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Editor’sNote: John Elkington’s new book, Cannibals with Forks: The Triple Bottom Line of 21st-
Century Business, has been hailed as “practical,compassionate and deeply informed, a brilliant
synthesis of his genius for cutting through the thicket of tough issues-in the world of business
and sustainability-and producing elegant solutions that can be applied today”(Paul Hawken).
We are pleased to have the opportunity to publish a selection from this award-winning book. In
this discussion of partnerships, Elkington explores how effective, long-term partnerships will be
crucialfor companies making the transition to sustainability and offers approaches and examples
of keen interest. Special thanks to Capstone Publishers, U.K.,for their gracious cooperation.
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Sustainability can be a 2 + 2 = 5 (or even pany, may seem common sense, but old
50) game. To achieve outstanding triple perceptions and prejudices die hard. Po-
bottom line performance, new types of eco- tential partners continue to feel profoundly
nomic, social, and environmental partner- misunderstood by those they should be
ship are needed. Long-standing enemies seeking to influence and engage. “I just
must shift from mutual subversion to new wish I could give people a pill so that they
forms of symbiosis. The resulting partner- could see the world the way we see it,” the
ships will help each partner perform tradi- chief environmental officer of a major cor-
tional tasks more efficiently, while provid- poration once confided. “Forget it!” I re-
ing a platform from which to reach towards plied. But the comment was an interesting
goals that none of the partners could hope window into at least one corporate soul.
to achieve on their own. Many business people-and many
Effective, long-term partnerships will campaigners-still see the clash between
be crucial during the sustain ability tran- companies and campaigners in terms of an
sition. Some will be between the public unending battle between the forces of good
and private sectors, some between compa- and evil, of light and darkness. Right and
nies, and some between companies and wrong, however, depend on where you are
groups campaigning for a broad range of standing and which way you are facing.
triple bottom line objectives. The focus in Consider the views of Jim-Bob Moffett, the
this article will largely be on environmen- larger-than-life American chairman of
tal partnerships, but we are also seeing the Freeport McMoRan-the company which
evolution of similar partnership ap- runs one of the world’s largest copper and
proaches in such areas as Third World de- gold mines in the mountains of Irian Jaya.’
velopment and human rights. Freeport McMoRan and RTZ, which
The idea of trying to develop partner- owns a stake in the mine, found them-
ships, both inside and outside the com- selves plunged into the X-ray environment
CCC 1088-1913/98/0801037-15
0 1998 John Wiley & Sons, Inc. ENVIRONMENTALQUALITYMANAGEMENT / Autumn 1998 / 37
I Revolution Focus Old paradigm ) New paradigm
when a group of hostages were seized by of corporations being what it is, the 21st
members of the Free Papua Movement century will also produce abundant ex-
(OPM), as part of its independence amples of the corporate monkey trap in
struggle. The OPM see the mine, operated action. Some companies will escape
virtually as an extra-territorial part of empty-handed, some will work out ways of
America with the protection of the Indone- breaking the jar out of the earth, but more
sian military, as a symbol of the problems than a few will also be hammered senseless
they face. Worse, the local tribespeople- by their opponents.
in addition to having been driven off their
lands-complain that run-off from the WHY WORRY?: TOMORROWS CEOS ARE
mine is polluting rivers and that the re- GREEN
moval of forest cover is affecting the local Another reason for business to worry
climate. Paradoxically, the hostages in- is that the environmental agenda is way up
cluded students from Cambridge Univer- the list of priorities ofthe emerging genera-
sity who had been working with local tions of university graduates. “Europe’s
tribes to learn how they exploited nature graduates put care for the environment top
without destroying it. of their agendas,” according to The Euro-
The Freeport McMoRan response to p e a n Graduate Survey, which covered
environmental challenges can only be de- 16,000 final-year students in 56 universi-
scribed as robust. The scale of the pollu- ties, business, and engineering schools
tion, Jim-Bob Moffett retorted, “is equiva- across 14 countries3But, while 68 percent
lent to me pissing in the Arafura Sea.” He said they were prepared to pay the price of
told The Times that he was involved in “a a better environment, only 38 percent
new Cold War” with local and interna thought that the global picture would im-
tional campaigners. “This,” he said, “is not prove. These young people are also switch-
a job for us, it’s a religion.” All of which ing on to the Internet in a big way: 61 per-
tends to make negotiation with the enemy, cent used it in this latest survey, compared
let alone the development of longer term with just 37 percent ii year earlier.
