Governmental Influence on Environmental Upgrading
A Case Study on the Influence of Dutch Public Policy Context on
Environmental CSR Policies of the Country’s Leading Supermarkets
Sanne Burgers (12302821) June 2019
Supervisor: Philip Schleifer Second reader: Luc Fransen
Master thesis Political Science (Political Economy Specialization) Research Project: Transnational Sustainability Governance
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Abstract
Governmental influence on environmental corporate social responsibility and environmental upgrading is often ignored. Multiples scholars have identified this as a research gap that requires closer investigation (Khattak & Pinto, 2018; Mayer & Pickles, 2011; Sturgeon, 2009). This thesis responds to these demands. It aims to gain a better understanding of governmental influence on environmental upgrading. More specifically, it aims to integrate frameworks of different types of environmental upgrading and different types of public policies. For that purpose, it distinguishes between product upgrading, process upgrading, functional upgrading and inter-sectoral upgrading (Humphrey & Schmitz, 2002).
Furthermore, public policy may be legal, economic, informational, partnering or hybrid (Steurer, 2009). Research will be conducted through means of an in-depth single case study on the Dutch supermarket sector. This thesis focuses on the five leading supermarkets in the country: Albert Heijn, Jumbo, Lidl, ALDI and PLUS. The empirical research is based on governmental websites, sustainability reports of the supermarkets and interviews. This thesis identifies four hypotheses which seem to be generalizable beyond the empirics of the
particular case study. First of all, public policy context is an external driver and co-definer of environmental upgrading. Secondly, the availability of informational public policy tools, providing they consist of reliable and independent information, is perceived as a basic condition for a facilitative public policy context. Next, there is a linkage between financial incentives provided by economic public policy tools and the acceleration of environmental process upgrading. This is on the precondition that a company is already planning to invest in environmental process upgrading. Fourthly, partnering public policy tools may facilitate and influence all types of environmental upgrading. Their effect is dependent on a lot of factors.
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Contents
List of Tables ………. p. 5 List of Abbreviations ………. p. 6 1. Introduction ………... p. 7 1.1. Topic and Relevance ……….. p. 7 1.2. Research Question ..……… p. 8 1.3. Structure ………. p. 9 2. Literature Review ………. p. 10
2.1. Environmental Upgrading and Value Chains ..………. p. 10 2.2. Internal and External Drivers of Environmental Upgrading ..………... p. 11 2.3. Public Policies on CSR as an External Driver ……….. p. 13 3. Conceptual Framework ………. p. 20 3.1. Independent Variable: Public Policies ………... p. 16 3.2. Dependent Variable: Environmental Upgrading ……… p. 19 4. Methodology ………. p. 21 4.1. Research Design ………. p. 21 4.2. Case Selection ……… p. 21 4.3. Data Collection ……….. p. 23 4.4. Validity, Reliability and Replicability ……… p. 24 5. Environmental Challenges in the Food Sector ……….. p. 26 6. Public Policies on CSR ………. p. 28 6.1. Public Actors ………. p. 28 6.2. Legal Policy Tools ………. p. 29 6.3. Economic Policy Tools ……….. p. 30 6.4. Informational Policy Tools ………. p. 31 6.4.1. Raise Awareness ………. p. 31 6.4.2. Improve Transparency ………. p. 32 6.4.3. Foster SRI ………. p. 33 6.4.4. Lead by Example ……….. p. 33 6.5. Partnering Policy Tools ……….. p. 33 6.5.1. Raise Awareness and Improve Transparency ……….. p. 33 6.5.2. Improve Transparency and Foster SRI ………. p. 34
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6.5.3. Foster SRI ………. p. 35 6.5.4. Lead by Example ………. p. 36 6.6. Hybrid Policy Tools ……… p. 36 6.7. Discussion of the Public Policy Context: Facilitating CSR? ..……… p. 37 7. Environmental Upgrading ………. p. 41 7.1. Environmental Reporting by the Supermarkets ……….. p. 41 7.2. Environmental Upgrading by the Supermarkets ….……… p. 43 7.3. Familiarity With and Use of Dutch Public Policies ……… p. 48 7.3.1. Familiarity With and Use of Informational Policy Tools ………… p. 49 7.3.2. Familiarity With and Use of Economic Policy Tools ……….. p. 50 7.3.3. Familiarity With and Use of Partnering Policy Tools ………. p. 51 7.4. From Empirics to Theory: Integrating the Frameworks ……… p. 53 8. Prospects for the Sector ………. p. 56 9. Limitations and Possibilities for Further Research ……… p. 58 10. Conclusion ……….. p. 59 11. Acknowledgements ……… p. 61 Reference List ……….. p. 62 Appendix ……….. p. 68
