://www.edf.org/page.cfm?tagID=1457. Internet; accessed 24 April 2009. 22

TABLE 3.1 CONTINUED

DuPont Ensuring the responsible development of nanotechnology 10

Kohlberg Kravis Roberts & Co. Developing tools for companies to track and assess environmental improvements II

ll Goals Develop a climate-neutral fleet management service that achieves measurable greenhouse gas · emissions reductions and produces business benefits. Steps include: 0 Measuring and reporting emissions. PHH Arval 0 Reducing emissions through improved vehicle selection and use 0 Offsetting the remaining emissions, and 0 Communicating the benefits. Demonstrate the environmental and business benefits of climate-neutral fleet management ·• Improve environmental performance throughout the fleet management indu,-try Wal-Mart Factoring the environment into the equation of doing business i3

Citigroup Improved paper management l4

WWF Climate Savers

The WWF Climate Savers program is a corporate partnership program of the

World Wildlife Fund (WWF). The WWF is an NGO that operates globally with offices

in 47 countries and international headquarters in Switzerland, Their focus is on wildlife

conservation, protection of wildlife habitat, and climate change. The Mission of WWF is

"to stop the degradation of the planet's natural environment and to build a future in which

humans live in harmony with nature, by: conserving the world's biological diversity,

10 EDF, "Corporate Partnerships: DuPont." Available from http://www.edf.org/page.cfrn?tagID=1459, Internet; accessed 24 April 2009,

I I EDF, "Corporate Partnerships: Kohlberg Kravis Roberts & Co." Available from http://www.edf.org/page.cfrn?tagID=22237, Internet; accessed 24 April 2009.

12 EDF, "Corporate Partnerships: PHH ArvaL" Available from http://www.edf.org/page,cfrn?tagID=1460, Internet; accessed 24 April 2009,

13 EDF, "Corporate Partnerships: Wal-Mart," Available from http://www,edf.org/page.cfrn?tagID=1458, Internet; accessed 24 April 2009,

14 EDF, "Corporate Partnerships: Citigroup." Available from http://www.edf.org/page.cfm?tagID=1451. Internet; accessed 24 April 2009, 23

ensuring that the use of renewable natural resources is sustainable, and, promoting the

reduction of pollution and wasteful consumption.,,15

The WWF Climate Savers program is designed to bring measurable reductions in

CO2 emissions above those that the company would engage in normally. In addition the

program shows that by decreasing GHG emissions shareholder value can be increased.

Targets are set for the companies involved in the program through negotiations between the WWF and the company with outside organizations to monitor and verify compliance with the agreement. The target areas that agreements cover are "Energy efficiency of products, energy efficiency in process or facilities, Energy-saving products, Transport efficiency, Fuel switching to natural gas or increased use of co-generation, Conversion to renewable energy (supply, use, marketing), Financial schemes for the innovations above.,,16 The Climate Savers program works to attract companies using the WWF

"brand" and credibility of the WWF. The current goal of the Climate Savers program is

"by 2010, Climate Savers companies will collectively have reduced their CO2 emission by over 14 million tons a year." 17 The Climate Savers program focuses on reducing

GHG emissions and bringing industry leading companies together on the issue of climate change.

15 WWF, "Who We Are." Available from http://www.panda.org/who_we_are/. Internet; accessed 24 April 2009.

16 WWF, "Climate Savers: How does it work?" Available from http://www.panda.org/what_we_dolknowledge_centres/climate_ change/solutions/business jndustry/climat e_saverslhow_does_it_work}. Internet; accessed 19 February 2009.

17 WWF, "Climate Savers: About us." Available from http://www.panda.org/what_we _ dolknowledge _centres/climate _ change/solutions/business _industry/climat e_savers/how_does_it_workJ Internet; accessed 19 February 2009. 24

TABLE 3.2

COMPANIES IN THE CLIMATE SAVERS PROGRAM

Lafarge Catalyst Novo Nordisk Xanterra Parks & Resorts Nike Hewlett Packard Polaroid The Coca Cola Company Nokia IBM Sagawa JohnsonDiversey Nokia Siemens Networks Johnson & Johnson Spitsbergen Travel The Collins Companies Tetra Pak Sony

TABLE 3.3

COMPANY GOALS FOR THE CLIMATE SAVERS PROGRAM

By 20 I 0, Lafarge pledged to reduce its absolute gross emissions in industrialized countries to 10% below Lafarge 1990 levels, as well as to reduce worldwide net emissions per tonne of cement to 20% below 1990 levels,18 In 2001, Nike set a target to reduce CO, emissions from business travel and facilities to 13% below 1998 Nike levels by the end of2005, Nike also committed to create baselines for major subcontracted footwear and clothing manufacturing facilities, and determine an emissions reduction strategy, 19 HP promised to reduce life cycle emissions from operations and from the use of its products by 6 million tonnes (Mt) below 2005 levels by 20 I 0, HP committed to a more than 15% absolute reduction in energy Hewlett Packard consumption in its operations over 2005 levels, in the face of strong growth, and a more than 25% reduction in the energy used by its products,2{)

Novo Nordisk Novo Nordisk, the global pharmaceutical company known for its leadership in diabetes care, has made a commitment to reduce its carbon dioxide emissions by 10% in absolute figures from 2004 to 2014, 'I

18 WWF, "Lafarge," Available from http://www.panda.orglwhat_we_do/how_we_ worklbusinesseslbusiness jndustry/climate_savers/partner_co mpanies/lafarge/. Internet; accessed 24 April 2009.

19 WWF," Nike." Available from http://www .panda.orglwhat_we _ do/how _ we _ worklbusinesseslbusiness jndustry/climate_savers/partner_co mpanies/nike/. Internet; accessed 24 April 2009.

20 WWF," Hewlett Packard." Available from http://www .panda.orglwhat_ we _ do/how _ we _ worklbus inesseslbus iness _industry/climate _savers/partner_co mpanies/hp/, Internet; accessed 24 April 2009.

21 WWF, "Novo Nordisk." Available from http://www .panda.orglwhat_ we _ do/how _ we _ worklbusinesseslbus iness_ industry /climate_ savers/partner_co mpanies/novo _nordiskl. Internet; accessed 24 April 2009. 25

TABLE 3.3 CONTINUED

Johnson & Johnson pledged to reduce its greenhouse gas emissions from all facilities worldwide to 7% Johnson & Johnson below 1990 levels by 2010, and to reduce vehicle fleet emissions by 30% per mile driven over 2003 levels by2010,22 The Coca Cola Company joined Climate Savers in 2008, committing to stabilize emissions system-wide The Coca-Co la Company and to a 5 percent absolute emissions reduction in Annex I countries by 2015 compared to baseline year 2004 for both targets.23

The World Business Council for Sustainable Development (WBCSD)

The WBCSD is an international NGO with offices in the U.S. Their

mission is "to provide business leadership as a catalyst for change toward sustainable

development, and to support the business license to operate, innovate and grow in a world

increasingly shaped by sustainable development issues.,,24 They focus on working with

business to understand and deal with the issues of climate change and sustainable

development.