partnerships, inconceivable. For these, and many other, reasons, it
is clear that we now stand on the thresh-
MONKEY TRAPS old of a new era in the relationships be-
Such reactions bring to mind the old tween business and its many stakeholders,
“Monkey Trap” tale (Exhibit 1).Companies including potential new recruits. We also
like Freeport McMoRan would do well to see, in the words of a recent book on green
learn and understand it. The history of the activism in America, environmentalism at
environmental revolution is full of ex- the cros~roads.~ Faced with growing media
amples of companies locking themselves skepticism and a degree of political back-
into various forms of monkey trap. In the lash, environmentalists have been rethink-
case of Freeport McMoRan and RTZ, their ing what they do and how they do it.
corporate fists are locked in the earth by For business, the value of the multiple
the thought of the billion tonnes of copper perspectives introduced by stakeholder
and gold ore to be won as giant mechani- dialogue processes has been demonstrated
cal shovels chew away at the mountain time and again for companies. The priori-
tops. And the nature of human beings and ties and strategies emerging from such pro-
A monkey comes into a village at night. He finds a hole in the ground and circles it warily, smelling food. His paw just
I barely fits into the opening, because the hole is actually a narrow-mouthed jug buried flush with the ground. He
manages to scoop up a handful of rice, but can‘t run off with the food-since his closed fist can’t be drawn back I
,
through the jar’s opening. Not wanting to lose the food, he screeches, but keeps his fist closed. Shortly, a villager
comes by with a rock or pole and kills the monkey, either as a pest or for food. * !
.. .
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Partnerships from Cannibals with Forks: The Triple Bottom fine of2lst-Century Business ENVIRONMENTALQUALITY MANAGEMENT / Autumn 1998 / 39
sponsorship departments dedicated solely Greenfreeze and After
to hunting down deep-pocketed corporate Now we are entering a new phase in
donors. And, like the monkey with its fist the evolution of business-NGO relations,
in the trap, they too then tended to find involving early strategic alliances between
that they were in no position to run effec- companies and selected NGOs. In the pro-
tive campaigns against their newfound cess, some NGOs are learning to punch
funding partners. Some companies even with the weight of multinational corpora-
offered funding with the explicit aim of tions, in part by learning to work alongside
locking up potential enemies, or even of and through corporations. An early ex-
using them as Trojan horses. ample was the string of “strange alliances”
In any event, the conditions in which that Greenpeace pioneered in its “Green-
such partnerships were pursued changed freeze” campaign with companies like
dramatically when two things happened in DKK Scharfenstein and Calor.
parallel. First, companies, inevitably, be- The aim was to use Greenpeace’s mar-
came more discriminating. They began to keting and communication muscle to help
insist on a bigger PR bang for their spon- launch ozone-friendly technology, which
sorship buck. And they wanted their ben- the prevailing refrigeration industry consen-
efits in the form of an enhanced reputation sus said was unworkable. The result was
with selected audiences. As “cause-related that the plans of the Inultibillion-dollar re-
marketing” evolved, some of those NGO frigeration and chemical industries were
corporate sponsorship departments be- thrown into complete disarray.‘j What hap-
came almost indistinguishable from main- pens if and when Greenpeace starts to work
stream advertising or PR agencies. with the real heavyweights?
The second shift was driven by NGO In the world of business, environmen-
needs. They found themselves managing tal performance is increasingly seen as a
increasingly large projects and budgets. competitive and strategic issue for compa-
Their staffs mushroomed and demanded nies. As a result, growing numbers are ex-
better employment conditions. They found perimenting with novel forms of NGO rela-
they needed people, and project and finan- tionship. In the world of NGOs, meanwhile,
cial management skills which, they noted, the mid-1990s marked a critical crossroads,
business was also rich in. So we saw with the environmental agenda opening out
downsizing corrtpanies seconding manag- into a much broader, and more demanding,
ers to NGOs, often as a way of easing them sustainable development agenda. As a re-
into retirement. And we also saw NGOs sult, more environmental NGOs are experi-
appointing people from business to their menting with partnership approaches to
boards and top management posts. environmental and sustainability problems.
One pioneer has
In a parallel trend, we saw leading One pioneer has been the U.S. Envi-
been the U.S.
campaigners being recruited by major com- ronmental Defense Fund (EDF),which has
Environmental
panies. Not all of these transfers worked. worked with companies as diverse as
Defense Fund (EDF),
More than a few secondees, and some of McDonald’s and General Motors. Recently,
which has worked
those actively headhunted, proved to be it formed the Alliance for Environmental
with companies as
fish out of water. But enough of these grafts Innovation with the Pew Foundation-
diverse as
“took” to ensure that NGOs remain inter- and set u p a joint task force with S.C.