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List of Tables
1. Themes of public policies on CSR ……….. p. 17 2. Public policy instruments ……… p. 18 3. Four types of environmental upgrading ………... p. 20 4. Dutch public policies on CSR, based on the matrix from Steurer ……… p. 39 5. Environmental upgrading by Dutch supermarkets .………. p. 47 6. List of interviewees ………. p. 68
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List of Abbreviations
CBL Central Office for Food Trade CEO Chief Executive Officer
CSR Corporate Social Responsibility
DKTI-Transport Demonstration Regulation Climate Technology and Innovation in Transport
ECSR Environmental Corporate Social Responsibility EIA Energy Investment Allowance
GVC Global Value Chain
ICSR International Corporate Social Responsibility IDH Sustainable Trade Initiative
Manifest MVI Manifest Socially Responsible Public Procurement MIA Environmental Investment Rebate
NGO Non-governmental Organisation
PIANOo Dutch Public Procurement Expertise Centre PWMC Packaging Waste Management Contribution SDE+ Stimulation of Sustainable Energy Production SER Social and Economic Council
SRI Socially Responsible Investment
Vamil Arbitrary depreciation of environmental investments ZES Zero Emissions City Logistics
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1. Introduction
1.1. Topic and Relevance
In February 2019, as much as 70 businesses and organisations signed the Dutch Plastic Pact. Thereby the government joins forces with the private sector in order to reduce one fifth of plastic use by 2025 and make all plastic packaging recyclable. This initiative does not stand alone. In the last two decades governments have become increasingly active in promoting and shaping corporate social responsibility (CSR). Other examples of this are the conclusion of covenants in at least twelve sectors that are prone to environmental or social risks and the increasing availability of financial incentives for companies that engage in CSR.
CSR is any business strategy that takes social and environmental considerations into account on top of economic objectives. While CSR was first assumed to be a responsibility of companies themselves, nowadays it is perceived as an issue that should be managed on a political level as well (Knudsen, Moon & Slager, 2015). As a result of this, governments are increasingly seen as drivers of CSR (Beare, Buslovich & Searcy, 2014). This leads to new roles adopted by the government, new relationships between public and private actors, and the use of new – often voluntary and ‘soft’ – policy instruments (Albareda, Lozano & Ysa, 2007; Steurer, Martinuzzi & Margula, 2011). This thesis aims to gain a better understanding of public policies on CSR through a case study on governmental influence on environmental corporate social responsibility (ECSR) of Dutch supermarkets.
The Dutch government offers several policy tools to promote ECSR. The most common methods are the provision of information, the use of financial incentives and the conclusion of agreements and partnerships. This thesis will investigate the influence of such tools on supermarkets’ ECSR, more specifically on ‘environmental upgrading’.
Environmental upgrading is any way in which a company reduces its environmental damage. This might be by changing its product range, by making its production processes more environmental friendly or by acquiring new functions. It has been found that powerful firms are likely to engage in environmental upgrading for their own business activities but also by requiring high standards from their suppliers thereby exceeding the minimum legal standards (Golini, De Marchi, Boffelli & Kalchschmidt, 2018, p. 19; Khattak and Pinto, 2018).
Supermarkets tend to be so-called ‘lead firms’ that have a lot of power over their suppliers (Burch, Dixon & Lawrence, 2013; Fuchs, Kalfagianni & Arentsen, 2009). In the Netherlands,
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this power asymmetry is reinforced by the fact that the two largest supermarkets in the country – Albert Heijn and Jumbo – hold more than half of the market share.
