The revival of the Honourable Merchant? Analysing private forest governance at firm level

  • Anne-Kathrin Weber
Original Paper


In the context of global climate governance, multinational corporations (MNCs) are increasingly seen as financial, technical and political partners. Looking at MNCs with core business activities linked to deforestation, this article analyses private governance activities focused on sustainability that occur at firm level. These activities include newly enacted, concrete policies and activities aimed at climate protection, such as the concept of carbon insetting. The current body of the literature on global governance focuses largely on collective action, with activities at firm level still under-researched and under-conceptualized. To better understand (a) what drives MNCs to undertake such activities and (b) why their performance differs both within and between industry sectors, three motives are proposed—preventing reputational damage, building resilience and assuming ethical responsibility—with the latter indicating a revival of the Honourable Merchant, an economic role model created in the early 16th century. The empirical analysis is, therefore, embedded in a theoretical framework that seeks to capture the complexity of corporate rationality.


Multinational corporations Corporate motivation Corporate rationality Global climate governance Deforestation Carbon insetting 


  1. Andonova, L. B. (2010). Public-private partnerships for the earth: Politics and patterns of hybrid authority in the multilateral system. Global Environmental Politics, 10(2), 25–53.CrossRefGoogle Scholar
  2. APP. (2013). Sustainability targets and components. Accessed 13 March, 2018.
  3. APP. (2014). APP to support the protection and restoration of one million hectares of forest in Indonesia. Accessed 13 March, 2018.
  4. APP. (2015a). Asia Pulp & Paper’s commitment to support the protection and restoration of Indonesian forest landscape accepted into Bonn Challenge. Accessed 13 March, 2018.
  5. APP. (2015b). APP launches agroforestry programme in 500 villages to help protect Indonesia’s forests. Accessed 13 March, 2018.
  6. APP. (2015c). Asia Pulp and Paper joins We Mean Business campaign and commits to remove deforestation from its supply chain. Accessed 13 March, 2018.
  7. APP. (2015d). APP is a partner of ‘Solutions COP21’. Accessed 13 March, 2018.
  8. APP. (2018). About APP. Accessed 8 May, 2018.
  9. Bäckstrand, K., Kuyper, J. W., Linnér, B.-O., & Lövbrand, E. (2017). Non-state actors in global climate governance: From Copenhagen to Paris and beyond. Environmental Politics, 26(4), 561–579.CrossRefGoogle Scholar
  10. Boucher, D., Elias, P., Lininger, K., May-Tobin, C., Roquemore, S., & Saxon, E. (2011). The root of the problem: What’s driving tropical deforestation today. Cambridge: Union of Concerned Scientists.Google Scholar
  11. Bowen, F. (2014). After greenwashing. Symbolic corporate environmentalism and society. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  12. Brühl, T., & Hofferberth, M. (2013). Global companies as social actors: Constructing private business in global governance. In J. Mikler (Ed.), The handbook of global companies (pp. 350–370). Chichester: Wiley.Google Scholar
  13. Carrington, D. (2014). Is APP’s zero deforestation pledge a green villain’s dramatic turnaround? The Guardian, 2014. Accessed 13 March, 2018.
  14. Cashore, B., Auld, G., & Newsom, D. (2004). Governing through markets: Forest certification and the emergence of non-state authority. New Haven: Yale University Press.Google Scholar
  15. Chakravarty, S., Ghosh, S. K., Suresh, C. P., Dey, A. N., & Shukla, G. (2012). Deforestation: Causes, effects and control strategies. In C. A. Okia (Ed.), Global perspectives on sustainable forest management (pp. 3–28). Rijeka: InTech.Google Scholar
  16. Chan, S., Brandi, C., & Bauer, S. (2016). Aligning transnational climate action with international climate governance: The road from Paris. RECIEL, 25, 238–247.CrossRefGoogle Scholar
  17. Clapp, J. (2005). Transnational corporations and global environmental politics. In P. Dauvergne (Ed.), Handbook of global environmental politics (pp. 284–297). Cheltenham: Edward Elgar.Google Scholar
  18. Clark, D. (2011). A complete guide to carbon offsetting. The Guardian, 2011. Accessed 13 March, 2018.
  19. Coy, S. (2015). 10 Jahre Unternehmensverantwortung bei Tchibo. Accessed 8 February, 2018.