The WBCSD is an organization that brings "200 leading international

companies,,25 together to work on the issues of climate change, sustainable development,

and energy use. To work toward these issues the WBCSD takes a variety of approaches,

working with companies to address the issues specific to their industries and also in some

22 WWF," Johnson & Johnson." Available from http://www.panda.orglwhat_we_dolhow_we_ worklbusinesseslbusiness jndustry/climate_ savers/partner_co mpanies/johnson~ohnsonl. Internet; accessed 24 April 2009.

23 WWF," The Coca-Cola Company." Available from http://www.panda.orglwhat_we_dolhow_we _ worklbusinesseslbusiness_industry/climate _savers/partner_co mpan ies/the _coca_co la_company /. Internet; accessed 24 Apri I 2009.

24World Business Council for Sustainable Development, "About the WBCSD.". Available from http://www .wbcsd.orgltemp lates/T emp late WBCS DSllayout.asp ?type=p&MenuId=NjA. Internet; accessed 24 April 2009.

25 World Business Council for Sustainable Development,"About the WBCSD." Available from http://www.wbcsd.orgitemplates/TemplateWBCSDS/layout.asp?type=p&MenuId=NjA&doOpen=I&Click Menu=LeftMenu. Internet; accessed 20 February 2009. 26 cases to create measurable GHG emission reductions. The WBCSD is working with sectors of the economy that are responsible for significant GHG emissions and developing strategies for understanding the problems associated with each of the sectors and giving companies a forum to discuss the problems with each other. The projects that the WBCSD is involved in are "Electricity Utilities Project, Sustainable Forest Products

Industry, Tire Industry Project, Sustainable Mobility Project, Mining, Minerals and

Sustainable Development, and Cement Sustainability Initiative.,,26 Of these projects the only one that has caused reductions in GHG emissions is the Cement Sustainability

Initiative. This project is unique in that the cement companies approached the WBCSD to initiate the project.

The CSI has made steady progress over the past eight years with consistent reductions in emissions intensity, i.e. reducing C02 emissions per tonne of cement produced. Between 1990 and 2006, CSI members reduced by 12% their average C02 emissions intensity.27

The companies that founded this project with the WBCSD were interested in reducing their carbon footprint. This set the stage for a cooperative partnership between theses groups. Three of the major players in the industry came together to determine what sustainable development meant to the companies. This was followed by a two year study on the topic followed by the companies setting goals on how they can achieve sustainable development alone and with each other. 28 As part of these goals companies must publish

26 World Business Council for Sustainable Development, "Projects." Available from http://www .wbcsd.org/templates/Temp late WBCS D 1Ilayout.asp?type=p&MenuId=Njg&doOpen= 1&Cl ick Menu=LeftMenu. Internet; accessed 28 April 2009.

27 World Business Council for Sustainable Development, Climate Actions. SA, Switzerland: Atar Roto Presse, 2008. pI

28 World Business Council for Sustainable Development, The Cement Sustainability Initiative: Our Agenda for Action. SA, Switzerland: Atar Roto Presse, 2002. p 15 27 base line emissions and then publish goals for emissions reductions by 2006.29 The

WBCSD Cement Sustainability Initiative has been hailed as one of the successful sector based projects between companies and NGOs. The WBCSD has some successful projects in terms of GHG emissions reductions, while others simply offer companies a forum to discuss the problems of GHG emissions.

TABLE 3.4

NOTABLE COMPANIES PARTNERING WITH THE WBCSD:

OF THE 209 PARTNERS

BP Unilever DuPont General Motors Lafarge Johnson & Johnson Duke Energy Honda Aracruz Celulose The Coca-Cola Company General Electric Shell Weyerhaeuser 3M IBM Volkswagen HeidelbergCement Dow Chemical Alcoa

United States Climate Action Partnership (USCAP)

USCAP is a partnership of companies that are looking to government to create legislation to limit GHG emissions. USCAP is calling for "a regulated economy-wide, market-driven approach to climate protection.,,30 The founding members of US CAP are a mix of companies and NGOs, including many companies from high-emitting sectors of the economy. The companies that are members of US CAP have made a pledge to work toward sustainable development. "We, the members of the U.S. Climate Action

Partnership, pledge to work with the President, the Congress, and all other stakeholders to

29 IBID pl9

30 USCAP, "About USCAP." Available from http://www.us-cap.orglaboutlindex.asp. Internet; accessed 22 February 2009. 28 enact an environmentally effective, economically sustainable, and fair climate change program consistent with our principles at the earliest practicable date.,,3l USCAP has laid out a plan of action for what the member companies would like to see in government legislation. However, there is no requirement of action in reducing member companies'

GHG emissions prior to legislation being put into place. "Some members (of USCAP) support opposing agendas,,32 suggesting that this partnership program may not be completely effective.

TABLE 3.5 USCAP MEMBER COMPANIES

Alcoa ConocoPhillips Exelon Corporation NRG Energy, Inc. Ford Motor Boston Scientific Corporation Deere & Company PepsiCo ComjJany BP America Inc. The Dow Chemical Company FPL Group, Inc. Johnson & Johnson Caterpillar Inc. Duke Energy General Electric PG&E Corporation Chrysler LLC DuPont PNM Resources Shell General Motors Corp. Marsh, Inc. Rio Tinto Siemens Corporation Xerox Corporation

TABLE 3.6

USCAP NGO MEMBERS

The Nature Conservancy Environmental Defense Fund Natural Resources Defense Council World Resources Institute Pew Center on Global Climate Change

31 EDF, "A Call For Action." Available from http://www.us-cap.orglUSCAPCaIlForAction.pdf. Internet; accessed 22 February 2009. PI 0

32 Elgin, Ben. "Green-- Up to a Point." Business Week, no. 4073 (03/03 2008): P26. 29

Ceres

Ceres is an organization that brings companies, investors, and stakeholders together to address the issues of climate change. Ceres has a network of "institutional investors and financial institutions that promotes better understanding of the financial risks and investment opportunities posed by climate change. ,,33 This network of investors has collective assets of more than $7 trillion.34 Ceres has worked to launch the Global

Reporting Initiative, a global standard for reporting "the economic, environmental, and social performance of corporations, governments and non-governmental organizations.,,35

By bringing together the different groups and stakeholders Ceres offers a unique perspective on the issues of climate change. Due to the network of institutional investors it is more likely that participating companies will attempt to align their business practices with those desired by the organization as a whole to make themselves more attractive to the institutional investors. The mission of Ceres is to integrate sustainability into capital markets for the health of the planet and its people. To achieve its mission they bring

NGOs and other stakeholders, investors and companies together to discuss the problems of climate change and sustainable business.