Scholars have increasingly been expressing the need for a better understanding of the institutional context on environmental upgrading (Khattak & Pinto, 2018; Mayer & Pickles, 2011; Sturgeon, 2009). The academic contribution of this thesis is thus to address this
particular gap in the literature. Institutional context can be understood quite broadly, including social and economic conditions. This thesis, however, focusses on Dutch governmental
policies only. Some work has been done on conceptualizing public policies on CSR (e.g. Fox et al., 2002; Zappala, 2003; Nelson, 2004, Prakash and Kollman, 2004 and Steurer, 2009) and there have been a few case studies on the topic (e.g. Beare et al., 2014 and Decker, 2016). This thesis will add empirical evidence to the debate with its specific case study. Moreover, it will be the first study to link different types of policy instruments explicitly to environmental upgrading.
With regards to its social contribution, this thesis aims to provide insight in the effects of public policies on CSR and the potential limits of such policies. This could make
governments, policy makers and potentially also other stakeholders such as non-governmental organizations (NGOs) aware of which policy tools might be useful and which ones might be not for the aims they are wishing to achieve. Furthermore, the choice for the supermarket sector reinforces this social contribution, as it has been identified as one of the priority sectors with regard to CSR risks in the Netherlands (KPMG, 2014).
1.2 Research Question
The research question that this thesis aims to answer is the following: How do public policies influence environmental upgrading, with regard to supermarkets in the Netherlands? In order to be able to investigate that question more systematically throughout this thesis, I have chosen to formulate three sub-questions. These are:
o Which Dutch public policy tools on environmental corporate social responsibility are in place with regard to supermarkets? (descriptive)
o To what extend does the public policy context facilitate or influence environmental upgrading by Dutch supermarkets? (analytical)
o As a result of the findings, what are the prospects for future environmental upgrading in Dutch food retail? (policy-orientated)
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1.3. Structure
This thesis will be structured as follows. Firstly, the literature review presents some key debates on environmental upgrading and on public policies on CSR. The chapter thereafter outlines the conceptual framework. Chapter 4 provides an explanation of the research design, the data collection methods that were used and the choice for the this particular case study. It also discusses issues of validity, reliability and replicability. Chapter 5 explains what
environmental challenges there are in the food sector providing some background for the subsequent empirical chapters. Chapters 6, 7 and 8 will each address one the sub-questions in the same order as they were presented above. Finally, chapter 9 identifies limitations and possibilities for future research and chapter 10 summarizes the conclusions.
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2. Literature Review
The chapter will be divided into three sections, the first of which discusses literature on environmental upgrading. The second section deals with literature on internal and external drivers of environmental upgrading. Finally, the third section discusses public policies on CSR as an external driver of environmental upgrading.
2.1. Environmental Upgrading and Value Chains
Environmental upgrading is a process that takes place in value chains. Value chains
encompass “the full range of activities that firms and workers perform to bring a product from its conception to end use and beyond” (Gereffi & Fernandez-Stark, 2016, p. 7). The value chain is a concept that originates from business management and the term was first coined by Michael Porter. Since the activities in such value chains have become increasingly dispersed geographically, the literature now often refers to global value chains (GVCs) (Gereffi & Fernandez-Stark, 2016).
Upgrading concerns processes and changes within a value chain. Traditionally,
upgrading has been defined as “firms, countries or regions moving to higher value activities in GVCs in order to increase the benefits […] from participating in global production” (Gereffi & Fernandez-Stark, 2016, p. 12). Later, this became known as ‘economic’ upgrading, thus emphasising that there is more than one dimension to the concept. Nowadays, scholars also speak of social and environmental upgrading and these two dimensions have started to receive more and more attention. Social upgrading is the process by which employment conditions and wages are improved (Lee & Gereffi, 2015). The term environmental upgrading was introduced by De Marchi et al. (2010) and can be defined as “the process by which economic actors move towards a production system that avoids or reduces the environmental damage from their products, processes or managerial systems” (De Marchi et al., 2010, p. 65). However, literature on social upgrading progressed much faster, leaving environmental upgrading behind as the “most under-investigated area in the GVC literature” (Khattak & Pinto, 2018, p. 12).
