IKEA
IKEA’s vision is “to create a better everyday life for the many people.” Its business idea is “to offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them” (IKEA 2017).
IKEA says it works to “achieve quality at affordable prices for our customers through optimizing our entire value chain, by building long-term supplier relationships, investing in highly automated production and producing large volumes. Our vision also goes beyond home furnishing. We want to create a better everyday for all people impacted by our business.”
Total sales for IKEA Group were in 2015 were about 31.9 billion euros.Footnote 3 IKEA has 389 stores in 42 countries, 915 million visits and employs 183,000 workers.Footnote 4
IKEA’s policy for NGO interaction is the following: “The IKEA Group co-operates with companies, trade unions, NGOs and organizations to develop and reinforce the impact of our work within the social and environmental fields. From a social perspective IKEA Foundation has partnerships with UNICEF, Save the Children and UNDP. From an environmental perspective the IKEA Group has a partnership with WWF, the global conservation organization.”Footnote 5 This study will focus on IKEA’s cooperation with WWF (World Wide Fund for Nature).
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1.
Is the cause chosen in line with the corporate goals?
IKEA says it wants to create a better everyday for all people impacted by its business. Focusing on a cause related to key products in its value chain, wood and cotton, is in line with the corporate goal.
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2.
Is the company’s choice of NGO partner in line with the cause selected?
“WWF, the global conservation organization, is one of the world’s largest and most experienced conservation organizations with a global network in more than 100 countries. WWF’s mission 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, ensuring the sustainable use of renewable natural resources and promoting the reduction of pollution and wasteful consumption.” WWF is therefore an NGO partner in line with the cause chosen.
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Has the company set a concrete goal for its collaboration initiative?
(Search: Ikea WWF Partnership goal). On IKEA’s website, no concrete goal is described for the effect of the WWF forestry partnership, other than where it will be conducted. For the Better Cotton project, however, several concrete and well-described goals are presented on the website, such as, “The aim is for 2000 farmers in Pakistan to pass through the Farmer Field Schools during the 3-year period.”Footnote 6
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4.
To what extent has the company put all its assets to work, especially employees?
IKEA actively promotes its cooperation with the WWF on its homepage with a separate document that describes the collaboration. The focus has been on suppliers, because they deal with forestry and cotton production. The extent to which employees are aware of this partnership is not addressed.
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5.
How does the company communicate its NGO cooperation?
IKEA presents its NGO partnership thorough its website and product certification. This is a balanced approach. It is not evident to what extent the company promotes its NGO cooperation in stores and toward its customers.
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6.
Is the effect of the project evaluated?
(search: IKEA WWF partnership result) On IKEA’s website, the results of the WWF partnership are described generally without any concrete figures.Footnote 7 The results of the joint cotton partnership projects in India and Pakistan are thoroughly accounted for. Figures for reduced pesticide and water use, as well as increases in gross margins for farmers, are included.Footnote 8
Walmart
Walmart’s purpose and goal is “Saving people money so they can live better” (Walmart 2014).
Fiscal year 2016 revenues were $482.1 billion, and the company employs 2.3 million associates worldwide (http://corporate.walmart.com/newsroom/company-facts)
Walmart collaborates with stakeholders for positive change. “Meaningful collaboration with key stakeholders is essential to driving positive and sustainable change in the supply chain. This is why we continue to work with leading NGOs and take an active role in industry coalitions. We work to improve the effectiveness of our own responsible sourcing program and, ultimately, improve the lives of workers in our supply chain.”
From Walmart’s website under “Partnership,” here are some of the NGOs listed: the Alliance for Bangladesh Worker Safety, Coalition of Immokalee Workers, Ethical Trading Initiative and Global Social Compliance Program. This study will focus on Walmart’s cooperation with the Alliance for Bangladesh Worker Safety (Alliance), which started in 2013.
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Is the cause chosen in line with the corporate goals?
The Alliance was create to improve worker safety in Bangladeshi garment factories through training, factory assessment, safety, transparency and financial commitments. This cooperation is not directly in line with Walmart’s goal, but can be perceived as necessary to avoid accidents like the collapse of the Bangladesh factory Rana Plaza in 2013 that killed 1129 people (DePillis 2015).
