Skip to main content

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

Abstract

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.

This is a preview of subscription content, access via your institution.

Fig. 1

Source: Own representation; based on Zürn (1998) and Pattberg (2005a)

Notes

  1. Out of a group of around 2000 companies that publicly disclosed data in 2015, nearly 250 are regularly buying offsets. For more information, see Goldstein (2016).

  2. Author's interview with representative of a business association (November 16, 2017). For a detailed assessment of the ‘Business Case for Sustainability Concept’, see Schaltegger and Lüdeke-Freund (2012).

  3. The term private is used to describe governance activities that are performed by all types of non-state actors, including non-governmental organisations (NGOs), MNCs, business and industry associations, philanthropic foundations, think tanks as well as research institutions.

  4. Participant observation was conducted at COP21, COP22 and COP23, as well as at three sessions of the Subsidiary Bodies to the UNFCCC, namely SB42, SB43 and SB44. At each session, the author attended numerous side events and parallel workshops on deforestation with a particular focus on private governance activities. The speeches and statements were not recorded; however, detailed notes were taken.

  5. It has been estimated that cattle production is responsible for around 2,710,000 ha of tropical forests loss annually. In contrast, the second biggest driver—soy—is responsible for 480,000 ha (McCarthy 2016).

  6. Author's interviews with forest governance experts, forest consultants, NGO representatives and MNC representatives (November 2016; July 2017; November 2017).

  7. Freeman famously defines stakeholders as “any individual or group who can affect or is affected by the achievement of the organization's objectives” (Freeman 1984: 46). This includes, inter alia, shareholders, investors, employees, costumers, business partners, communities and governments.

  8. Author's interviews with forest governance experts, forest consultants, NGO representatives and MNC representatives (November 2016; July 2017; November 2017).

  9. Author's interview with representative of a business association (November 16, 2017).

  10. Author's participant observation at COP21 and COP22 (December 2015; November 2016).

  11. Author's interview with forest consultant (November 7, 2017).

  12. Author's interviews with forest governance experts, forest consultants, NGO representatives and MNC representatives (November 2016; July 2017; November 2017).

  13. Author's interviews with MNC representatives from the coffee sector (November 8, 2016; July 12, 2017; November 22, 2017).

  14. The social license is a concept that “requires any business to ensure its activities respect the rights of all of those in any community” (Morrison 2014).

  15. Author's interview with forest consultant (November 7, 2017).

  16. Author's interviews with forest governance experts, forest consultants, NGO representatives and MNC representatives (November 2016; July 2017; November 2017).

  17. Ibid.

  18. Ibid.

References

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Anne-Kathrin Weber.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Weber, AK. The revival of the Honourable Merchant? Analysing private forest governance at firm level. Int Environ Agreements 18, 619–634 (2018). https://doi.org/10.1007/s10784-018-9408-y

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10784-018-9408-y

Keywords

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