Concerning what is written on environmental upgrading, one part of the literature is concerned with classifying different manners in which upgrading can be achieved. For economic upgrading, Humprey and Schmitz (2002) define four types: process upgrading, product upgrading, functional upgrading, and inter-sectoral or chain upgrading. The
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terminology of these types of upgrading mostly refers to the production stage where the upgrading movement is taking place. De Marchi et al. (2012) proved that the classification, which was initially created for economic upgrading, translates well to environmental upgrading. The authors propose an elaborate framework for environmental upgrading strategies, in which they combine Humphrey and Schmitz’s (2002) four types of upgrading with Orsato’s (2009) four types of competitive environmental business strategies. Whereas the different types of upgrading mostly refer to the production stage at which the upgrading takes place, the business strategies of Orsato are concerned with the way in which competitive advantage is achieved. The business strategies are based on the assumption that competitive advantage is obtained either through lower costs compared to the competitor(s) or through differentiation.
Later scholars have added a few additional types of upgrading. For example, skills upgrading whereby the workforce skills are improved. Another type of upgrading is the process of entering in the value chain. Furthermore, end-market upgrading – also referred to as channel upgrading or intra-sectoral upgrading – takes place when a company diversifies to new buyers or new geographic or product markets. Finally, new or improved linkages with companies ‘upstream’ is called supply chain upgrading or backward linkages upgrading (Gereffi & Fernandez-Stark, 2016, p. 12; Morris & Staritz, 2013, p. 244). These newer types of upgrading were all developed in terms of economic upgrading and have not yet been explicitly linked to environmental upgrading.
2.2. Internal and External Drivers of Environmental Upgrading
Apart from conceptualizing environmental upgrading and the creation of frameworks with different types of upgrading, there have been various empirical studies on environmental upgrading. Some examples of case studies are: Achabou, Dekhili and Hamdoun (2017) on olive oil companies, Khattak, Stringer, Benson-Rea and Haworth (2015) on apparel firms and Poulsen, Ponte and Lister (2016) on maritime shipping. Scholars researching environmental upgrading empirically are often interested in its drivers. A commonly made distinction is that between internal and external drivers (Jeppesen & Hansen, 2004; Poulsen et al., 2016). External drivers may be found either outside of the value chain, such as pressure from NGOs and customers, but they may also be characteristics of the value chain itself such as input-output structure, geography, competition in a given industry and transaction costs. Internal drivers on the contrary aim to explain why individual firms may react differently to similar external circumstances. Internal drivers may be the resources of a company, its market size,
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consumer base, brand image, the share of private label products or even the values and beliefs of its chief executive officer (CEO) (Jeppesen & Hansen, 2004).
With regard to external drivers, one of the most researched drivers is value chain governance. This can be defined as: “authority and power relationships that determine how financial, material and human resources are allocated and flow within a chain” (Gereffi & Fernandez-Stark, 2016, p. 97). Value chain governance is often described in terms of buyer-driven and producer-buyer-driven chains. Producer-buyer-driven chains are characterised by powerful producers. The products in these chains typically require technology or capital intensive production, which results in high barriers of entry. An example of a producer-driven chain is the automotive industry. On the contrary, value chains of clothing, footwear or furniture are typically buyer-driven. In these chains, the lead firms are large retailers such as Walmart or brand marketers such as Nike. Applying this distinction to the case of this thesis, the chains of Dutch supermarkets are typically buyer-driven whereby the supermarkets are lead firms. To avoid confusion it is important to note that the term ‘buyer’ here does not refer to consumers, but to firms that operate at the end of the value chain. With the development of GVC
literature more elaborate typologies of governance structures was created. For example, the typology of Gereffi and Fernandez-Stark (2016) which includes five types of governance and ranges from low to high power asymmetry (p. 11). For this thesis it is not relevant to go into more detail about these typologies.
