Spar and La Mure (2003) argue that: “essentially,NGOs use consumer and public pressure to damage the firm” (p.81). In order todo that, they raise awareness of consumers by organizing protests, advertisingsand relaying the issue on social media (Burchell and Cook, 2006).
This is doneto damage the brand (Hamman and Acutt, 2003) and encourage consumers to boycottproducts or to write to the company about the issue (Spar and La Mure, 2003)forcing the management to at least consider it. For example, in 1995, Shell was unable to prevent the execution of anenvironmental activist by the Nigerian government after his protest againstShell’s oil spills in Ogoniland (Smith, 2003). The firm was strongly criticizedby NGOs and the media for letting theexecution happen and a boycott was launched which had a strong impact on sales,decreasing them by 50% in some areas. Shell had to apologise to the public and to adopt new ethicalresponsibilities in order to avoid this kind of accident (Smith, 2008). Thispotential impact on sales and brand image is feared by firms,which creates a strong incentive to implement change in business sustainabilityinstead of resisting and risking further damage (Spar and La Mure, 2003).
As seen previously, boycotts and the actions of civil society can indirectly affectshareholders, as a firm will perform worse if it is targeted by those actions,but shareholders can also be impacted directly. Indeed, evidence shows that a boycott has a negative impact onstocks and therefore on shareholders’ wealth(Davidson, Worrell and El-Jelly, 1995). According to Martin (2002), shareholdersare often reluctant to accept any changethat doesn’t profit them but that does not meanthat social responsibility is not in theirinterest. The fact that civil society’s campaigning can create an incentive forthem to accept this change is a great advantage for NGOs. The creation of thoseincentives gives credibility to civil society’s actions even if the outcome isnot necessarily positive. Some firms prefer to engage in adialogue in order to display the constraints to access NGOs’ demands (Burchelland Cook, 2013).
NGOs are able to implement change by themselves with thesupport of companies and without the need of governmental policies that areoften considered too slow (Burchell and Cook, 2013). In 2006, a Dutch banknamed Rabobank got in contact with WNF (WWF for Netherlands) as the NGO wantedto create climate friendly credit-cards. The margin made on every card would beused to reduce carbon emissions. This allowed Rabobank to increase its customerbase while being a more sustainable business with a better reputation due to theirpartnership with WNF. The initial reason pushingRabobank to adopt those cards being that they wanted to touch an environmentally-friendly customer base (Van Huijstee and Glasbergen,2010), and appearing as an ethical brand was the best way of doing so.
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