TABLE 3.7 NOTABLE COMPANIES OF THE 83 PARTNERING WITH CERES

American Airlines Clif Bar & Company ebay Sun Microsystems Bank of America Corporation Coca-Cola Company General Motors Corporation Sunoco, Inc.

33 Ceres, "Ceres Annual Report."AvaiJable from http://www.ceres.orgiDocument.Doc?id=385. Internet; accessed 25 February 2009.

34 Ibid

35 Ceres, "About Us." Available from http://www.ceres.org/Page.aspx?pid=415. Internet; accessed 25 February 2009. 30

TABLE 3.7 CONTINUED

Ben & Jerry's Homemade. Inc. Dell Inc. Nike, Inc. Time Warner BP PG&E Corporation Virgin America

Company Profiles

In trying to understand why companies partner with NGOs it is important to understand what the goals of the company to see why they participate with different

NGOs.

Starbucks

Starbucks Coffee Company is a roaster and retailer of specialty coffee. The mission of Starbucks is "To inspire and nurture the human spirit- one person, one cup, and one neighborhood at a time.,,36 Starbucks also has an environmental mission statement; "Starbucks is committed to a role of environmental leadership in all facets of our business. ,,37 These mission statements are important to understand how Starbucks wants to place itself in the market and how they see the problems of climate change.

Starbucks is operating over 16000, locations in 44 countries and is committed to sourcing its coffee beans ethically and choosing the highest quality beans. As part of this commitment Starbucks developed the C.A.F.E. principals for ethical sourcing of coffee.

As part of this process, Starbucks looked to the stakeholders in the issue to develop the

36 Starbucks, "Our Starbucks Mission." Available from http://www.starbucks.com/mission/default.asp. Internet; accessed 28 April 2009.

37 Ibid 31 most comprehensive sourcing program possible.38 Starbucks has worked with a number of different NGOs on different issues. Currently Starbucks is working with Conservation

International, the Earthwatch Institute, World Resources Institute, Global Green USA, and The Environmental Defense Fund. Starbucks has stated that the partnership with

Conservation International is focusing on maintaining biodiversity and planting of trees in coffee growing regions of Mexico. 39 The Starbucks partnership with Earthwatch focus on helping coffee growers understand the issues and practices that have developed in coffee growing. "The joint Starbucks-Earthwatch program not only provides tools and options to the farmers to better manage their farms, but also helps raise awareness in the global community. ,,40 Starbucks is working with the World Resources Institute to purchase and support renewable and green electricity. Starbucks has partnered with

Global Green USA to help raise awareness about the problems if climate change and bring government, business, and stakeholders together to take action on climate change.

The Environmental Defense Fund partnered with Starbucks to address the issue of paper use in cups and Starbucks cup and dish policy. Starbucks believes that climate change is a significant threat to their business partly because the coffee growing regions around the world are fragile ecosystems and are in the tropics where some of the most significant

38 Starbucks, "Being a Responsable Company." Available from http://www.starbucks.com/aboutus/gr.asp. Internet; accessed 28 April 2009.

39 Conservation International, "Starbucks." Available from http://www .conservation.orgld iscover/partnershipl corporate/Pages/starbucks.aspx. Internet; accessed 28 April 2009.

40 Earthwatch Institute, "2007 Press Releases." Available from http://www.earthwatch.org/newsandevents/pressreleases/2007~ressJeleases/02_01_07_starbucks.html. Internet; accessed 28 April 2009. 32

effects of climate change will occur. They also believe that companies that fail to address

climate change will be adversely affected by climate change. 41

FIGURE 3.1

IMPORTANCE OF TOPICS COVERED IN STARBUCKS 2006 CORPORATE

SOCIAL RESPONSIBILITY REPORT

Contents In The Web ReQort Contents In The Printed ReQort

Coffee Purchasing Practices Coffee Purchasing Practices • Fair Trade Certified™ coffee • Prices paid to coffee farmers and suppliers • Respect for workers' human rights • Long-term availability of high-quality coffee Growth and Expansion • Impacts on local communities Environmental Impacts • Climate change • Energy consumption • Paper cups Health and Well ness • Products • Nutrition infonnation Workplace Practices • Culture and benefits • Satisfaction and engagement

Coffee Purchasing Practices Coffee Purchasing Practices • Organic and conservation • Charitable giving • Verification and transparency Environmental Practices • Partnerships • Access to credit • Water usage • Partner (employee) • Social investments • Waste and recycling volunteerism Environmental Impacts • Sustainable packaging Diversity • Store design and operations • Transportation/ • Workplace Workplace Practices distribution impacts • Supplier • Training and development Customer Concerns • Communities • Right to organize Sustainable Sourcing • rBGH dairy • Health and wellness • Supplier Code of Conduct • Marketing to youth • Health and safety • Human rights! working • Caffeine Managing Corporate Social Responsibility conditions Governance • Vision and priority setting • Executive compensation • Tea • Ethics and governance • Majority voting for • Paper Cocoa Sourcing Practices board members • Ethos ™ water Public Policy Responsible Marketing • Transparency Global Philanthropic Programs Stakeholder Engagement • Starbucks™ Liqueurs Local Community Engagemen

Important Very Impo~ SIGNIFICANCE OR POTENTIAL IMP ACT ON ST ARBUCKS ~

41 Carbon Disclosure Project, "CDP6 Greenhouse Gas Emissions Questionnaire - Starbucks Corporation." Available from http://cdproject.net/responses/public/Starbucks_Corporation_557 _ Corporate_GHG _Emissions_Response_ CDP6_2008.asp. Internet; accessed 29 April 2009. 33

The above figure represents how Starbucks views the importance of different issues to the company and to the various stakeholders. Knowing how important these different

issues are to Starbucks helps to drive internal decisions about corporate social responsibility.

Nike, a worldwide producer of apparel and footwear, is currently involved in a partnership with the WWF Climate Savers Program. The goals set forth by this program are to reduce total Tier 1 and 2 emissions42 by 13% from 1998 to 2005 and to eliminate the use of SF6 gas in shoes and evaluate cost effective best practices for the supply chain. 43 Nike believes that taking preemptive action on climate change will make sure that they are not exposed to regulatory risk and that by reducing GHG emissions they will create more profitable and sustainable business.44 Nike believes that it will be at risk to possible supply interruptions due to weather related events caused by changing climate in addition to the risk of climate change increasing demand for out of season products creating a shortage.

