Sustainability Chapter 10 Alliances and Partnerships PDF

Alliances & Partnerships Business is a series of alliances, partnerships, and competitors Just as no man is an island, the same holds true for any company: our stakeholders determine our success or failure. The same holds true for our sustainability goals. Solo efforts for sustainable business prac...

Alliances & Partnerships Business is a series of alliances, partnerships, and competitors Just as no man is an island, the same holds true for any company: our stakeholders determine our success or failure. The same holds true for our sustainability goals. Solo efforts for sustainable business practices are admirable, but the greatest impacts are made when organizations work together. The stories behind the partnerships our In this chapter, we’ll cover: businesses form are as diverse as the companies Types of partnerships themselves. We will explore the meaning behind Determining the value-added The these relationships, making the right moves to partnership cycle Red flags and green flags for form the most advantageous connections, partnerships maintaining the most valuable ones, and pruning Mini-case studies the ones that are not. What do we mean by “Partnership”? The terms ‘partnership,’ alliance,’ or ‘collaboration’ can mean many things. In this context, we’re referring to a voluntary agreement between two or more public actors—such as corporations, government entities, or NGOs—toward a common objective. Here, the goal is to have a measurable impact on one of the main ESG metrics. SDG #17: Bridging Development Gaps The saying “a rising tide raises all ships” rings true for SDG Goal #17. Arguably the most important of all the SDGs. How else will we achieve our sustainability goals without working together? Without collaboration, and commitment to one another, we’ll come up short on our most important goals. Effective partnerships transcend political and economic differences, uniting diverse stakeholders toward common objectives. Whether the partnerships are between for-profit entities, NGOs, governmental bodies, or academia, more organizations than ever before are working together to better the planet while advancing their own interests.  Types of Partnerships 1 Leverage 2 Combine / 3 Transform Exchange Integrate This level consists of a This type of partnership is Taking on a challenge in a simple mutual benefit likely what first comes to new and multi-pronged between each party. mind when you hear about approach that results in a E.g., an aid agency a “collaboration” towards a seismic disruption to the partnering with a common sustainability status quo for all parties. university research goal. Tends to be cross- The problem being tackled institute: sector, where here won’t be as clearly The agency in this case complementary resources defined, e.g., ‘nutrition for would gain access to and expertise are used to developing nations,’ and research outputs, while make an impact on an ESG will require multiple actors providing funding or issue that wouldn’t be to cooperate in order to another source of data. possible or cost-effective come to fruition. alone. The process itself can be Collaboration in this messy, but the end result manner requires a high of this kind of partnership degree of planning and has big implications. risk. What value is added by forming a partnership? The Partnership Δ Delta While not an actual mathematical equation, a useful thought experiment attempting to quantify if the value of a potential partnership will be greater than the sum of its parts may be expressed through: ΔP = [Results of partnership approach] – [Sum of single actor approaches] ΔP here includes all the impact of the partnership – on individuals, organizations, sectors, systems and norms. Results of partnership approach here would be reducing the combined outcomes of working together to a single number. Sum of single actor here would be the total outcomes each actor would achieve individually. This is a shorthand model of what sort ofThe Partnering Cycle ( 1 / 4 ) lifecycle a partnership might move through. 1 2 This is just a basic Scopin Identifyin outline, every 12 g g Scoping partnership plays out Moving 3 and differently. Sustaining on Building Building Outcomes 11 4 Scaling Planning Long Term Signing an Planning 10 5 Revising Structuri Agreement ng 9 Reviewin Implementation 6 g Mobilizin Reviewing g Managing & Revising 8 7 & Measurin Deliverin g g Maintainin g  The Partnering Cycle ( 2 /4 ) Scoping & Identifying During the beginning stages of a partnership, all parties should be looking to how it may maximize value for each of them. The best way to go about this is to research what sort of similar initiatives are already underway. It’s better to build on what’s already been achieved, or learn from the mistakes of the past before starting from scratch. When considering stakeholders, and their role in the initiative, recognize the variety of resources they can offer, such as access to new personnel, marketing skills and purchasing power. The Partnering Cycle ( 3 / 4 ) Building and Planning There are two ‘journeys’ during the development process of a potential partnership: The development itself, how it changes as the partners negotiate and plan The journey of each individual side partner takes in order to enter into the partnership. Negotiations shouldn’t be about who gets the biggest slice of the pie, but about maximizing value for the partnership itself, and in turn, both parties.  