McDonalds and
ested in finding new ways to access the Johnson & Son, Inc., to work on the clean-
General Motors.
human resources and skills available ing products company’s product formula-
within their business partners-and that tion and packaging processes. “People
companies find ways to extract new forms have always expected products to be effec-
of value from campaigning organizations tive, while also being safe to use and dis-
or from ex-campaigners. pose [of],’’ explained Joseph Mallof, an SCJ
Partnerships from Cannibals with Forks: The Triple Bottom fine of 2lst-Century Business ENVIRONMENTALQUAUTYMANAGEMENT / Autumn 1998 / 41
Exhibit 2. Unilever, U.K./The Netherlands: Sustainable Fish Fingers
I As the world‘s largest fish buyer, the Anglo-Dutch giant Unilever is backing a plan developed by W W F to set up an
international labeling scheme for sustainable fish production. Unilever is the company behind such brands as Bird’s
I Eye and John West. When the scheme was announced in 1996, the plan was thatthe first labeled products would be
in the stores by 1998, with all of the company‘s fish products labelled by 2005.
The new standards, which will be policed by a new Marine Stewardship Council (MSC), will iocus on two main issues:
where the fish are caught and the methods used to catch them. Participating fisheries will be certified againstthe
MSC criteria and their packs will bearthe MSC logo. The project has been modeled on the Forest Stewardship Council
I (FSC), a similar program WWF set up in l993for the timber trade9 I
But what is perhaps most interesting about the scheme is that it reflects disillusion on the part of both WWF and
Unilever with government efforts to set and enforce catch quotas to control over-fishing. This is the first real attempt
I to offer a market-based approach. It remains to be seen, however, both whether the supermarkets and specialist fish ~
I stores will back the scheme, and whether consumers will switch in significant numbers to sustainable kippers and
fish fingers.
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nondiscriminutors. For them, a company’s corporations and NGOs will demand ex-
relative environmental performance is not traordinary vision and new political and
of particular interest. Rather, the focus of management skills from people who in
attention is typically the environmental the past have found it much easier to
burden of the industry in general. simply lob bricks at one another. They
With these two dimensions in mind, are now being asked to build together. If
we use a four-celled matrix of NGO types the approach works, they will need to
(Exhibit 3) showing “Sharks,” “Orcas,” accept shared responsibility for both the
“Sea Lions,” and “Dolphins.” Most sane ends and the means. If they fail, as many
people and organizations tend to avoid experiments do, we need to recognize
sharks, although there are plenty of them that even some failures should be cel-
about in most industries. The infosphere, ebrated if, in the process, we learn from
in particular, is full of them: the media our mistakes.
I
I Discriminator Orca (killer whale) Dolphin
highly intelligent, strategic intelligent, creative, integrators
can adapt behavior, strategy to context adapts behavior and strategies to context
fearsome, uses fear to coerce can fend off sharks
uncertain in behavior equally comfortable in deep or shallow waters
likes deep water, can cover great distances
associates with own kind
eats sea lions (and, sometimes, dolphins)
. can cover great distances
can be a loner - or intensely social
empathy for other species
Source: SustainAbility
Partnerships from Cannibals with Forks: The 7@/e Boftom Line of2lsf-Century Business ENVIRONMENTAL QUAUTY MANAGEMENT / Autumn 1998 / 43
Exhibit 4. Drivers of “Strange Alliances“
-_- ~ - ~ _ _ _ _ _ - __ _- _____ ~~~-
Source: SustainAbility
Partnerships from Cannibals with forks. The Trple Bottom Line ofZlst-Century Business ENVIRONMENTALQUALITYMANAGEMENT / Autumn 1998 / 45
Attention needs to be paid to different that the Cold War is considered to be over,
types of rationality and irrationality. In Trust concludes that the most important
any game, different players can be per- issue facing Europe, the United States and
fectly rational but, seeing the value other industrial democracies is economic
added, rules, and boundaries in differ- competitiveness. And here Fukuyama of-
ent ways, end up playing in very dif- fers a chilling conclusion: the tendency of
ferent ways. countries like the United States and Great
Britain towards individualism will under-
In sustainability partnerships, as in all mine their economies. By contrast, he ar-
other walks of life, dismissing actual or gues, the success of the rapidly growing
pot.entia1players as “irrational” closes the economies of East Asia is rooted in often
mind. It makes much more sense to expand overlooked forms of social capital, such as
the mind by trying to work out how others trust, sense of community, and social inte-
see the world, the game, and its rules. “To grat ion.
us,” say Nalebuff and Brandenburger, Fukuyama is hardly alone in making
this case: The Economist pointed out that
the issue of whether people are ratio- “hardly an issue of the Iiarvard Business
nal or irrational is largely beside the Review or the California Management Re-
point. More important is remember- view appears without the word ‘trust’embla-
ing to look at a game from multiple zoned on the cover.” One key reason for this
perspectives-your own and that of is that many current trends in management,
every other player. This simple- among them downsizing, reengineering. and
sounding idea is possibly the most the culling of middle managers, are forcing
profound insight of game theory. companies to place more responsibility on,
and faith in, their front-line employees.
