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Vertically differentiating environmental standards
The case of the Marine Stewardship Council
Simon Bush and Peter Oosterveer
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Standard differentiation
Ongoing research based on:
Bush, S. R., Toonen, H., Oosterveer, P., & Mol, A. P. (2013). The ‘devils triangle’of MSC certification: Balancing credibility, accessibility and continuous improvement. Marine Policy, 37, 288-293.
http://dx.doi.org/10.1016/j.marpol.2012.05.011
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Standard differentiation
Horizontal differentiation ‘Race to the bottom’ vs.‘ratcheting-up’
‘Internal’ vertical differentiation Technical focus on tiers and certification ‘pull’
External vertical differentiation?
● How does this occur?
● What implications does this phenomenon hold for the credibility of environmental standards?
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The rise of the MSC
Status grown with rise in consumer awareness and NGO pressure on retailers
Enormous (recent) growth
● 179 fisheries certified
● 12% of global stocks, up from 1% in 2001
● 10,000 products in 70 countries
Now seen as the ‘gold standard’ in fisheries certification
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Demonstrating improvement
Cambridge et al 2011
35% already comply with standards
65% of fisheries (i.e. with greatest room for improvement) don’t make it to full assessment
Only 7% of MSC certified fisheries from developing countries
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Externally-led vertical differentiation
Fisheries Improvement Projects
MSC‐minus MSC‐plus
+
International
Bush et al 2013; Toonen and Mol 2013
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Credibility
Accessibility Continualimprovement
MSC‐minus MSC‐plus
MSC
Untenable?
‘Devilstriangle’
Potential internal response
60
40
80
100
110?
Internal tiered approach
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Looking beyond the triangle
How did this challenge to the MSC came about and what implications does it have for the wider credibility of sustainability standards?
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Looking beyond the triangle
Global value chain analysis
● Standards as a horizontal form of coordination where practices are realigned to mirror or materialise norms
● Focus on why certain qualities emerge, how they gain traction, how they influence vertical coordination, and ultimately firm upgrading
● But is the same in reverse?
How does vertical coordination and strategic behaviour of firms influence definition of value claims around quality standards?
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Coordination and upgrading in GVCs
Cases reflect structural limitations of standards in regulating value chains – price premiums (MSC+) and access (MSC-)
Changing power and modes of coordination in the chain:
● Shift from niche to mainstream markets change interests of retailers (require volume)
● Horizontal links to NGOs become strategic for upgrading
● ‘Passive standard takers’ to active standard makers
Networks being built that circumvent limitations being posed by the standard – MSC is being challenged by networks it created
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Conclusions (so far)
MSC success to date illustrates possible reconciliation of civic and market conventions and maintaining credibility/authority in GVCs
But reconciliation is dynamic and on-going; defined by the vertical and horizontal coordination in value chains and strategic behaviour of firms
An internal technical focus on tiers and thresholds are an internal strategy but won’t address long term challenges to MSC credibility