By Bill Shireman, President and CEO, and Rebecca Foges, Senior Manager, Stakeholder Engagement – The Future 500
As the largest concentrated buyer of products and services on the planet, the retail sector has more impact than almost any other institution. The sector’s leaders want to be responsible corporate citizens. RILA member companies have had positive, even transformative, impacts on responsible forestry, agriculture, mining, energy development, animal treatment, fisheries protection, and in other areas.
Yet nonprofits and retailers often find themselves at odds, leading to unreasonable demands, expensive regulation, and intractable conflicts that can last for years.
One of the most effective ways to avoid conflict and advance sustainability is by engaging stakeholders on supply chains issues. Driving environmental or social improvements through supply chains often leads to much faster and more significant outcomes on the ground compared to legislation and regulation. Such industry action harnesses the free market to benefit environmental and social sustainability, usuallyat lower cost than regulatory prescription.
In the 17 years we have been brokering agreements between major retailers and nonprofits, most of the conflicts Future 500 has resolved could have been avoided entirely, if the parties had engaged beforehand. Years could have been saved, brands protected, and effective solutions advanced.
For example, it took five years of battles between Rainforest Action Network and Mitsubishi, before we were able to bring the parties together. But once their agreement was signed, the procurement preferences adopted triggered changes in 400 companies including Home Depot and Lowe’s, and subsequently helped shift the entire North American forestry market to more sustainable practices.
To avoid conflict and smooth the path to sustainable practices, it may be time for a retail industry stakeholder alliance to enable RILA members to engage proactively with selected nonprofits, and harness their ability to drive gradual change across the supply chain. By being proactive, retailers can improve their relationships with nonprofits, and even with more activist corporate campaigners, who are less inclined to target companies they believe are genuinely committed to continuous improvement.
Through discussion and dialogue, the sector can avoid potentially costly conflict, and help promote understanding and shape collaboration between advocates and the sector.In addition, if nonprofits see that retailers are genuinely pushing for sustainability improvements throughout their supply chains, they are less likely to lobby for government regulations that force the sector to act.
Bill Shireman and Rebecca Foges are with Future 500, a non-profit that serves as a bridge between major companies and nonprofits. Future 500 brings together corporate and nonprofit stakeholders, to drive cost-effective solutions to problems of climate and energy, water and agriculture, product stewardship, human rights and transparency.