Governance has been one of the most researched drivers of environmental upgrading. Khattak and Pinto (2018) find that “environmental upgrading has been empirically proven to be fundamentally based on relationships and power structures within GVCs” (p. 11). Golini et al. (2018) research which governance structures exactly drive environmental upgrading. They find that environmental upgrading is best supported by buyer-driven (captive) governance, where the lead firm has the power to for example set environmental standards (p. 19). As supermarkets have become giant powers within their value chains, the governance structures in these chains can be assumed as facilitative for environmental upgrading (Burch et al., 2013).
To be able to contribute to the academic debate, it is therefore more useful to look beyond this factor or driver. One specific factor that requires more research is ‘institutional context’. This thesis thus directly responds to the demands of multiple authors (Khattak & Pinto, 2018; Mayer & Pickles, 2011; Sturgeon, 2009), which have been calling for a closer integration of the dimension ‘institutional context’ into value chain analysis.
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2.3. Public Policies on CSR as an External Driver
The institutional context for the purpose of value chain analysis can be defined as “how local, national and international conditions and policies shape […] participation in the value chain” (Gereffi & Fernandez-Stark, 2016, p. 14). An alternative definition given by De Marchi et al. (2012) is: “encompassing not only government and non-government agencies but also the rules that govern society and the economy” (p. 64-65). According to both definitions, the institutional context should be understood quite broadly, referring not only to institutions but also to the economic and social context. To more clearly delineate the concept for the purpose of this master thesis, I have chosen to focus on Dutch governmental policies only. This thesis thus wants to approach these public policies on CSR from a ‘value chain perspective’.
However, since there is little literature on public policies from this particular perspective, it is more useful to look beyond value chain literature for the purpose of this section of the
literature review.
One of the first questions that comes to mind when thinking about this topic is why governments would want to influence something that is voluntary by definition. Steurer (2009) gives five reasons for this. First of all, CSR may help governments to achieve their own policy objectives on a voluntary basis. Knudsen and Brown (2015), for example, find that CSR policies are often related to international competitiveness. Secondly, there may be areas in which hard regulations are politically not desirable or infeasible. The third reason he gives is that governments inevitably define CSR whether they want this or not because “voluntary business contribution […] starts where the legal framework ends” (p. 50). On top of this, influencing CSR is a trend that is part of a broader changing political landscape, involving less hierarchical governance. Finally, CSR changes the roles for both public and private actors and makes distinctions between public and private governance more vague. It therefore also influences (national) governments and it is thus only natural for governments to have an interest in co-defining these new roles (Steurer, 2009, p. 50-51).
Another common topic of study are the policy instruments governments use to be able to influence CSR. These often tend to be more ‘soft’ than traditional governance tools. Fox, Ward and Howard (2002) distinguish four public policy categories: mandating, facilitating, partnering and endorsing. Almatrooshi, Hussain, Ajmal and Tehsin (2018) add a fifth government role: empowering. An alternative classification is given by Zappala (2003) who identifies four public policy options: do nothing, regulation and legislation, non-regulatory activism and best practice demonstration. Prakash and Kollman (2004) proposed five
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disclosures, business-government partnerships and private voluntary codes. Whereas most scholars thus distinguish four or five policy options, Nelson (2004) even suggests 11
mechanisms. Finally, Steurer (2009) develops a framework that is based on a clear separation between the types of policy instruments and their themes. The policy instruments can be: legal, economic, informational or partnering. In addition to that, there are hybrid instruments that are a combination of two or more of these types of tools. With regard to themes, Steurer (2009) identifies four fields of action: raise awareness for CSR, improve disclosure and transparency, facilitate socially responsible investment and lead by example. Steurer’s classification will be used in the remainder of this thesis. The next chapter will explain this choice and will discuss each of the instruments and themes from this framework in more detail.
