Making a Difference? The Impact of Environmental NGO campaigns on Deforestation in Brazil

Abstract

This paper provides causal evidence that NGO campaigns targeted at firms influence land-use decisions in Brazil’s soy and beef supply chains—two of the leading drivers of tropical deforestation globally. Using a shift-share design that exploits quasi-exogenous variation in campaign timing and firm–municipality trade linkages, I find that municipalities exposed to NGO targeting through extensive trade with targeted firms significantly reduces deforestation, primarily by deterring forest-to-cattle conversion. Simultaneously, campaigns promote reallocation from cattle grazing to soy cultivation, indicating a shift toward more intensive and economically productive land uses. These transitions are accompanied by measurable gains in land productivity, suggesting that NGO pressure not only curbs extensive deforestation but also enhances the efficiency of existing agricultural areas. The results underscore the persistent influence of civil society in shaping environmental outcomes, even after formal supply-chain commitments are in place, and highlight the broader potential of reputational governance to complement state regulation in managing global environmental externalities.