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

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Chapter 2: Actors–Business 43Box 2.5Promoting Fair Laborin the Toy IndustryIn the wake of consumer concerns about working conditionsin toy manufacturing plants, the international toy industry hasinvested heavily in recent years to develop a robust certificationsystem to prove compliance. The effort is being driven bythe International Council of Toy Industries (ICTI), an industryassociation.The ICTI developed its own “CARE Process” in 2004—aprogram aimed at ensuring manufacturing compliance withthe ICTI Code of Business Practices. The CARE Process seeksto guarantee the provision of safe and humane workplaceenvironments for toy factory workers worldwide. In addition tofactory monitoring, the CARE Process includes education andtraining about workplace standards. The initial focus is on China,Hong Kong, and Macau, where approximately four-fifths of theworld’s toys are manufactured.Under the CARE Process, annual audits are carried out byindependent third parties accredited by the ICTI CARE TechnicalAdvisory Council. One of the conditions of accreditation is thatan auditing firm must not maintain any consulting relationshipwith the same factory that it will audit on social complianceissues. If a factory is found to be noncompliant, it must reachan understanding with the audit firm on the findings of the auditand, if necessary, implement a corrective action plan. SinceSeptember 2006, the ICTI has made it obligatory for all membersto prove that they meet the agreed-upon social requirementsrelating to legality, safety, and sanitation.Four Attitudes of Businesstoward CertificationThe Steering Committee drew on publishedliterature and its own experience to identifyfour main attitudes that companies may adoptwhen thinking about certification: tactical riskmanagement, tactical opportunity, strategic riskmanagement, and strategic opportunity (seeFigure 2.1). These categories are intended todescribe the primary attitude of a company towardcertification. To an extent they are incremental,and companies may progress through them inphases. At present, the bulk of companies seemto be in the first phase while very few appear to bein the fourth. 7Attitude I:Tactical Risk ManagementCompanies in this first attitudinal phase considercertification from a “firefighting” or defensivepoint of view. This phase often includes those whoare the targets of stakeholder pressures or NGOcampaigns, who have typically reacted fastest inadopting certification as a tool. (See Box 2.5.)However, nontargeted companies may respondas well. Many manufacturers and retailers see abusiness-to-consumer (B2C) message as proofthat they are “doing something” to address publicconcerns.The U.S. seafood market provides a good example.As noted previously, retailers such as Walmartand Kroger have made sustainable seafood commitments;Costco, Aldi, Trader Joe’s, and othershave done so as well. All of these commitmentswere made in part due to advocacy pressure fromNGOs such as Greenpeace. Such advocacy campaignsessentially pit retail chains against oneother by holding up a spotlight to the industry’sprocurement practices as a whole (see AppendixE). This competitive dynamic, coupled with thewww.toy-icti.org7 These phases are based loosely on Hunt and Auster(1990) and also informed by Steering Committee members’own experiences and views. Hunt and Auster’s modelwas developed to assess company engagement withenvironmental management and included five phases:Beginner, First Fighter, Concerned Citizen, Pragmatist,and Proactivist. See also Zadek (2004).Toward Sustainability: The Roles and Limitations of Certification
Chapter 2: Actors – Business 44Figure 2.1: Four Attitudes toward CertificationPhaseTactical RiskManagementTacticalOpportunityStrategic RiskManagementStrategicOpportunityCommitment of organizationGeneral mindsetof managersCompliancedominatedCompliance andstrategy dominatedCommerciallydominatedStrategy andcommerciallydominatedResourcecommitmentSupport andinvolvement oftop managementHigh Moderate Moderate HighModerate Moderate High IntegralProgram designPerformanceobjectivesMinimize risksMarketing advantageStrategicmanagementSustainablebusiness successFunctionalinvolvementProcurement Marketing Marketing and sales All divisionsReporting to public Formal report Certification labelCertification labeland formal reportCreativecommunicationReporting structuresInvolvement with:Legal counsel Moderate Moderate Moderate HighPublic relations None Moderate Moderate HighProcurement High High High HighMarketing Minimal Moderate High Highthreat of having corporate brands tarnished, is thepredominant driver for companies with a “tacticalrisk” mindset.It is important to note that companies withoutvisible brands or that are exempt fromconsumer pressures, such as those in manybusiness-to-business (B2B) industries, are lessinclined to such an attitude.Attitude II:Tactical OpportunityHaving adopted a certification system for defensivereasons, a consumer-facing company mayToward Sustainability: The Roles and Limitations of Certification
Page 4 and 5: PrefaceIn 2008, the David and Lucil
Page 6 and 7: AcknowledgementsThe Steering Commit
Page 8 and 9: IntroductionOver the past ten years
Page 10 and 11: Introduction 3work at the scale req
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Page 25 and 26: Chapter2Why and How Actors Engagein
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Chapter 5: Trends 94or coffee certi
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Chapter 5: Trends 96involve tough,
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Chapter 5: Trends 98also about the
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Chapter6RecommendationsThis final c
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Recommendations 102These observatio
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Recommendations 1061. Basic Discove
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TowardSustainabilityThe Roles andLi
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