Finally, some scholars researching the topic have been focusing on comparing the different approaches to public policies on CSR of several (mostly European) countries. To that end, the above mentioned frameworks are often used to classify different types of public policies. Furthermore, Knudsen et al. (2015) propose an additional indicator of the approach to CSR, namely the ministries responsible for CSR promotion. The divisions of tasks between ministries often reflect a government’s priorities. Albareda et al. (2007) argue that differences in approach to CSR policies can mostly be attributed to differences in national norms and values and in the way that a country and its citizens perceive the role of the government and of the welfare state. They propose a ‘four-ideal’ typology model, including the following types: partnership, business in the community, sustainability and citizenship, and agora (Greek for public gathering place or forum) (Albareda et al. 2007, p. 403). In this study, the Netherlands was classified together with Denmark, Finland and Sweden as having a so-called partnership model. Some of the common characteristics of these four countries are the focus on provision of adequate CSR information adhering to transparency principles, and leadership by example (p. 401). Steurer et al. (2012) places the Netherlands among the same group of countries with regard to its socio-economic characteristics and refers to the group as the ‘Scandinavian model’ (p. 215). In addition to that, Steurer et al. extend Albareda et al.’s classification by including a new group of countries in Central and Eastern Europe. Contrary to Albareda et al., Steurer et al. find that there are no significant differences between the three groups of countries in Western Europe. They do however find that there is a highly significant difference between Western Europe on the one hand and Central and Eastern Europe on the other hand. Namely, the latter group of countries is far less active in promoting CSR.
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As a first step this thesis aims to understand the public policy context that is created with regard to ECSR in the Netherlands. To this end it uses the classification of public policies by Steurer (2009). This adds new empirical evidence but is not very innovative per se. As a second step, however, this thesis focusses on the actual influence of the various policy tools. There are only very few scholars who have done that until now (e.g. Beare et al., 2014 on Canadian businesses and Decker, 2016 on Dutch clothing businesses). To my
knowledge this thesis will be the first to do this while linking types of policy instruments to environmental upgrading in value chains.
To conclude, this research will investigate the influence of Dutch public policies on CSR as an unexplored external driver of environmental upgrading. Finally, through
addressing a specific country and sector it adds new empirical evidence to the various academic debates.
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3. Conceptual Framework
The empirical analysis of this thesis could be divided into two parts with regard to the types of reasoning. The first part is deductive in nature. In this part I will be using the framework from Steurer (2009) to assess whether or not the Dutch public policy context with regard to ECSR is facilitative and if it is of high or low regulatory strength. The second part of the research will be based on inductive reasoning. In this part I try to integrate the existing frameworks on public policies on CSR on the one hand and the different types of upgrading on the other hand. The aim is to establish links between the two variables. Given the lack of existing research in that particular field, the second part will be hypothesis-generating rather than hypothesis-testing (Levy, 2008). That means that from the empirical observations of the case study, I aim to generalize beyond the data of the particular case.
This chapter outlines the conceptual framework. It identifies, defines and
operationalizes the variables of this study. The two sections below focus on the definition and operationalisation, firstly, of the independent variable (public policies) and, secondly, of the dependent variable (environmental upgrading).
3.1. Independent Variable: Public Policies
Public policies take the form of policy instruments. Steurer et al. (2012) refer to policy instruments as “tools of governance” (p. 208). The operationalization of these tools will be according to the analytical framework that was developed by Steurer (2009). While there exist many frameworks that could have been used, a lot of which were discussed in the literature review above (e.g. Fox et al., 2002; Zappala, 2003; Nelson, 2004 and Prakash & Kollman, 2004), I have chosen to use the framework that was created by Steurer (2009). I have chosen this framework as it is the most recent framework among the earlier mentioned ones. In addition to that, it is based on the clear separation of themes and instruments. This enables for a more comprehensive assessment of the public policy context.
The framework identifies five types of instruments. Traditionally, policy instruments were described in terms of legal, economic or informational. Steurer (2009) argues that in the field of CSR there is an important fourth tool – partnering – and that in addition to that there exist many tools or institutions that combine several instruments. The latter will be referred to as hybrid tools. The four fields of action that Steurer identifies are: to create awareness for CSR, to improve transparency, to facilitate socially responsible investment, and to lead by
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example (Steurer, 2012). Each instrument can be used within each theme, and within each theme a government could adopt policies according to each of the five instrument types. A matrix may thus be used as a framework to combine the themes and instruments. The only combination that does not exist according to Steurer (2009) are economic tools on leadership by example. After a discussion of each of the available public policies, the final section of chapter 6 summarizes the Dutch policies in such a matrix, followed by a critical discussion of the general environmental Dutch policy with regard to CSR. The two tables below will define and further elaborate on each of the four themes and five instruments.