42 According to the Greenhouse Gas Protocol emissions are broken down into three scopes or tiers: Tier 1 emissions are all direct GHG emissions. Tier 2 emissions are indirect GHG emissions from consumption of purchased electricity, heat or steam. Tier 3 emissions are other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities (e.g. T&D losses) not covered in Scope 2, outsourced activities, waste disposal, etc.

43 Carbon Disclosure Project, "NIKE CLIMATE SAVERS FINAL REPORT 2005." Available from http://cdproject.netlresponses/public/attachedfiles/Responses/44741 /5 122/CDP6 _ Nike _AQ_att6.doc. Internet; accessed 29 April 2009.

44 Ibid 34

Lafarge

Lafarge is a worldwide producer of cement, aggregates and concrete and

gypsum.45 Lafarge sees that it faces risk associated with climate change due to the fact

that their operations span so many countries, some in the European Union (EU) that fall

under the EU's emissions trading system for GHG emissions as well as countries such as

the U.S., Canada, and Japan where the countries are developing standards and regulations

for GHG emissions that will affect the business. Since Lafarge's business is energy

intensive it is likely that they will see increasing energy prices. The emissions in cement production are focused upstream in the decarbonation of limestone and form the kiln heating process.46 Lafarge is involved with the WBCSD Cement Sustainability Initiative and the WWF Climate Savers program. Lafarge was important in bringing cement companies together to discuss the issues of climate change. Lafarge, Cemex, Cimpor,

Heidelberg Cement, Holcim , Italcementi, Siam Cement, Taiheiyo Cement, and

Votorantim cement companies came together to develop the Cement Sustainability

Initiative with the WBCSD.47 The objectives of this program are to reduce the industry's carbon footprint, increase stakeholder engagement, and to understand the industry's social contributions. The partnership with the WWF started in 2000 and focused

45 Carbon Disclosure Project, "CDP6 Greenhouse Gas Emissions Questionnaire - Lafarge.". Available from http://cdproject.net/responses/public/Lafarge_2405_Corporate _ GHG _Emissions_Response _ CDP6 _ 2008.as p. Internet; accessed 29 April 2009.

46 Ibid.

47 World Business Council for Sustainable Development, " Cement Initiative assesses progress made on its "Agenda for Action" .". Available from http://www .wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&Objectld= 14937. Internet; accessed 29 April 2009. . 35

emissions targets out to 2010. The target set with the WWF is to reduce emissions 20%

- per ton of cement produced and cut absolute emissions 10% in industrialized countries.

Lafarge was the first cement company to set emissions reductions goals. 48

Boeing

Boeing produces commercial aircraft, military hardware, and space products.

Boeing sees few risks from climate change or regulation of GHG emissions. Boeing currently has goals of reducing GHG emission intensity by 25% from 2008 by 2012.49

Boeing is currently involved with the EPA's Climate Leaders program, the WBCSD, The

Nature Conservancy, and the Pew Center on Climate Change. By partnering with the

EPA Boeing pledged to reduce its GHG emissions one percent below 2007 levels by

2012. 50 Boeing works with the WBCSD to work with other companies to discuss issues of sustainable development, best practices, and advocate business positions on the above issues. 51 Currently Boeing is working on developing the 787 to be more fuel efficient than any of their other planes.

48 Carbon Disclosure Project, "CDP6 Greenhouse Gas Emissions Questionnaire - Lafarge." A vailable from http://cdproject.netiresponses/public/Lafarge_2405_Corporate_GHG_Emissions_Response_CDP6_2008.as p. Internet; accessed 29 April 2009.

49 Carbon Disclosure Project,"CDP6 Greenhouse Gas Emissions Questionnaire - Boeing Company." Available from http://cdproject.netiresponses/publiclBoeing_Company_3237 _Corporate _ GHG _Emissions _Response_COP 6_2008.asp. Internet; accessed 29 April 2009.

50 U.S. Environmental Protection Agency, "Partners." Available from http://www.epa.gov/stateply/partners/index.html. Internet; accessed 29 April 2009.

51 Boeing. "Environmental Affiliations," Available from http://www.boeing.comiaboutus/environment/affiliations.html. Internet; accessed 29 April 2009. 36

Costco

Costco operates membership warehouse locations selling all number of consumer

products. In 2007 Costco formally developed a corporate sustainability group to ensure

that Costco is run in an environmentally friendly manner. They say that they have

completed a GHG inventory and have set goals to measurably reduce their carbon

footprint. They are currently involved in designing locations that meet LEED silver

standards. One of the designs that have been commonly built is consistent with the

LEED silver standard. Their first LEED certified location opened in 2008. 52

Weyerhaeuser

Weyerhaeuser is a forestry and pulp and paper company based out of the Pacific

Northwest. They are one of the largest owners of softwood timber in the U.S.

Weyerhaeuser has committed to reduce GHG emissions 40 percent by 2020 from a 2000

baseline. 53 In 2007 they had 7.5 million metric tons of C02e of direct and indirect emissions, they had set aside land for afforestation resulting in a credit of 2.6 million metric tons of C02e, and they claim that their products captured and stored 11.2 million metric tons ofC02e. Weyerhaeuser in 2007 sold 75,000 Green Tags from the carbon capture and storage from their operations. 54

52 Costco Wholesale, "Annual Report 2007." Available from http://media.corporate- ir.netimedia_fiIes/iroI/83/83830/2008_AR_Cost.pdf. Internet; accessed 29 April 2009.

53 Weyerhaeuser, "Progress Toward Sustainability Goals." Available from http://www.weyerhaeuser.com/Sustainability/ProgressTowardGoals. Internet; accessed 29 April 2009.

54 Weyerhaeuser, "Climate Change ."Available from http://www.weyerhaeuser.com/SustainabilitylFootprintiClimateChange. Internet; accessed 29 April 2009. 37

In understanding the factors that motivate businesses to partner with NGOs on the issue of climate change it is important to understand the types of programs and partnerships that exist. These programs can be on the scale from actively working with companies to find real reduction in GHG emissions to organizations that want to appear that they are addressing the issue of climate change. Along that scale is the willingness of companies to be open to the organizations and the public about their actions. The more in depth the partnership, the more open a company needs to be. However if the company only wants to appear that they are working on the issue of climate change then they will choose the organization that suits their needs. The types of partnerships that a company involves itself in is telling of the company's commitment to climate change. It is also important to understand the companies and how they see their actions and what they would like to gain or the actions they take. CHAPTER IV

ANALYSIS

Methodology

I performed content analysis to investigate the factors that motivate companies to

partner with NGOs. Content analysis uses analysis of documents to determine how the

terms within a document are related. Part of the content analysis includes a frequency

count of key terms to compare the multiple sources. Content analysis is seen as an

effective way to gain information about a subject based on the content of company

documents.

