Assignment 2: Typology Report (International Environmental Policy)
Module Title: BMGT30330 Governing the International Business Environment
Student Name: Colin Ratcliffe
Student Number: 11362941
Fig 1.1 Showing standard-setting bodies and their locus
Public
Private
Non-Market United Nations Environment
Programme (UNEP)
European Union (EU) (≈)
Market
European Union (EU) (≈)
World Wide Fund for Nature (WWF) (≈)
World Wide Fund for Nature (WWF) (≈)
Forestry Stewardship Council (FSC)
Programme for the Endorsement of Forest
Certification (PEFC)
Forestry Stewardship Council
The FSC is a global, not-for-profit organisation whose aim is to promote sustainable forestry
practices. The FSC was founded in 1993 and some of its key members include businesses like Tetra
Pak, and NGOs like the World Wide Fund for Nature and Greenpeace.
The FSC falls into the category of a Non-State Market-Driven organisation as described by
Cashore (2002). An NSMD is a non-governmental organisations whose authority is primarily drawn
from its engagement with, and manipulation of market dynamics. Drawing on the work of Suchman
(1995), Cashore (2002) argues that this authority is validated through a series of pragmatic, moral
and cognitive 'legitimacy' dynamics. He claims that organisations such as the FSC seek legitimation
through 'achievement' strategies – essentially methods to gain legitimacy through the processes of
conforming, manipulating and informing outside external audiences.
The main tool the FSC uses to achieve market-manipulation is its certification program.
Forest landowners and forestry companies deemed to practice sustainable forestry according to FSC
rules are awarded a certification. The FSC certification adds business value to products produced
from certified forests. Furthermore, the FSC rewards firms who buy certified products. This
essentially leads to a sway in the market to create change. As Cashore (2002) explains:
'In the case of the FSC, firms that have opted to operate under the FSC governance have almost
always done so by evaluating whether their participation can improve market access or reduce
market decline.'
Bartley (2007) suggests that this market-driven approach was inspired by past failures in
environment management – mainly failed boycotts and attempts at standard-setting by
intergovernmental organisations.
World Wide Fund for Nature (WWF)
The World Wide Fund for Nature is a non-governmental environmental organisation who
states (WWF, 2013) its objective is to 'safeguard the natural world, helping people live more
sustainably and take action against climate change.' It is the largest independent conservation
organisation with over 5 million supporters in over 100 countries worldwide.
Categorising the WWF as being a market- or non-market-driven organisation is tricky as it
is, essentially, both:
(a) Non-market-driven activities: The WWF works as an advocacy and policy formulation
group which counsels to, and collaborates with governments on environmental policy. Its website
states (WWF, 2013):
“WWF works at many levels to both convince and help governments and other political bodies
adopt, enforce, strengthen and/or change policies, guidelines and laws that affect biodiversity
and natural resource use.”
(b) Market-driven activities: The WWF works with major firms and their supply chains to alter
the way products are financed and produced with an aim to promote improved sustainability. For
example, it was a co-founder of the Marine Stewardship Council whose objective is to use
market-manipulation to set standards in the marine industry. Similarly, the WWF was a key actor
in the birth of the FSC as outlined above. Hansen (1998) suggests that the WWF is further
engaged in market-manipulation through its organisation of 'buyers' groups' in relation to the
purchase of certified woods. This could be seen as an example of the conforming achievement
strategy to gain pragmatic legitimacy as outlines by Cashore (2002).
United Nations Environment Programme
The UNEP is an inter-governmental agency dedicated to the development of environmental
sustainability policies, particularly in developing nations. It is a subordinate of the United Nations.
The UNEP is a non-market, public organisation. While it engages in research and the
publication of reports, its primary function is to design environmental policies and laws and assist
with their implementation. Furthermore, it provides support and counsel to other intergovernmental
bodies such as the AMCEN in Africa and the SEPD in Asia and the pacific.
European Union
The European Union is an economic and political union consisting of 28 member states, thus
it is a public, inter-governmental standard-setting body. While it is not its sole focus, designing
environmental policy is a significant portion of the EU's activity. EU environmental policy is
constructed by numerous actors such as the Council of Ministers and the European Commission,
albeit with input from a variety of lobby groups and NGOs.
While it is primarily a non-market organisation, the EU does sometimes engage in marketlike competition with regard to standard setting. For example, Büthe (2007) suggest that the EU
have essentially engaged in market-like competition with regard to standards for determining the
structure of a market to decide whether antitrust or the restriction of mergers is warranted. In this
regard, EU regulations repeatedly prevail over their opposing US or such counterparts. (While these
regulations don't relate directly to environmental standards, they do show evidence of an instance
where an environmental standard-setting body acts in both market and non-market capacities.)
Programme for the Endorsement of Forest Certification (PEFC)
The PEFC is an international, private standard-setting organisation which, too, promotes
sustainable forestry governance chiefly through separate third-party certification. According to its
website (PEFC, 2013) it is the world's largest forestry certification system.
The PEFC also falls under Cashore's (2002) Non-State Market-Driven category. Much like
the FSC, its authority is drawn from its market-manipulation by way of its numerous forest
certification schemes. It could be argued that the PEFC's authority is validated by the same
legitimacy dynamics as Cashore (2002) claims validate that of the FSC. The PEFC is the main
alternative to the FSC certificate scheme program.
References:
Bartley, T. (2007). Institutional emergence in an era of globalization: the rise of transnational
private regulation of labor and environmental conditions. American Journal of Sociology 113(2):
p297–351.
Büthe, T. and Mattli, W. (2010). International Standards and Standard‐ Setting Bodies. In: Coen D.,
Grant, W. and Wilson G. The Oxford Handbook of Business and Government. USA: Oxford
University Press.
Cashore, B. (2002). Legitimacy and the privatization of environmental governance: how non‐ state
market‐ driven (NSMD) governance systems gain rule‐ making authority. Governance 15(4):
p503–29.
Hansen, E. (1998). Certified Forest Products Marketplace. Forest Products Annual Market Review.
1(3): p24.
PEFC. (2013). Who We Are. Available: http://www.pefc.org/about-pefc/who-we-are. Last accessed
25th October 2013.
Suchman, M. C. (1995). Managing Legitimacy: Strategic and Institutional Approaches. The
Academy of Management Review. 20(3): p571-610.
World Wide Fund for Nature. (2013). Advocacy & Policy. Available:
http://wwf.panda.org/what_we_do/how_we_work/policy/. Last accessed 25th October 2013.