Exploring the Influence of NGOs in Corporate Sustainability Adoption: Institutional-Legitimacy Perspective

Abstract

This review seeks to examine the power and influence of Non-Governmental Organizations in the course of corporate sustainability adoption (i.e., sustainability reporting). Using the institutional-legitimacy and governance theories, our findings suggest that non-governmental organizations (NGOs) have great potentials in sustainability discourse through two salient actions, namely (a) collaborative partnership, and (b) confrontational tactics. While the former promotes stakeholder involvement in corporate decision-making through dialogue, joint-projects on corporate social responsibility, and sustainability reporting, the latter, however, is the last resort—involving “naming and shaming” corporations for poor social and environmental performance. The objective of such action is to cause reputational damage to businesses. Finally, it is also observed that crucial to NGO power and influence is the collaboration with government and civil society organizations in the fight for environmental sustainability and accountability.