The influence of NGO‐corporate relationship on environmental disclosure: Evidence from the fashion industry

Abstract

AbstractMost NGO‐corporate relationships have been founded on conflict. However, this pattern has started to change with the emergence of more collaborative (dialog‐based) approaches. Academic inquiry into how NGOs influence corporate policies related to sustainable development is a novel field of investigation. This article aims to identify the potential role of conflictual versus collaborative relationships between NGOs and companies in influencing the quality of the environmental disclosure (ED). We also investigate how NGOs may unintentionally lead companies to adopt greenwashing practices. In this article, we derive five propositions by studying the relationships between Greenpeace and 24 firms operating in the fashion industry through a qualitative longitudinal analysis. We gathered data through three semi‐structured interviews with the Greenpeace Global Corporate Leader of the Detox Campaign and content analysis of corporate communication documents. Our findings suggest that company behavior toward ED and the odds of greenwashing practices are affected by type of relationship established with NGOs. Specifically, if the NGO‐corporate relationship is conflictual, companies tend to achieve higher ED quality in the short and intermediate terms. Vice versa, more collaborative (dialog‐based) relationships result in initially low ED quality. However, in the long run, under both types of relationship the quality of ED settles at a medium level. Moreover, NGOs' communication, activism intensity, and pressure constitute powerful means of persuasion and contribute to increasing a campaign engagement rate. However, too much pressure may create a fertile ground for greenwashing, and so may an everlasting conflictual relationship between NGO and companies.