  20. Cutler, A. C., Haufler, V., & Porter, T. (1999). Private authority and international affairs. In A. C. Cutler, V. Haufler, & T. Porter (Eds.), Private authority and international affairs (pp. 3–28). New York: State University of New York.Google Scholar
  21. Czinkota, M. R. (2016). The Honorable Merchant and customer trust: Key dimensions for international business success. Thunderbird International Business Review, 58(3), 191–198.CrossRefGoogle Scholar
  22. Davis-Peccoud, J. (2013). Sustainability matters in the battle for talent. Harvard Business Review. Accessed 21 May, 2018.
  23. Falkner, R. (2001). Business conflict and U.S. international environmental policy: Ozone, climate, and biodiversity. In P. G. Harris (Ed.), The environment, international relations, and U.S. foreign policy (pp. 157–177). Washington, DC: Georgetown University Press.Google Scholar
  24. Falkner, R. (2003). Private environmental governance and international relations: Exploring the links. Global Environmental Politics, 3(2), 72–87.CrossRefGoogle Scholar
  25. Falkner, R. (2010). Business and global climate governance: A neo-pluralist perspective. In M. Ougaard & A. Leander (Eds.), Business and global governance (pp. 99–117). London: Routledge.Google Scholar
  26. Finnemore, M., & Sikkink, K. (2001). Taking stock: The constructivist research program in international relations and comparative politics. Annual Review of Political Science, 4(1), 391–416.CrossRefGoogle Scholar
  27. Flohr, A., Rieth, L., Schwindenhammer, S., & Wolf, K. D. (2010). The role of business in global governance: Corporations as norm-entrepreneurs. Basingstoke, NY: Palgrave Macmillan.CrossRefGoogle Scholar
  28. Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston, MA: Pitman.Google Scholar
  29. Fuchs, D. A. (2007). Business power in global governance. Boulder: Rienner.Google Scholar
  30. GCP. (2016). Sleeping giants of deforestation: The companies, countries and financial institutions with the power to save forests. The 2016 Forest 500 results and analysis. Accessed 4 May, 2018.
  31. GCP. (2017). Company assessment methodology 2017. Accessed 4 May, 2018.
  32. Goldstein, A. (2016). Buying in: Taking stock of the role of offsets in corporate carbon strategies. Washington: Forest Trends.Google Scholar
  33. Graham, D., & Woods, N. (2006). Making corporate self-regulation effective in developing countries. World Development, 34(5), 868–883.CrossRefGoogle Scholar
  34. Green, J. F. (2014). Rethinking private authority: Agents and entrepreneurs in global environmental governance. Princeton: Princeton University Press.Google Scholar
  35. Greenpeace. (2010). How Sinar Mas is pulping the planet. Accessed 13 March, 2018.
  36. Griscom, B. W., Adams, J., Ellis, P. W., Houghton, R. A., et al. (2017). Natural climate solutions. Proceedings of the National Academy of Sciences, 114, 11645–11650.CrossRefGoogle Scholar
  37. Gulbrandsen, L. H. (2004). Overlapping public and private governance: Can forest certification fill the gaps in the global forest regime? Global Environmental Politics, 4, 75–99.CrossRefGoogle Scholar
  38. Haggar, J., & Schepp, K. (2012). Coffee and climate change. Natural Resources Institute, University of Greenwich.Google Scholar
  39. Haufler, V. (2001). A public role for the private sector: Industry self-regulation in a global economy. Washington, DC: Carnegie Endowment for International Peace.Google Scholar
  40. Haufler, V. (2003). New forms of governance: Certification regimes as social regulations of the global market. In E. Meidinger, C. Elliott, & G. Oesten (Eds.), Social and political dimensions of forest certification (pp. 237–247). Remagen: Verlag Kessel.Google Scholar
  41. Haufler, V. (2010). Corporations in zones of conflict: Issues, actors, and institutions. In D. D. Avant, M. Finnemore, & S. K. Sell (Eds.), Who governs the globe? (pp. 102–130). Cambridge: Biozone International.CrossRefGoogle Scholar
  42. Hicks, R. (2017). Asia Pulp and Paper sustainability chief Aida Greenbury exits. Eco-Business. Accessed 13 March, 2018.
  43. Hofferberth, M. (2016). Multinationale Unternehmen in der Weltpolitik: Zur Kontingenz von Rolle und Bedeutung, sozialer Akteure‘. Baden-Baden: Nomos.CrossRefGoogle Scholar
  44. Hofferberth, M. (2017). ‘And of course our major contribution remains to run a decent business’: Making sense of Shell’s sense-making in Nigeria during the 1990s. Business and Politics, 19(1), 135–165.CrossRefGoogle Scholar