The Partnering Cycle ( 4 / 4 ) Implementation and Review By this point in your partnership things are already up and running. In order to maximize value during this phase, you want to ensure three things: 1) Project management to set break points for when things veer too far off course, and what contingencies to enact, while keeping in mind #3… 2) Relationship management to maintain a level of trust and quality with your stakeholders. 3) Iteration / Adaptation. Rigidity can be the bane of any strong partnership. It’s important to allow a certain amount of opportunities to present themselves that may stem from the original plan, but weren’t part of it from the beginning  Case in Point: Partnerships ( 1 / 4 ) Joint Venture Success, be it through business or bettering the planet, is found often through joint ventures, a kind of partnership where companies combine their resources and expertise to achieve a common goal. One of the key drivers of sustainability in the automobile sector in the previous decade has been Tesla. Facing numerous hurdles related to R&D and production of batteries for their automobiles, the company made the right choice to reach out to a 3rd party manufacturer, in this case being Panasonic. Panasonic was able to meet all of Tesla’s needs to produce at scale, and was a low-risk option for the car-maker, not needing to develop their batteries from scratch.  Case in Point: Partnerships ( 2 / 4 ) From a marketing perspective alone, places of higher learning are rife with opportunity for brands to increase their market share in the critical 18-35 demographic. Nowadays, reusable-bottle water dispensers are a familiar sight in places such as airports and malls. Partnerships between academic institutions and companies help face the challenge in both assuaging consumer expectations as well as altering their behavior towards sustainability goals. Producing an estimated 255,000 disposable plastic bottles per minute, Coca-Cola has an uphill struggle when it comes to convincing young people that it’s part of the solution and not the problem. In 2018, the beverage company partnered with academic institutions such as Georgia Tech, to install free water-dispensing machines as part of its “Bottle-Free project.”  Case in Point: Partnerships ( 3 / 4 ) Do you follow any social media influencers? Maybe you enjoy their lifestyle tips, DIY projects, or money-saving hacks. For young people especially, influencers are a familiar face or voice that has gained their trust for not only product recommendations, but for a brand to appear truly invested in ESG issues. One of the cutting-edge brands when it comes to leveraging the social media, Patagonia has successfully reached younger people by partnering with influencers. The company was one of the first to realize the potential of influencer culture to champion their sustainability goals, including their motto ‘Consume Less.’  Case in Point: Partnerships ( 4 / 4 ) Non Governmental Organizations (NGOs) represent a common interest, are driven by issues rather than profit, and led by determined citizens across national borders. An NGO is a valuable partner to have in achieving sustainability goals, and enhancing your brand. Partnerships range from NGOs setting new standards, such as between Greenpeace and Apple. They may also be full-on formal partnerships such as the one between Starbucks and Conservation International. The two organizations established the C.A.F.E. Practices guideline, ensuring ethical sourcing and fair treatment for coffee growers. Can You Trust Them? Red Flags and Green Flags Just like in our personal lives, entering into a business partnership should be done with careful consideration and willingness for commitment. Otherwise, things could end in a messy breakup, like it did for Starbucks and Kraft back in 2010. Ask yourself these questions when considering a potential partnership: Do their sustainability objectives contrast with their business model? Collaborating with an energy company on environmental goals, who then spills 200 million gallons of oil in the Gulf of Mexico is a definite red flag. What’s their policy on disclosure of their own material issues? If they are willing to share data on their own impact, then that’s a green flag for them being serious in achieving their stated sustainability objectives. Is there a mutual benefit in your shared mission statement? Shareholders won’t appreciate sustainability being placed ahead of business. Ensure that your sustainability objectives not only provide good optics, but complement your respective business strategies.  