In looking at what motivates companies to partner with NGOs on the issue of

climate change, I analyzed companies' responses to the Carbon Disclosure Project in addition to the companies' sustainability report, corporate social responsibility report, or annual report to determine how the companies discuss the issue of climate change. I investigated several key terms to see how frequently they occurred to determine if companies that partner with NGOs discuss the terms more frequently than the companies that do not partner with NGOs. The terms were selected after reading through the documents to see what language was used by all the companies when they addressed the issue of climate change. In addition, after identifying the total number of occurrences I looked to see how several of these terms were used by the companies to determine what

38 39

issues the companies find important or if the company or if the company used the terms

to discuss general business principals.

TABLE 4.1

KEY TERMS

Awareness Renewable Risk Reduction Consumer Conservation Sustainable Footprint Mitigation Offset Climate change Greenhouse Gas Partner GHG Emissions NGO

The companies I chose to analyze fell into two groups: companies that actively

work with NGOs to create actual and concrete emissions reductions, and companies that

have either no partnerships or partnerships that do not entail reducing GHG emissions. In

the first group I selected Starbucks, Nike, and Lafarge. I selected these companies since

they have taken significant steps to reducing their GHG emissions in addition to being

recognizable brands. The companies in the second group are Boeing, Costco, and

Weyerhaeuser. These companies were selected because they have limited or no partnerships with NGOs.

Data

The data I am analyzing comes from several sources: the Carbon Disclosure

Project, the company's sustainability reports, corporate social responsibility reports, annual reports, and NGO partner websites. In this data I am searching for key terms that may indicate why a company is partnering with a NGO. Companies may also be likely to provide more information about their environmental commitments to the public when they partner with NGOs. I searched for the occurrence of key terms within surveys from 40

the Carbon Disclosure Project and other company documents. I then took the averages of

the occurrences in the groups of companies, the companies actively partnering with

NGOs and the companies that are not actively partnering. I also looked at the occurrence

of these terms per thousand words to try and account for how many and how long the

companies' documents are. Based on the occurrence of key terms may indicate the

companies intent on climate change.

Carbon Disclosure Project

The mission of the Carbon Disclosure Project is to "collect and distribute high quality information that motivates investors, corporations and governments to take action to prevent dangerous climate change."\ The Carbon Disclosure Project has surveyed companies annually starting in 2003 and compiles information on companies' environmental strategies, emissions, and actions as part of their own reports on corporate environmental goals. The surveys that they receive are voluntarily submitted by the responding companies and provide varying amounts of information on their environmental strategy and practices.

In analyzing the companies I looked at the Carbon Disclosure Project surveys to see how companies address climate change over time. The Carbon Disclosure Project has conducted six surveys starting in 2003 with the most recent survey in 2008. The responses to the survey indicates that companies that are actively involved with NGOs, and are more likely to publicize their actions on the issue of climate change

\ Carbon Disclosure Project. "About COP." Available from http://cdproject.netlabout-cdp.asp. Internet; accessed 29 April 2009. 41

TABLE 4.2

CARBON DISCLOSURE PROJECT SURVEY RESPONSES

Starbucks Nike Lafarge

Responded but not Publicly CDPl Did not Respond Publicly Available Available Responded but not Publicly CDP2 Publicly Available Publicly Available Available Responded but not Publicly CDP3 Publicly Available Publicly Available Available CDP4 Publicly Available Publicly Available Publicly Available COPS Publicly Available Publicly Available Publicly Available CDP6 Publicly Available Publicly Available Publicly Available

Boeing Costco Weyerhaeuser

COP I Did not Respond Did not Respond Did not Respond CDP2 Did not Respond Did not Respond Publicly Available Responded but not Publicly CDP3 Did not Respond Publicly Available Available Responded but not CDP4 Did not Respond Pub licly A vailab Ie Publicly Available Responded but not COPS Did not Respond Publicly Available Publicly Available COP 6 Publicly Available Publicly Available Publicly Available

In looking at how the companies responded between the companies actively working with NOOs and those now working with NOOs in the first group (Lafarge, Nike, and Starbucks) who are partnering with NOOs 14 of the 18 CDP surveys were publicly available. In the second (Boeing, Costco, and Weyerhaeuser) who are not partnering with NOOs 7 ofthe 18 CDP survey responses were publicly available. In the group working with NOOs, 17 of the 18 surveys were responded to. While in the group not actively partnering with NOOs, 10 of the 18 surveys were responded to. This indicates 42

that companies that partner with NGOs appear to more freely publicize their actions,

intentions, and policies about climate change.

TABLE 4.3

OCCURRENCES OF KEY TERMS IN COMPANY DOCUMENTS

A verage of Companies Average of Companies Not Ratio of Partnering Partnering With NGOs Partnering With NGOs to Not Partnering Awareness 7 3 2.2 Consumer 38 10 3.6 Mitigation 6 0 Renewable 46 26 1.7 Conservation 14 29 0.5 Offset 26 12 2.2 GHG 108 62 1.8 Risk 77 67 l.l Sustainable 67 48 1.4 Climate 115 55 2.1 change Emissions 411 188 2.2 Reduction 127 59 2.2 Footprint 36 8 4.5 Greenhouse 38 60 0.6 Gas NGO 22 0 Partner 58 17 3.4

In looking at the average number of occurrences of the key terms, the average of

the companies that are actively partnering with NGOs exceeded that of the companies

that are not actively partnering with NGOs except for the terms conservation and

greenhouse gas. These exceptions can be explained by Weyerhaeuser. While they are

not partnering with NGOs they have taken action on the issue of climate change.

However, some of the policies that they engage in are seen as contentious by the environmental community. Therefore, Weyerhaeuser is not actively partnering with

NGOs. However, they still publicize their actions on climate change since they have the 43

ability to engage in discussion with their stakeholders. The key terms are a good

indication of how companies that are partnering with NGOs appear to be more open to

discussing climate change and the issues surrounding it than companies that have not

partnered with NGOs. When looking at the ratio of the averaged number of occurrences

of the two groups most are greater than one indicating that the average number of

occurrence of the key terms are greater in the group that is actively partnering with

NGOs.

