Toward SuSTainabiliTy: The roleS and limiTaTionS of ... - Resolve

Chapter 2: Actors – Business 40Chapter 2, Section CThe Roles and Drivers of BusinessThe last three decades have witnessed a radical transformation in the global businessenvironment. In place of local labor markets and regional trade systems, large companiesnow operate through integrated networks that span the globe and transcend nationalboundaries. International companies now source, manufacture, and sell multiple productsin multiple markets across multiple time zones.In this environment, big brands and retailers experiencea range of new and often complex risks,opportunities, and responsibilities. In particular,operating in foreign markets presents companieswith new ethical issues, arising from the differingsocial and environmental conditions and normsin developing countries (Samuel & Douglas,1996). To manage ethics-related risks, companieshave developed a range of corporate responsibilitypolicies and strategies, including voluntaryenvironmental management systems, statementsof ethics, codes of conduct, and annual reportingof their corporate responsibility and sustainabilityefforts (Auld, Bernstein, & Cashore, 2008; alsosee Appendix L).Standards and certification systems are part ofthis context. Participating companies—especiallythose at the top of supply chains in the retailand fast-moving consumer goods (FMCG) 1 sectors—haveviewed such systems as a means ofimproving their suppliers’ environmental andsocial practices, ensuring access to sustainablesupplies of scarce natural resources, enablingmarket access to institutional or business-tobusinessbuyers, and providing assurance toconsumers. Such systems also have the potentialto help companies identify problems, build capacityfor change, increase the rate of organizational1 Fast-moving consumer goods companies manufactureinexpensive products that consumers buy on a regularbasis, such as supermarket foods and toiletries.learning, and facilitate the inculcation of newvalues and norms (see Appendix L).This final section of Chapter 2 describes the rolestypically played by firms in standards and certificationsystems (in addition to the obvious role of“participant”); four attitudes toward certificationthat businesses may adopt; the drivers for andbarriers to business involvement in standardsand certification systems; and key questionscompanies may want to ask themselves whenconsidering certification. Boxes 2.3–2.11 provideillustrative case examples. 2This section focuses primarily on large brandsand retailers. The motivations of enterprises thatproduce and supply certified goods and services,as well as those of the traders and other middletierplayers in the supply chain, are not coveredin detail. This bias reflects the current state ofknowledge regarding standards and certificationsystems—i.e., most studies have looked at toptiercompanies that are purchasers of certifiedgoods. Also, these are the types of businessesrepresented on the Steering Committee, uponwhose real-world experience the section is partiallybased.2 Many of the boxes describe certification programs initiatedand run by corporations or industry associations.These initiatives typically differ from the multi-stakeholderstandards and certification models, which are the focusof most of this report, in their form of governance. Theinformation for these examples was drawn primarily fromcompany sources, and their inclusion does not implySteering Committee endorsement.Toward Sustainability: The Roles and Limitations of Certification