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Is the company’s choice of NGO partner in line with the cause selected?
Because the cause is increasing safety and working conditions for employees in Bangladesh, the Alliance is a good partner. However, the Alliance is a relatively small NGO, with 27 member companies. In that sense the Alliance does not hold the same international respect as an NGO like the WWF. As a result, cooperation with the Alliance might not be as credible as other partnerships.
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Has the company set a concrete goal for its collaboration initiative?
On its website, Walmart writes about its 5-year undertaking to improve safety in garment factories in Bangladesh, but no explicit goals are set.Footnote 9
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To what extent has the company put all its assets to work, especially employees?
Walmart reports about the good work of the Alliance, but does not describe other “assets” being put to work.
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5.
How does the company communicate its NGO cooperation?
On its website Walmart describes the Alliance partnership, reporting, for example, the inspection of 587 factories and presentation of basic fire safety training for more than 1 million workers and managers. Other than this website information, and a link to the Alliance’s annual report, no other communication channels are readily available.
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Is the effect of the project evaluated?
(Search: Walmart Alliance for Bangladesh Worker Safety partnership result) On its website, Walmart refers to the Alliance annual report, which provides concrete figures for what the organization has accomplished. It has, for example, trained more than 1.2 million factory employees on basic fire safety, provided wages for more than 6600 workers, and documented that the number of employees who know how to react in case of an emergency has increased from 61% before training to 88% after training.Footnote 10
The body shop
Here are the company’s core values: “The Body Shop is a leader in promoting greater corporate transparency, and we have been a force for positive social and environmental change through our campaigns around our five core Values: Support Community Fair Trade, Defend Human Rights, Against Animal Testing, Activate Self-Esteem, and Protect Our Planet” (Body Shop 2014).
Retail sales for 2015 were 1559.6 million euros. The Body Shop is owned by L'Oréal and has more than 3000 stores in more thatn 60 countries.Footnote 11
The company describes its cooperation strategy: “Each of our relationships is unique, providing different benefits for the communities, such as a more stable future, or access to basic essentials like education, clean water and healthcare.” The Body Shop Foundation engages in projects related to animal protection, environmental protection and human rights. “Campaigning has been part of The Body Shop from the very beginning. The first was Save the Whale, launched with Greenpeace in 1986, followed by Stop the Burning, which collected almost a million signatures to call for action to save the Brazilian rainforest.”
In this paper the focus will be on The Body Shop’s cooperation with the NGO ECPAT International and its Stop the Sex Trafficking of Children and Young People campaign.
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Is the cause chosen in line with the corporate goals?
Given that one of The Body Shop’s five core values is to defend human rights, stopping sex trafficking of children is in line with its corporate goal.
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Is the company’s choice of NGO partner in line with the cause selected?
End Child Prostitution, Child Pornography and Trafficking of Children for Sexual Purposes (ECPAT) is an NGO with more than 80 local groups in over 70 countries. The NGO partner is in line with the cause selected.
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Has the company set a concrete goal for its collaboration initiative?
(Search: Body Shop ECPAT partnership goal) A report on ECPAT’s website, “Creating change through partnership 2012—ECPAT International and The Body Shop,” includes three concrete formulated goals, but not concrete numbers, such as achievements in preventions, legislation and law enforcement..Footnote 12 This report, however, was created to evaluate the partnership.
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To what extent has the company put all its assets to work, especially employees?
Given that one of The Body Shop’s main strategies in NGO cooperation is campaigning for positive change, employees are automatically involved. The partnership, linked to the company’s Soft Hands Kind Heart Hand Cream, is based on campaigning and marches, and employees have had a key role. For example, through a petition for the cause, more than 7 million signatures were collected around the world. In another example, Marianne, a Body Shop employee in Denmark, organized a successful march supporting the campaign. More than 1500 people turned up, which created huge media interest.
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How does the company communicate its NGO cooperation?
The Body Shop describes its communication channels in reports and on its website. Through campaigns and marches, the company makes engagement visible.