It is also one of the simplest, yet most Now, growing numbers of companies are
effective ingredients in the expanded finding that this internal need for trust is
stakeholder approach to capitalism. mirrored in the external world. Just as they
need to work much more closely with
Trust smaller numbers of trusted suppliers, so
Every now and then you come across they also feel the need to involve a growing
In conventional a book that you can feel changing your range of external stakeholders, including
business terms, trust thinking as you turn each and every page. sustainability campaigners, in setting their
cuts the costs and Francis Fukuyama’s T r ~ s t , ’which
~ I read business priorities.
delays involved in on a flight to South Africa, had this effect In conventional business terms, trust
project development on me. Best known for his 1992 best-seller cuts the costs and delays involved in
and other processes. T h e End of History and the Last Man, project development and other processes.
Fukuyama (formerly deputy secretary of It can help to secure a licence to operate.
the U.S. State Department’s policy plan- But as environmental, and other triple
ning staff, then a Rand Corporation ana- bottom line factors increasingly shape
lyst) subsequently turned his attention to markets, the growth of trust between indi-
an area likely to be central to the sus- vidual companies and their stakeholders
tainable development agenda: trust-and will also help hone competitive edge and
what he describes as “social capital.” provide an important source of new busi-
With capitalism increasingly in the ness ideas. But companies investing in
ascendant around the world, The End of trust will still need to cultivate a degree of
History argued that different countries paranoia (in the sense in which Intel’s
were coming to share increasingly similar Andy Grove uses the word) and schizo-
political and economic institutions. Now phrenia (as discussed above).
Partnerships from Cannibals with Forks: The Triple Bottom Line ofZlst-Century Business ENVIRONMENTALQUALITYMANAGEMENT / Autumn 1998 / 47
BUBBLING UNDER: GOING DUTCH the covenant creates a wider base of
Sustainability partnerships can be initi- support from within industry. If the
ated-and led-by government agencies, government tried to reach the same
Sustainability companies, NGOs, or other stakeholders. goals through legislation, it would be
partnerships can be One government-led partnership approach time-consuming and not necessarily
initiated-and led- which certainly ought to spread is based on very effective. Through voluntary
by government “covenants,” or voluntary environmental agreement it is possible to do difficult
agencies, companies, agreements between business and govern- things that could not easily be laid
NGOs, or other ment. Indeed, although the idea may be dif- down in law.
stakeholders. ficult to export in its entirety, it has attracted
interest from a number of other countries This approach, it hardly needs saying,
including Germany and Italy in Europe and, is not applicable to all problems and all
in the Americas, Argentina and the United circumstances. To work, it not only re-
States.I8Rooted in the Dutch political and quires sectoral bodies with the ability to
business tradition of consensus and consul- negotiate agreements with governments,
tation, the approach also benefits from the but also governments where the funda-
fact that Dutch companies tend to belong to mental policies and targets are not changed
one or more sectoral organizations-making with every new administration. Above all,
it easier to negotiate sector-wide agreements voluntary agreements will always require
with government. the pre-existence of a reasonably compre-
Since the first experiments of the hensive and sophisticated framework of
198Os, more than 75 environmental cov- legislation, to ensure that any “free-riders”
enants have been signed. These have com- are identified and dealt with.
mitted a wide range of sectors to meeting
targets in such areas as energy efficiency, Eco-Infrastructure
greenhouse gas reduction, and the control One emerging recognition is that, how-
of volatile organic compounds. So, for ex- ever much a single company may be able
ample, some 150 companies operating in to do on the eco-efficiency front, in the end
the surface treatment sector signed up to an sustainability will depend on the progress
energy efficiency covenant with the eco- of entire concentrations of industry, com-
nomic affairs ministry which aimed for a plete value chains, and whole economies.
