Panel Paper: Private Regulation In the Forest Sector: Activism, Firm Responses, Changing Practices In Global Supply Chains

Saturday, November 10, 2012 : 8:30 AM
Hanover B (Radisson Plaza Lord Baltimore Hotel)

*Names in bold indicate Presenter

Graeme Auld, Carleton University

On August 26, 1999, in a move that shook the global forest sector, Arthur Black, Home Depot’s CEO, announced a landmark purchasing policy on certified wood products.  A year later, Lowe’s, the number two in the US home-retailer market, announced a similar commitment, and a cascade of other announcements followed, including ones by Centex Homes, Kaufman Broad, and 84 Lumber.  These announcements were not only individual public events in a longstanding political struggle to define global standards of responsible forestry.  They also exemplify a broader trend where global actors have retooled to shape environmental policies through global supply chains rather than via domestic and international public policy processes.  Still, their ramifications are not well understood.  Indeed, Home Depot and many other companies making similar commitments have not met the letter of their original intent.  Why is this?  And what implications does this have for the effectiveness of private regulation in the forest sector and beyond?

We examine these questions by exploring the forest-certification choices of U.S. forest product companies over a 20 year period.  Our analysis considers the role played by activist pressure, public policy requirements, and internal firm structural and managerial factors in explaining different certification choices.  We argue this serves to fill a missing piece of scholarly work on this critical historical period.  Much weight has been placed on the potential transformative effects of the environmental policies adopted by retailers such as Home Depot given the buying power these corporations can wield to shape the practices of their supply chains.  However, careful analysis that looked back to understand how and whether the individual commitments of retailers have affected practices in global supply chains remain largely absent.  Our analysis helps to fill this current research gap.

Key words: Forest certification, private regulation, corporate social responsibility, NGO activism