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Is the effect of the project evaluated?
(Search: Body Shop ECPAT partnership result) Concrete numbers about the effect of the partnership are presented on The Body Shop’s blog: “The law has changed in 20 countries to help protect and support children and young people”; “65 countries supported the campaign”; etc.Footnote 13 On the ECPAT website, a report measures progress against the organization’s three campaign goals from 2009 to 2012, when the campaign ended. The before-and-after figures are presented in illustrative graphs, and in sentences such as, “The data revealed that policies and programs on prevention, legal framework and assistance designed and implemented by the 42 countries analyzed have generally increased since 2009” .Footnote 14
Discussion and conclusions
This study has illustrated how traditional sponsorship and charity can develop into NGO collaborations, becoming a key element in company CSR. It develops Cone et al.’s guiding principles to include goal-setting and evaluation. The revised model is tested by exploring cooperation by IKEA, Walmart and The Body Shop with their respective NGOs. The article demonstrates how NGO cooperation can have different structures and render different results. Still, the revised model can be useful as a guiding tool.
The cases illustrates how NGO partnership and cooperation represent advanced forms of sponsorship. It contributes to general branding, one of the key elements of traditional sponsoring, while also contributing to brand-building as a responsible company (CSR). This study documents how such a win-win approach can be developed and evaluated.
This paper shows that Cone, Feldman and DaSilva’s four guiding principles to develop a cause-branding relationship can also be used to evaluate an existing company-NGO partnership. While traditional sponsorships are evaluated based on financial results, business-NGO relationships include the social impact of a company’s support. Compared with traditional sponsoring, cooperating with an NGO can have a much larger impact on both the company and society. Through business-NGO cooperation, companies can reduce risk, increase innovation, and engage employees and other stakeholders, which contributes to improved branding.
Companies generally are not familiar with NGO cooperation. Traditional sponsorship is simple and does not require much engagement from companies beyond financial contributions. Extending a traditional sponsorship to an NGO cooperation related to CSR issues is more demanding, but can have greater impact. Applying the model tested in this paper might facilitate and inspire more companies to cooperate with NGOs.
Given that companies are to a much larger degree expected to report on CSR engagement today than when the Cone et al. guiding principles were developed in 2003, the model also needs to be developed. As CSR becomes part of doing business, it is necessary to evaluate companies’ engagement in the field as a business operation. The earlier choice of an NGO for charity and collaboration was to a large extent based on the management team’s personal preferences (Galaskiewicz and Colman 2006). Now, however, companies need a more business-related decision process for choosing partners (Lion et al. 2013, Austin and Seitanidi 2012). Along with the business approach to NGO collaboration and CSR, it is natural to set goals and evaluate results. These elements are added to the original Cone model.
The three companies evaluated are leaders in the world and have teams to develop and implement NGO cooperation professionally. Based on the revised Cone model, these three companies are evaluating their NGO collaboration, mainly based on the number of people reached or engaged. Still, few have put forward concrete goals, or compared to what extent they have reached goals. It might well be that all three companies set goals initially, but those were only used internally—as were comparisons between original goals and actual achievements.
Companies and organizations engage in environmental and societal activities with the intention to do something “good.” The actual effect of these initiatives, however, is rarely measured from a financial point of view. Because impact investment is growing rapidly (Eurosif 2016), companies might need to take the next step of evaluating the impact of NGO interaction. This is also a good approach for evaluating different NGO partners and activities.
The goals of effect evaluation are based not only on economics, but also on learning. This evaluation can be done simply or in a more complex way. By setting concrete goals and evaluating the results, companies can learn more about their way of collaborating and how to improve it—both for the companies and the NGOs.
Further studies should evaluate other business-NGO partnerships and examine more closely what the different stakeholders in companies and NGOs have accomplished through their relationships. This study suggests an extended model to evaluate effect of business—NGO interaction. What worked well and what can be improved are interesting issues to investigate. Furthermore, the model in this paper was used to evaluate activities which had already taken place, i.e. in retrospect. New studies might use the model both as guidance for developing new NGO collaboration and as an evaluation tool for the collaboration subsequently.