Cooperation between business and non-governmental organizations to promote sustainable development

Abstract

Abstract International environmental policy has long recognized the role of both the civil and business sectors in the implementation of sustainable development, as reflected by the Earth Summit in 1992 (United Nations Conference on Environment and Development, Rio de Janeiro) and the resulting publication of the Agenda 21 action plan. The importance of civil organizations is also stressed by the European Union's environmental policy, as indicated by, for instance, the Sixth Environmental Action Plan, which was accepted in 2002. Nevertheless, the common understanding of how non-governmental organizations may influence corporate environmental behavior, especially that of small and medium-sized enterprises, remains limited. This paper presents the results of research examining the relationships between non-governmental organizations and businesses based on the stakeholder theory of the firm. The results show that small and medium-sized enterprises rank the importance of different stakeholders similarly to larger businesses and often engage in cooperation with non-governmental organizations. It is also demonstrated that cooperative strategies constitute an important and effective component of non-governmental organizations' behavior toward businesses and that the indirect influence of the civil sector is as important as its direct impact. The results contribute to the development of the stakeholder theory of the firm and help inform practical decision makers about how to improve relationships between business and non-governmental organizations.