A Timely Suggestion for NGOs Trying to Save the Planet
Build More Capacity to Guide the Private Sector
Free Advice
I remember back when I ran a big NGO. We got so much unsolicited advice. Much more than we wanted, needed or asked for. I don’t want to be snarky about this. Most of our self-appointed advisors were well-intentioned and very good people. Many were also generous supporters. And they were all trying to help.
But most of their advice was just not very good:
There are too many NGOs. Why don’t you merge?
NGOs spend too much money on overhead. Stop bothering us with fundraising pitches and all of this marketing stuff.
Your teams are too big. Spend more on programs. Be more productive.
NGOs should collaborate with one another on everything.
And so on.
After this experience, I vowed not to do the same. I promised I'd only speak up when I truly believed I had a very important point to make, rooted in observation and analysis. I think this is one of those times.
In our last issue, I praised NGOs for the great job they have done pushing the private sector to prioritize environmental problem-solving. And I urged private sector leaders to do more with the environmental community.
My Recommendation to NGOs
To make sure this private sector environmental momentum continues, please do this:
Please build more capacity for private sector engagement.
I offer this advice respectfully and humbly. I know this is not nearly as easy as it sounds. I know there are competing interests. I know it requires funding that you might not have. I know all of these things, and yet I am also concerned that if you do not move forward in this area, you are in danger of losing your seat at the table. And we really need you at the table.
The Danger
NGOs have driven much—maybe most—of the important business engagement we now see on the environmental problem front. I hugely admire this. We all should. NGOs are making a very big and positive difference. More companies and investment funds than ever before are actively trying to figure out and execute their environmental strategies.
One result of this achievement is increased demand for advice and guidance. Companies and investors are pursuing more strategies and more ambitious ones at that.
Competition for NGOs is rising in two ways:
Business people are becoming savvier about environmental matters and coming up with sophisticated strategies on their own.
Private sector consultants—think McKinsey, BCG, et al—are growing their capabilities in these areas rapidly.
When new players enter an arena, it changes the game. It's mostly good. These new entrants are raising the bar. But it makes adding value for the incumbents a little more challenging.
NGOs, if you don’t build your capacity, you risk being less able to keep up with demand for new partnerships, projects, and opportunities. Companies may go it alone or just work with consultants. You risk being left behind.
This would be a bad outcome. Private sector players are doing a lot, which is great. But they still need the help of NGOs. Otherwise, business types will always be somewhat blinded by past practices and traditional P&L concerns. To reach our environmental goals, we need NGOs pushing, pressuring, cajoling, advising, guiding, and criticizing the business community every step of the way.
Think about any private sector environmental initiative that you admire. Most of them benefit from NGO guidance.
I saw this firsthand at Goldman Sachs back in 2005 when I was leading the firm's initial environmental foray. We received a lot of attention and praise at the time for these efforts. But a lot of the credit could have been shared with NGOs.
Campaigning NGOs like the Rainforest Action Network and Friends of the Earth played a major role. They provided us very specific suggestions and generally good advice, even if we didn't always fully agree. They also threatened to campaign against us—which we really didn't want— unless we announced and implemented ambitious plans. That kept the pressure on.
More centrist NGOs like the Wildlife Conservation Society, EDF, Resources for the Future, and the World Resources Institute gave us real-time feedback, advice, and specific suggestions that allowed us to execute more boldly.
The various NGOs we engaged with knew things that we would never know. They skillfully pushed us out of our comfort zone. We learned a lot from them and built a better and more ambitious environmental program as a result.
What to Do
In order to keep leading the charge, NGOs should invest more in building the professional capacity to lead the private sector. The needs are quantitative—adding more people who can do this work. But they are also qualitative—investing in more and different kinds of training; hiring senior talent with new skills; hiring young people with fresh ideas.
The timing is great. More people than ever before and with various backgrounds and levels of experience are eager to join NGOs and work on these priorities. I hear from these people every day. Many have extensive experience as business people, political activists, communicators, and technologists. Let's add them to the NGO team now.
The Assist
One challenge NGOs constantly face: donor restrictions. There is a tendency for nonprofit capital providers to prioritize projects over people and inadvertently encourage NGOs to be as lean as possible. Donors resist anything that sounds like overhead. But these donors are mistaken in my view. NGOs need human capital to conceptualize, plan, and implement those projects to make them successful.
Attention philanthropists and foundation professionals who care about this opportunity: Please provide NGOs the capital they will need for this important work. I've made this point before. Let’s make the case even louder and stronger.
Attention private sector players: You’re benefiting from the work of NGOs. You should recognize that you are drawing on their past investments and do the right thing by generously supporting them.
Attention all Instigators: What do you think NGOs should be doing to build more ambitious and bold corporate engagement in the private sector? As we all know, the stakes are very high and timeframes are very narrow. What else should we all be doing to accelerate progress right now?
The Index
Good take here on what makes NGO-business partnerships work—the case of Swiss Re and Oxfam. And another good analysis here—this one from Andy Last’s book, Business on a Mission.
Let's not be naive about getting private sector engagement on environmental issues to really work. It's difficult. Here’s a contrary point of view on ESG investing by Blackrock’s former leader in the area Tariq Fancy. I’m more optimistic, but it's good to listen to skeptics. And I fully agree that we need much stronger regulatory policy.
The Instigator has said a lot about carbon removal, from nature-based solutions and the role of the private sector in driving this market forward. Bravo to Shopify for leading the way. Radical transparency in action: “How to Kick Start the Carbon Removal Market: Shopify’s Playbook.”
One Last Thing
In response to our recent (and widely discussed—all of our readers have strong strong opinions) Best Books on the Environment issue, many Instigators told me that I should read Kim Stanley Robinson’s latest novel, The Ministry for the Future. Thank you. I just finished reading the book. It's great—one of the best I’ve read on the climate crisis. Check out this interview with the author by environmental journalist Jeff Goodell. And please read the book and let me know what you think. What else should we be reading?
Onward,