20 percent improvement between 1989 As a result, we see growing interest in the
and 2000. And the approach, despite some provision of eco-infrastructure, as for ex-
NGO criticisms, appears to be making ample in the concept of the eco-industrial
headway. When the chemicals covenant park (EIP). The central idea here is that by
was reviewed, it turned out that 107 out of sharing resources, whether in the form of
125 companies committed to the agree- efficient energy production or of state of-
ment had already installed the manage- the-art waste management, companies can
ment systems needed to monitor progress. significantly boost the overall eco-effi-
The main criticisms have been that the ciency of a local or regional economy.
covenants do not go far enough and, because “We see eco-parks as a community of
they tend to be based on intimate discus- companies working together to improve
sions between government and a particular individual and group performance in all
sector, they are not as democratic as the tra- environmental areas,” explained the 1J.S.
ditional legislative processes. But there are Environmental Protection Agency (EPA):
also real advantages. As KPMG partner
George Molenkamp put it, There is a large menu of options for
doing this, including energy efficiency
From the government’s point of view, in building and process design, inno-
Partnerships from Cannibals with Forks: The Triple Bottom Line of Zlst-Century Business ENVIRONMENTALQUALITY MANAGEMENT / Autumn 1998 / 49
Tibbs, but the field is now wide open for cern; and leverage partnerships, whose aim
its own version of such entrepreneurs as is to find win-win (or win-win-win) oppor-
Steve Jobs or Richard Branson to get it on tunities that will allow each party to make
the road commercially. modest investments in return for relatively
high gains.21The rules of the game will
WINNERS, LOSERS: ARE you IN OR OUT? clearly vary depending on the style of part-
Winners, whether they are companies nership adopted.
or national or regional economies, will Most companies developing advanced
learn how to earn the loyalty of their key eco-efficiency and sustainability manage-
stakeholders (Exhibit 5). Success in these ment tools recognize that they need a mul-
areas will help considerably with such tiplicity of inputs to the relevant processes
challenges as building employee morale if they are to provide robust sugges tions for
and generating new business ideas. Com- future product development and marketing.
panies with active, extended webs of part- But they also need to recognize that adopt-
ners will be much better prepared for ing the right tools and developing the rel-
emerging trends, their antennae scanning evant management systems are only part of
horizons well beyond the reach of many of the challenge. If they need to build public
their competitors. credibility and stakeholder engagement,and
Note that the rules of partnership will most companies do, they need to build
change as the partnerships evolve. The wider partnerships-so that their stakehold-
Management Institute for Environment ers share a sense of ownership in the ap-
and Business (MEB)has reviewed the evo- proaches adopted. Given that different part-
lution of environmental partnerships in ners will bring different rationalities to the
the United States, and defines four differ- table, however, learning how to sustain
ent types of partnership. These are: pre- these partnerships will be a tough challenge.
emptive or resolution partnerships, which One outside possibility is that the unions-
are designed to defuse an already or poten- increasingly marginalized during much of
tially hostile situation; coalescing partner- the 1980s and 1990s+:ould find a new role
ships, in which rivals join forces to accom- as far-sighted brokers in relation to triple
plish their goals; exploration partner- bottom line resources and performance.
ships, based on opportunistic attempts to The losers, often, will be those left out
research or investigate issues of joint con- of the really significant sustainability part-
Suppliers usually do best when they maximize their sales to customers. Often, however, the result is that both the
customer and the environment turn out to be losers. Now the telecommunications company Nortel is testing the
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"shared savings" approach to chemicals use reduction in Canada and waste minimization in Britain?* The company,
which is active in some 90 countries, employs more than 60,000 people, and had a turnover of $10.7 billion in 1995,
launched a Product Life Cycle Management program in 1992 designed to root out inefficiencies.
Partnerships with suppliers are seen to be fundamental to both commercial and environmental success. Nortel's
shared savings approach focuses on the relationship between supplier and customer. This is structured so as to
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provide both with financial incentives to improve their environmental performance, for example by curbing resource
consumption and waste generation. The new approach is badly needed: recent trends in Nortel's resource efficiency
I
had been moving in the wrong direction.
In 1993, the company disposed of 8,851 tons of solid waste to landfill in the British Isles. Its target has been to cut
this figure by 50 percent by 2000, but by 1996 landfill disposals had jumped by 80 percent to 15,892 tonnes. Part of the
problem had been better reporting, but the pressure is now on to cut waste arisings dramatically. Interestingly,
however, the company found it hard to find suppliers able to meet its new needs. The waste industry proved to have
little experience of shared savings contracts, but as growing numbers of customer companies move in this direction,
suppliers and contractors will have no option but to work out new ways of partnering with customers to boost
efficiency-both in cost and environmental terms.
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John Elkington is chairman of strategy consultants SustainAbility and the author of global bestsellers The Green
Consumer Guide and The Green Capitalists.
Partnerships from Cannibals with Forks. The Fiiple Bottom line ofZlst-Century Business ENVIRONMENTALQUALITY MANAGEMENT / Autumn 1998 / 51