Table 4.4

AVERAGE KEY TERM OCCURRENCE PER THOUSAND WORDS

Partnering With Not Partnering With Ratio of Partnering NGO NGO to Not Partnering Awareness 0.155 0.136 1.1 Consumer 0.583 0.13 4.5 Mitigation 0.205 0 Renewable 1.074 0.827 1.3 Conservation 0.447 1.106 0.4 Offset 0.55 0.188 2.9 GHG 2.128 1.835 1.2 Risk 1.451 1.442 1.0 Sustainable 1.306 1.319 1.0 Climate change 2.549 1.845 1.4 Emissions 8.165 6.392 1.3 Reduction 2.282 1.728 1.3 Footprint 0.547 0.265 2.1 Greenhouse Gas 0.662 1.794 0.4 NGO 0.394 0 Partner 0.983 0.51 1.9

In looking at the data above all but three terms occurred more frequently with companies partnering with NGOs. The exceptions are conservation, sustainable and greenhouse gas. Boeing tends to shift the importance in occurrences per thousand words 44

because they discussed climate change in the fewest number of words. In addition

Weyerhaeuser has greater than average occurrence in those three terms, indicating that

while they are not actively partnering with NGOs they are still discussing climate change.

Because Weyerhaeuser is publicizing its views on climate change because their

accounting shows that they have negative GHG emissions where many environmental

groups would argue that they do not. However, overall it appears that the companies that

are partnering with NGOs want to discuss their actions about climate change at greater

length. But the number of times these terms occurred was greater than the occurrences

for companies that did not partner with NGOs indicating that companies that partner with

NGOs are more open about their actions.

From TABLES 4.5 and 4.6 certain terms were selected for each company based on whether the term occurred outside the average number occurrences. Therefore they may be interesting or telling of the companies' positions on climate change. Once I selected several terms I went back through each of the companies' documents to determine how the terms are used. Since most of these terms can be used to describe climate change and general business theories and practice, it is important to understand how the companies are using the terms. 45

TABLE 4.5

OCCURENCES OF KEY TERMS BY COMPANY

Starbucks Lafarge Nike Average # of Average # of Average # of Occurrences of Occurrences of Occurrences of Companies Companies Companies Partnering with Partnering with Partnering with Occurrences NGOs Occurrences NGOs Occurrences NGOs Awareness 7 7 3 7 12 7 Consumer 17 38 5 38 91 38 Mitigation 14 6 0 6 4 6 Renewable 53 46 22 46 63 46 Conservation 29 14 4 14 8 14 Offset 26 26 5 26 47 26 GHG 83 108 61 108 180 108 Risk 44 77 81 77 105 77 Sustainable 31 67 liS 67 52 67 Climate change 109 115 95 115 142 115 Emissions 281 411 408 411 543 411 Reduction 66 127 III 127 205 127 Footprint 13 36 13 36 83 36 Greenhouse Gas 21 38 20 38 73 38 NGO 12 22 15 22 40 22 Partner 28 58 36 58 110 58

Boeing Costco Weverhaeuser Average # of Average # of Average # of Occurrences of Occurrences of Occurrences of Companies Not Companies Not Companies Not Partnering with Partnering with Partnering with Occurrences NGOs Occurrences NGOs Occurrences NGOs Awareness 5 3 0 3 5 3 Consumer 0 10 24 10 7 10 Mitigation 0 0 0 0 0 0 Renewable 21 26 6 26 52 26 Conservation 40 29 6 29 40 29 Offset 4 12 30 12 2 12 GHG 36 62 2 62 147 62 Risk 18 67 71 67 113 67 Sustainable 21 48 9 48 115 48 Climate change 49 55 0 55 116 55 Emissions 178 188 9 188 377 188 Reduction 45 59 36 59 96 59 Footprint 8 8 3 8 13 8 Greenhouse Gas 38 60 8 60 134 60 NGO 0 0 0 0 0 0 Partner 15 17 13 17 23 17 46

TABLE 4.6

OCCURENCES OF KEY TERMS PER THOUSAND WORDS BY COMPANY

Starbucks Nike Lafarge Average Occurrences Average Occurrences Average Occurrences Occurrence per 1000 words of Occurrence per 1000 words of Occurrencs per 1000 words of per 1000 Companies Partnering per 1000 Companies Partnering per 1000 Companies Partnering words with NGOs words with NGOs words with NGOs Awareness 0.286 0.155 0.127 0.1 55 0.053 0.155 Consumer 0.694 0.583 0.965 0.583 0.089 0.583 Mitigation 0.572 0.205 0.042 0.205 0.000 0.205 Renewable 2.164 1.074 0.668 1.074 0.392 1.074 Conservation 1.184 0.447 0.085 0.447 0.071 0.447 Offset 1061 0.550 0.498 0.550 0.089 0.550 GHG 3.388 2.128 1908 2.128 1086 2.128 Risk 1.796 1.451 1.113 1451 1.443 1451 Sustainable 1.266 1.306 0.551 1.306 2.101 1.306 Climate change 4.450 2.549 1.506 2.549 1692 2.549 Emissions 11.471 8.165 5.757 8.165 7.266 8.165 Reduction 2.694 2.282 2.173 2.282 1977 2.282 Footprint 0.531 0.547 0.880 0.547 0.232 0.547 Greenhouse Gas 0.857 0.662 0.774 0.662 0.356 0.662 NGO 0.490 0.394 0.424 0.394 0.267 0.394 Partner 1.143 0.983 1.166 0.983 0.641 0.983

Boei~ Costco Weyerhaeuser Average Occurrences Average Occurrences Average Occurrences Occurrence per 1000 words of Occurrence per 1000 words of Occurrence per 1000 words of per 100Q Companies Not per 1000 Companies Not per 1000 Companies Not words Partnering with NGOs words Partnering with NGOs words Partnering with NGOs Awareness 0.293 0.136 0.000 0.136 0.115 0.136 Consumer 0.000 0.130 0.228 0.130 0.161 0.130 Mitigation 0.000 0.000 0.000 0.000 0.000 0.000 Renewable 1.230 0.827 0.057 0.827 1.195 0.827 Conservation 2.343 1.106 0.057 1.1 06 0.919 1.1 06 Offset 0.234 0.188 0.285 0.188 0.046 0.188 GHG 2.109 1.835 0.019 1.835 3.378 1835 Risk 1054 1442 0.673 1.442 2.597 1.442 Sustainable 1.230 1.319 0.085 1.319 2.643 1.319 Climate change 2.870 1.845 0.000 1.845 2.666 1.845 Emissions 10.426 6.392 0.085 6.392 8.664 6.392 Reduction 2.636 1.728 0.341 1728 2.206 1.728 Footprint 0.469 0.265 0.028 0.265 0.299 0.265 Greenhouse Gas 2.226 1.794 0.076 1.794 3.080 1.794 NGO 0.000 0.000 0.000 0000 0.000 0000 Partner 0.879 0.510 0.123 0.510 0.529 0.510 47

