Spar advantage for NGOs. The creation of those

Spar and La Mure (2003) argue that: “essentially,
NGOs use consumer and public pressure to damage the firm” (p.81). In order to
do that, they raise awareness of consumers by organizing protests, advertisings
and relaying the issue on social media (Burchell and Cook, 2006). This is done
to damage the brand (Hamman and Acutt, 2003) and encourage consumers to boycott
products 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 an
environmental activist by the Nigerian government after his protest against
Shell’s oil spills in Ogoniland (Smith, 2003). The firm was strongly criticized
by NGOs and the media for letting the
execution 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 ethical
responsibilities in order to avoid this kind of accident (Smith, 2008). This
potential impact on sales and brand image is feared by firms,
which creates a strong incentive to implement change in business sustainability
instead of resisting and risking further damage (Spar and La Mure, 2003).

As seen previously, boycotts and the actions of civil society can indirectly affect
shareholders, 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 on
stocks and therefore on shareholders’ wealth
(Davidson, Worrell and El-Jelly, 1995). According to Martin (2002), shareholders
are often reluctant to accept any change
that doesn’t profit them but that does not mean
that social responsibility is not in their
interest. The fact that civil society’s campaigning can create an incentive for
them to accept this change is a great advantage for NGOs. The creation of those
incentives gives credibility to civil society’s actions even if the outcome is
not necessarily positive.

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Some firms prefer to engage in a
dialogue in order to display the constraints to access NGOs’ demands (Burchell
and Cook, 2013). NGOs are able to implement change by themselves with the
support of companies and without the need of governmental policies that are
often considered too slow (Burchell and Cook, 2013). In 2006, a Dutch bank
named Rabobank got in contact with WNF (WWF for Netherlands) as the NGO wanted
to create climate friendly credit-cards. The margin made on every card would be
used to reduce carbon emissions. This allowed Rabobank to increase its customer
base while being a more sustainable business with a better reputation due to their
partnership with WNF. The initial reason pushing
Rabobank 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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