  45. Hofferberth, M., Brühl, T., Burkart, E., Fey, M., & Peltner, A. (2011). Multinational enterprises as ‘social actors’: Constructivist explanations for Corporate Social Responsibility. Global Society, 25(2), 205–226.CrossRefGoogle Scholar
  46. Holzer, B. (2010). Moralizing the corporation: Transnational activism and corporate accountability. Cheltenham: Edward Elgar.CrossRefGoogle Scholar
  47. Hsieh, H.-F., & Shannon, S. E. (2005). Three approaches to qualitative content analysis. Qualitative Health Research, 15(9), 1277–1288.CrossRefGoogle Scholar
  48. ICC. (2015). Global business sends clear message to policymakers for ambitious deal at COP21. Accessed 4 May, 2018.
  49. IPCC. (2014). Agriculture, forestry and other land use (AFOLU). In O. Edenhofer, R. Pichs-Madruga, Y. Sokona, et al. (Eds.), Climate change 2014: Mitigation of climate change: Contribution of working group III to the fifth assessment report of the intergovernmental panel on climate change. Cambridge: Cambridge University Press.Google Scholar
  50. Jordan, A., Wurzel, R. K. W., & Zito, A. R. (2005). Environmental governance or government? The international politics of environmental instruments. In P. Dauvergne (Ed.), Handbook of global environmental politics (pp. 202–217). Cheltenham: Edward Elgar.Google Scholar
  51. Kolk, A., Kourula, A., & Pisani, N. (2017). Multinational enterprises and the Sustainable Development Goals: What do we know and how to proceed? Transnational Corporations, 24(3), 9–32.CrossRefGoogle Scholar
  52. Kolk, A., Levy, D. L., & Pinske, J. (2008). Corporate responses in an emerging climate regime: The institutionalization and commensuration of carbon disclosure. European Accounting Review, 17(4), 719–745.CrossRefGoogle Scholar
  53. Kollman, K. (2008). The regulatory power of business norms: A call for a new research agenda. International Studies Review, 10(3), 397–419.CrossRefGoogle Scholar
  54. Kollman, K., & Prakash, A. (2001). Green by choice? Cross-national variations in firms’ responses to EMS-based environmental regime. World Politics, 53(3), 399–430.CrossRefGoogle Scholar
  55. Kondracki, N. L., Wellman, N. S., & Amundson, D. R. (2002). Content analysis: Review of methods and their applications in nutrition education. Journal of Nutrition Education and Behavior, 34, 224–230.CrossRefGoogle Scholar
  56. Levy, D. L., & Newell, P. (2000). Oceans apart? Business responses to global environmental issues in Europe and the United States. Environment, 42(9), 8–20.Google Scholar
  57. Levy, D. L., & Newell, P. (2002). Business strategy and international environmental governance: Toward a neo-Gramscian synthesis. Global Environmental Politics, 2(4), 84–101.CrossRefGoogle Scholar
  58. Malets, O., & Böhling, K. (2018). The Perspective of civil society organizations: The missing link in corporate social responsibility activities and programs. In H. Backhaus-Maul, M. Kunze, & S. Nährlich (Eds.), Gesellschaftliche Verantwortung von Unternehmen in Deutschland: Ein Kompendium zur Erschließung eines sich entwickelnden Themenfeldes (pp. 49–66). Wiesbaden: Springer.CrossRefGoogle Scholar
  59. March, J. G., & Olsen, J. P. (1998). The institutional dynamics of international political orders. International Organization, 52, 943–969.CrossRefGoogle Scholar
  60. McCarthy, B. (2016). Supply change: Tracking corporate commitments to deforestation-free supply chains. Washington: Forest Trends.Google Scholar
  61. Morrison, J. (2014). Business and Society: Defining the ‘Social Licence’. The Guardian, 2014. Accessed 6 June, 2018.
  62. Nielsen. (2015). The sustainability imperative: New insights on consumer expectations. Accessed 13 March, 2018.
  63. Nuremberg Chamber of Commerce and Industry. (2017). The Honorable Merchant. Accessed 16 May, 2018.
  64. Olsen, J. P. (2007). Understanding institutions and logics of appropriateness: Introductory essay. ARENA Working paper no. 13. Accessed 13 March, 2018.
  65. Oxford Dictionary. (2018). Rule: Definition 1. Accessed 3 May, 2018.
  66. Pattberg, P. H. (2005a). The institutionalization of private governance: How business and nonprofit organizations agree on transnational rules. Governance, 18(4), 589–610.CrossRefGoogle Scholar