Starbucks

TABLE 4.7

ANAL YSIS OF HOW SOME KEY TERMS BREAK DOWN

Starbucks Renewable: 20 purchase of renewable energy 7 investment in renewable energy 18 purchase of renewable energy offsets 8 reliance on renewable energy

Conservation: 5 Energy Conservation measures 7 Conservation international 3 Water energy conservation 5 Conservation principals 4 conservation coffee program 5 biodive1;'sity conservation

Partner: 19 Partner (Employee) 8 Green Power partnerships 1 Conservation International Partnership

In selecting these terms I evaluated terms that occurred more than average and that may be relevant to the company's business. In looking at Starbucks I understood that their business relied on coffee growing, and they also discussed how electricity was their prime source of GHG emissions. For these reasons I believe that it would be telling to investigate Starbucks use of conservation within their documents. Since Starbucks is actively involved with NGO partnerships I thought that looking at how they used partner would telling how they view their NGO partnerships. In Starbucks documents all their mentions of renewable focused on renewable energy and how they used, invested, and purchased it. This is expected since their partnership with WRI focuses on purchasing 48 green electricity. When I looked at how Starbucks used the term conservation it fell into several categories such as the conservation of resources, energy, their partnership with

Conservation International, and biodiversity conservation. I found it interesting how

Starbucks used the term partner. It was especially interesting that Starbucks referred to their employees as partners then most of the rest talked about the EPA's Green Power

Partnership.

From this data indicates that Starbucks sees that their business is at risk because of climate change and it is in their best interest to address the issue in many different ways. From purchasing renewable energy and conserving resources to working to protect biodiversity and work with local farmers on the issue of coffee growing practices. It also appears that Starbucks works to clearly communicate their environmental policy to the public since they are such a well know brand that focuses on being a leader on the issue of climate change.

Nike

TABLE 4.8

ANAL YSIS OF HOW SOME KEY TERMS BREAK DOWN

Nike renewable 36 renewable energy purchase 13 renewable energy credit 14 investment in renewable energy offset 32 Purchase of Carbon offsets 9 incorporating offset programs 3 investing in offsets 3 offset business risk 49

TABLE 4.8 CONTINUED

partner 13 WWF Climate Savers Partner 63 stakeholder partnerships 34 business partnerships

In selecting the terms I looked at for Nike I thought that Renewable, offset, and partner would be telling about the company's environmental policy. Nike is one of the founding members of the WWF Climate Savers program. They discussed how they plan to offset their energy use, the emissions from a gas they used in the soles of shoes, and how they use and purchased renewable energy in their facilities.

Nike clearly believes that partnering with stakeholders is important and a necessary part of doing business in these times. They also want to work to reduce their carbon footprint by purchasing renewable energy and offsetting a portion of their remaining emissions. Nike does have a focus on brand image and believes that an effective CSR policy will help to maintain their customer base. Nike also wants to be a leader on the issue of climate change as a way to be a source of information when the

U.S. government develops legislation on the issue of climate change.2

Lafarge

TABLE 4.9

ANAL YSIS OF HOW SOME KEY TERMS BREAK DOWN

Lafarge Sustainable 46 Sustainable development 2 WBCSD 6 Sustainable products 43 Sustainable construction

2 http://www.nikebiz.com/responsibility/documentslNike_FY05 _06_CR _ Report_ C.pdf 50

TABLE 4.9 CONTINUED

I business as usual is not a sustainable I Sustainable use and disposal of our products 3 Sustainable growth 7 Sustainable agenda 2 Cement Sustainable Initiative I Sustainable world 2 Sustainable future 2 Sustainable quarry 2 Sustainable corporations Footprint I carbon footprint methodology 3 assess the carbon footprint 8 environmental footprint I enhance the positive impacts of that footprint partner 15 partnership with WWF I WBCSD partnership 5 Industry Partners 2 Partner with the community 13 Partnership with stakeholders

In looking at how some of the key terms break down for Lafarge it is interesting

to see that they use sustainable to discuss either sustainable development or sustainable

construction, although this outcome can be explained by their partnership with the

WBCSD working on sustainability of cement. It is also interesting to see how frequently

they discuss their partnership with the WWF and then discuss other partnerships with

stakeholders.

Lafarge appears to focus their discussion on climate change toward the idea of

sustainable development and construction. While a well known brand their consumers

may not care as much about the environmental policies of Lafarge. However, they see

risk associated with government regulation on GHG emissions since it can affect the price of their product and this is an issue their large consumers would consider. 51

Boeing

TABLE 4.10

ANAL YSIS OF HOW SOME KEY TERMS BREAK DOWN

Boeing Conservation 4 Employee programs to develop conservation I corporate forums on conservation 18 energy conservation efforts 15 Water Conservation I community investment to create conservation I land conservation Renewable 3 renewable energy systems 10 Renewable electricity 6 production of renewable solar energy panels I -based Imperium Renewable I renewable alternative fuel Footprint 3 Reduction of environmental footprint I carbon footprint 4 noise footprint

In looking at how Boeing uses some of the key terms it appears that they are focusing on conservation efforts possibly as a cost saving measure since they focused on energy conservation and water conservation. They discuss renewable energy and their subsidiary company that produces solar panels. They discuss reducing their carbon footprint and also the noise footprint from their aircraft.

The issue of climate change for Boeing is focused on cost savings and on providing their employees an image of the company. Phil Condit, the former CEO of

Boeing, when asked why they advertise said that it was for the employees. Since Boeing is also a military contractor it may be one of the reasons NGOs may not work with them. 52

Costco

TABLE 4.11

ANAL YSIS OF HOW SOME KEY TERMS BREAK DOWN

Costco offset 30 related to general business

risk 70 related to general business I risks in energy costs

reduction 2 Greenhouse Gas Reduction Program 2 Waste stream reduction 2 Commute Trip_ Reduction 30 related to ~eneral business

In looking at these terms for Costco it is evident that since they only provided information about their commitment to climate change in their Annual Report that the terms do not reflect their discussion of climate change but discuss general business practices and programs. It is interesting that they discuss that they have set GHG reduction goals. However, they have yet to publish those goals. They discuss that since they are large users of electricity they will be at risk of fluctuation in energy prices due to changing demand.