Measuring Alliances Scenario: You are heading up a new Hig sustainability initiative around reducing Alliance plastic waste. You need to assess which h Hierarchy companies you already do business with will partner with yours on this initiative. Power – the Your company already has relationships ability that with the below 4 following businesses. party has to Click on each to learn more. influence on Powe what goes o the r Place them into the correct quadrant in business the chart, based on their Power or influence over your business strategy as Interest – the well as their level of Interest in achieving the initiative. n within NuSolutions, Pencils and partnerships’ Inc. Erasers, Ltd. level of Lo High concern or w interest by Interes Roy’s Discount Globo Move, what goes on t Groceries Logistics LLP within the business Image Credit: Randle, Eyre, Sustainable Marketing, 2023 Getting On The Level: Industry Alliances ( 1 / 2) Depending on your company’s specific industry, you may wish to enter into an Industry Alliance (IA), a voluntary agreement made among companies with parallel value chains set to higher standards than set by the governments. Here we’ll list a few of the more prominent of these industry alliances: Responsible Business Roundtable on Sustainable Alliance Palm Oil (RSPO) Companies within the palm oil A coalition of companies industry have been guilty of dedicated to promoting ethical encroachment on local populations practices in global supply and clearcutting of protected chains. Encompasses a range forests. To counter this negative of industries from electronics public image, the RSPO was to retail. formed, setting standards that ensure against such problematic practices.  Getting On The Level: Industry Standard Alliances ( 2 / 2) Global Green and Healthy Hospitals Sustainable Apparel (GGHH) Coalition (SAC) Aiming to improve public health, reducing healthcare waste, and reducing An industry wide alliance of environmental impact across borders, the apparel, footwear, and textile GGHH has a set of standards prospective companies, the SAC consists of hospitals and clinics may adhere to in NGOs, academics, and order bear its certification and prove they government organizations. are committed to sustainable healthcare Facilitates collaboration among practices. members to drive change in the fashion industry.  Safety in Numbers: Business Groups Business Groups (BGs) are affiliations where companies collaborate to collectively tackle sustainability challenges and avoid accusations of greenwashing. BGs are networks of loosely related affiliates led by an apex firm, a prominent industry leader that acts as the symbol or spokesperson for the group’s ESG initiatives. The apex firm often focuses on communicating and promoting ESG efforts, while other companies within the group implement the actual initiatives. This allows the group to maintain positive optics and meeting regulatory and public scrutiny. E.g., The Clean Cargo Working Group, led by apex firm Maersk, includes members such as H&M. This collaboration sets industry standards to reduce carbon emissions, with Maersk communicating efforts and members implementing practices, effectively avoiding greenwashing and genuinely improving sustainability across the industry.  Key Takeaways SDG #17 is the UN’s prescribed goal for engaging in not only business partnerships, but aiding developing countries financially, educationally, or through other means. The three types or “levels” of partnership can be divided into: leverage / exchange; combination / integration; and transformation. All requiring differing levels of risk and commitment for all parties involved. Potential partnerships should be weighed through such tools as the Partnership Delta, to determine if the value of the partnership will exceed the sum of its parts. Be wary of companies whose business model contrasts with the sustainability initiative they wish to engage in. Many companies are jumping on the ESG bandwagon, but for the wrong reasons.  References Buerkle, et. Al. “The Value of B Corps: What Investors Need to Know” https://cbey.yale.edu/our-stories/the-value-of-b-corps-what-investors-need-to-kno w , Impartner, https://impartner.com/resources/blog/business-partnerships-for-sustainability Shonk, https://www.pon.harvard.edu/daily/business-negotiations/the- starbucks-kraft-dispute-in-business-negotiations-prepare-for- problems/“Negotiation in Business: Starbucks and Kraft’s Coffee Conflict,” Program of Negotiation, Harvard Law School, 2024 Bothello, et. Al., “Research: How Some Companies Avoid Accusations of Greenwashing,” https://hbr.org/2023/09/research-how-some-companies-avoid- accusations-of-greenwashingHarvard Business Review, 2023 Maximizing the Impact of Partnerships for the SDGs; Stibbe, D.T., Reid S., Gilbert, J.; The Partnering Initiative and UN DESA (2018)