  67. Pattberg, P. H. (2005b). What role for private rule-making in global environmental governance? Analyzing the Forest Stewardship Council (FSC). International Environmental Agreements: Politics, Law and Economics, 5(2), 175–189.CrossRefGoogle Scholar
  68. Pattberg, P. H. (2005c). The Forest Stewardship Council: Risk and potential of private forest governance. The Journal of Environment and Development, 14(39), 356–374.CrossRefGoogle Scholar
  69. Pattberg, P. H., & Stripple, J. (2007). Remapping global climate governance: Fragmentation beyond the public/private divide. Global governance working paper no. 32.Google Scholar
  70. Persson, M., Henders, S., & Kastner, T. (2014). Trading forests: Quantifying the contribution of global commodity markets to emissions from tropical deforestation. Working paper 384, Center for Global Development.Google Scholar
  71. Rainforest Alliance. (2015). An evaluation of Asia Pulp & Paper’s progress to meet its forest conservation policy (2013) and additional public statements: 18 month progress evaluation report. New York: Rainforest Alliance.Google Scholar
  72. Rao, H. (1994). The social construction of reputation: Certification contests, legitimation, and the survival of organizations in the automobile industry: 1895–1912. Strategic Management Journal, 15(8), 29–44.CrossRefGoogle Scholar
  73. Rindova, V. P., Williamson, I. O., Petkova, A. P., & Sever, J. M. (2005). Being good or being known: An empirical examination of the dimensions, antecedents, and consequences of organizational reputation. Academy of Management Journal, 48(6), 1033–1049.CrossRefGoogle Scholar
  74. Rosenau, J. N. (1995). Governance in the twenty-first century. Global Governance, 1(1), 13–43.Google Scholar
  75. Schaltegger, S., & Lüdeke-Freund, F. (2012). The ‘business case for sustainability’ concept: A short introduction. Centre for Sustainability Management (CSM), Lüneburg.Google Scholar
  76. Scherer, A. G., & Palazzo, G. (2012). The new political role of business in a globalized world: A review of a new perspective on CSR and its implications for the firm, governance, and democracy. In H. Corsten & S. Roth (Eds.), Nachhaltigkeit: Unternehmerisches Handeln in globaler Verantwortung (pp. 15–50). Wiesbaden: Gabler Verlag.CrossRefGoogle Scholar
  77. Scherer, A. G., Palazzo, G., & Matten, D. (2014). The business firm as a political actor: A new theory of the firm for a globalized world. Business and Society, 53(2), 143–156.CrossRefGoogle Scholar
  78. Scott, C. E., Monks, S. A., Spracklen, D. V., & Arnold, S. R. (2018). Impact on short-lived climate forcers increases projected warming due to deforestation. Nature Communications, 9, 157.CrossRefGoogle Scholar
  79. Shah, V. (2017). NGOs decry APP’s new giant paper mill. Eco-Business, 2017. Accessed 13 March, 2018.
  80. Skar, R. (2014). What Greenpeace learned from five years with Kimberly-Clark. Accessed 8 May, 2018.
  81. Smedley, T. (2015). Forget carbon offsetting, insetting is the future. The Guardian, 2015. Accessed 13 March, 2018.
  82. Turnbull, P. W. (1985). The image and reputation of British suppliers in Western Europe. European Journal, 19(6), 39–52.Google Scholar
  83. Twin. (2015). Improving climate change resilience for smallholder coffee farmers. Accessed 13 March, 2018.
  84. Ullmann, P. (2018). Companies should use profits for the good of society. Accessed 9 May, 2018.
  85. West, T. (2018). Big business v. social enterprise round 1: UK recruitment giant boss demands public contracts overhaul. Accessed 9 May, 2018.
  86. Wilcox, M. (2017). L’Oreal, Chanel and Nespresso pioneer ‘carbon insetting’. Accessed 11 April, 2018.
  87. Wolf, K. D. (2008). The new interplay between the state, business and civil society. In A. G. Scherer & G. Palazzo (Eds.), Handbook of research on global corporate citizenship (pp. 225–248). Cheltenham: Edward Elgar.Google Scholar
  88. Zelli, F., Möller, I., & van Asselt, H. (2017). Institutional complexity and private authority in global climate governance: The cases of climate engineering, REDD + and short-lived climate pollutants. Environmental Politics, 26(4), 669–693.CrossRefGoogle Scholar
  89. Zürn, M. (1998). Regieren jenseits des Nationalstaates: Globalisierung und Denationalisierung als Chance. Frankfurt am Main: Suhrkamp.Google Scholar

Copyright information

© Springer Nature B.V. 2018

Authors and Affiliations

  1. 1.Department of Political ScienceUniversity of FreiburgFreiburgGermany

Personalised recommendations