Costco has only just started addressing CSR within the company has yet to fully understand the issues that they face. Despite this fact, it indicates that the belief that CSR is a necessary part of doing business. In their discussion of climate change they indicate that they are taking steps to reduce waste and reduce costs. 53

Weyerhaeuser

TABLE 4.12

ANAL YSIS OF HOW SOME KEY TERMS BREAK DOWN

Weyerhaeuser Conservation 5 special conservation areas 11 forest conservation 9 conservation of biological diversity 4 conservation groups 9 Conservation agreements 1 conservation of water 1 energy conservation I Conservation International reduction 91 emissions reductions 3 electrical usage reduction 2 water use reduction 1 chemical reduction partner 3 Energy Partner of the Year 4 Cherokee Investment Partners 16 stakeholder partnership I strategic partnerships

Overall Weyerhaeuser discussed the different terms in their relation to climate change and forestry. It is interesting how many times they talk about emissions reductions and stakeholder partnerships primarily on the issue of forest conservation.

It is telling how frequently Weyerhaeuser discusses emissions reductions. I believe that this is part of their self promoting of the fact they report that they have negative emissions and because of this they have the ability to sell carbon offsets. This is because forests naturally absorb carbon dioxide from the atmosphere.

Overall it is interesting that Starbucks, Nike, and Lafarge, the companies that partner with NOOs, discuss terms that deal with climate change more frequently than

Boeing, Costco, and Weyerhaeuser. This indicates that it is likely that companies that 54 partner with NGOs are likely to be more open about their actions on climate change and their environmental policy. However, there are exceptions to this, and Weyerhaeuser is a prime example. This is due to the fact that they are reporting a net negative carbon footprint and selling Green Tags from that emissions gap. Weyerhaeuser engages in some practices that are perceived to have net negative emissions such as using waste wood material to provide power to their facilities. Also they count carbon capture and sequestration from growing forests and the emissions stored in their wood products. In looking at the terms the companies use in discussing CSR and climate change they appear to be chosen based upon what the companies want to accomplish with their CSR. While the companies use many of the same terms they use them to discuss different issues. CHAPTER V

CONCLUSION

There are a wide variety of factors that motivate companies to partner with NGOs

on the issue of the environment: cost savings, stakeholder engagement, corporate social

responsibility, or an altruistic motivation. In looking at the data it is likely that

companies that partner with NGOs are more likely to disclose information about their

environmental policy than companies that do not partner with NGOs. The exception

from the data was Weyerhaeuser, who did not partner with NGOs. However they disclosed much of their information on a similar level to the companies partnering with

NGOs.

I had the opportunity to speak to Starbucks Corporate Social Responsibility about their partnerships with NGOs. Their decision to partner with NGOs was done on a case by case basis. In some of the cases they were approached by the NGOs and in other cases Starbucks sought out the correct partner to work with. Starbucks stated that they engaged in reducing their carbon footprint because of their mission statement: "Starbucks is committed to a role of environmental leadership in all facets of our business."l

Starbucks' commitment to the environment is evident in the documents they release to the public in addition to the partnerships that they engage in. When Starbucks partnered

1 Starbucks, "Our Starbucks Mission. "A vailable from http://www.starbucks.com/mission/default.asp. Internet; accessed 28 April 2009.

55 56

with the Environmental Defense Fund (EDF), their first ever NGO partnership, they were

apprehensive about the situation since when working with a NGO it is best if the

relationship is not a consulting relationship. They were concerned about the risk of

partnership since they do not have confidentiality agreements to keep the NGO from

reporting possibly damaging information about Starbucks. Working with the EDF,

Starbucks pushed the FDA to allow recycled content into food service products. This

successful partnership with the EDF made Starbucks more open to future partnerships

with NGOs.2

In attempting to understand the factors that motivate companies to address the

issues of climate change and partner with NGOs I understand that these issues are various

and diverse among companies. Many companies that are among the largest emitting

companies are reporting that they are taking action to reduce their carbon footprint but

often do not partner with NGOs on the issue since they don't want the additional

enforcement or possible negative publicity that a NGO can bring. Lafarge has chosen to

work with NGOs to reduce their emissions' intensity and also work on sustainable development of the cement industry to effect real change in their industry and work with their competition to reduce the negative effect their industry has on the world.

Many companies feel the need to look out for their stakeholders and try to address the issues that they value especially if the company provides consumer products. This is because consumers are often fickle and have the ability to switch what products they buy for others. Starbucks was highly criticized for exploiting farmers when they did not disclose for how much they purchased coffee. Finally they decided to disclose this information and the price per pound Starbucks paid was always higher than that of the

2 Mary Dixon, interview by Peder McDermott Johansen, Seattle, WA, 16 January 2009. 57

general market price. By disclosing this information they quelled discussion about unfair

purchasing practices. By simply withholding information form the stakeholders

Starbucks found themselves in the position of being wrongly criticized.

Corporate Social Responsibility today includes addressing some elements of

climate change, be it purchasing renewable energy or developing more efficient practices

to reduce energy use, water use, and so on to create a cost savings for the company. The

data is inconclusive about the specific factors that motivate companies to partner with

NGOs. However, companies that actively partner with a NGO work to address the issues

that caused the formation of the partnership and try to drive change in the industry or

develop government regulation to try and solve the problem. Companies will also

address the issues of climate change without partnering with NGOs if they feel that their

goals and the goals the NGO do not align or if other factors make the advantages of

partnering null.

While there are factors that companies that partner with NGOs share, the ultimate

decision about whether to partner with NGOs or not is in the hands on upper level

management and the CEO. There is risk involved in any partnership and management

needs to decide if the risk ofpartnering with a NGO is outweighed by the possible returns

of partnering with NGOs. From my research I can conclude that Starbucks partnered

with NGOs to work on issues that are important to the company and that they want bring

in more specialized expertise to accomplish their corporate social responsibility goals.

Starbucks sees their work on environmental issues as "their enlightened self interest,,3 because climate change has the ability to affect the future supply of coffee and causes climate change to become a business issue.

3 Ibid. 58

The motivations of the companies are diverse as to why they address climate change. However, many companies and NGOs believe that climate change is one of the larges problems we face today with the ability to change our world entirely. Hopefully companies, NGOs, stakeholders, and the government will work together to develop a plan to control GHG emissions and ultimately eliminate the need for partnerships between business and NGOs on the issue of climate change. The discussion within

NGOs, on the heels of the Obama administration being elected, is what actions do we take to help companies reduce GHG emissions significantly more than government regulation requires. Climate change will continue to be a problem we face since the problem is global in scale and cannot be solved by a handful of companies or a single country. SOURCES CONSULTED

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Miscellaneous

Mary Dixon, interview by Peder McDermott Johansen, Seattle, WA, 16 January 2009.