Raise
awareness, build capacities
As CSR is a voluntary strategy by definition, raising awareness on the importance of CSR or giving examples of CSR practices is a theme that often reoccurs in governmental policies.
Improve disclosure and transparency
Transparency, for example mapping a company’s value chain or reporting on sustainability, is often perceived as one of the first steps towards more socially responsible behaviour. Therefore, the
improvement of disclosure and transparency is also a common theme in governmental policy.
Foster socially responsible investment
Policies fostering socially responsible investment try to encourage that social and environmental considerations play a part in new investments.
Lead by example
A government is leading by example when its own behaviour takes social responsibility into account. Examples of policy tools within this theme are sustainable public procurement or governmental sustainability reports.
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Legal Legal tools can be laws, directives or regulations. Such tools are
judicially binding and are based on the ideas of hierarchy and authority. Economic Economic tools aim to persuade companies to behave responsibly
through financial incentives such as subsidies or taxes.
Informational The predominant aim of tools in this category is to provide information. They are thus based on the power of (moral) persuasion. Examples of informational tools are campaigns, training and websites.
Partnering Partnering tools are tools that bring together public and private actors. Examples of such tools are public-private partnerships, certain
agreements or the creation of networks that bring together public and private actors.
Hybrid This final category was created by Steurer (2009) to include any tool that combines aspects from two or more of the above categories of instruments.
Table 2. Public policy instruments (Steurer, 2009).
When applying the model, one could argue that almost every instrument is hybrid. If, for example, a government website informs companies about the availability of certain subsidies, those subsidies then also contain informational aspects on top of their principle economic aim. To avoid such confusion, the classification in this thesis will be concerned with the
predominant aim of a tool. A tool will thus only be classified as being hybrid if the
characteristics of two or more types of instruments are inseparably linked and equally important.
If the government is making use of its various tools of governance, addressing each of the themes this is expected to be facilitative. If the government is only active in some fields, this will likely be less facilitative. Furthermore, legal tools are likely to have a higher
regulatory strength than pure informational tools. Economic and partnering tools are expected to have medium strength (Knudsen et al., 2015, p. 85). In addition to that, I expect a policy environment to be facilitative if a government uses more precise tools rather than general ones, adapting these tools to the various sectors of the economy and adapting them to ongoing research and development on CSR themes.
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3.2. Dependent Variable: Environmental Upgrading
Environmental upgrading can be defined as: “the process by which economic actors move towards a production system that avoids or reduces the environmental damage from their products, processes or managerial systems” (De Marchi et al., 2010, p. 65). While this thesis’ main focus is on environmental upgrading as can be seen from the overarching research question, the terms ECSR and environmental upgrading will sometimes be used
interchangeably. This is because literature on public policies often speaks of policies on (E)CSR, rather than on environmental upgrading upgrading. Also among the interviewees (E)CSR is a more commonly used term. The difference between the two terms used to be that CSR is voluntary by definition while environmental upgrading is not. However, the concept of CSR seems to have evolved over time and it is now increasingly perceived as embedded in social and political contexts (Knudsen et al., 2015, p. 82).
To operationalize environmental upgrading, this thesis uses the four types of upgrading as they were traditionally identified by Humphrey and Schmitz (2002).
Whilst these types of upgrading were initially created to explain economic upgrading, De Marchi et al. (2012) proved that they also travel well to environmental upgrading. I
considered including additional types of upgrading that were defined more recently. However, this was not possible within the scope of this thesis especially because they have not yet been linked to environmental upgrading (only economic upgrading). I also considered using the framework that combines the four types of upgrading with Orsato’s four business strategies. While this framework is very useful to understand the rationales behind upgrading it is not relevant for answering the particular research question of this thesis.
The table below defines the four types of upgrading in terms of reducing
environmental impact. This will be used to interpret and classify the environmental strategies of the Dutch supermarkets.
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Product upgrading To move into new product lines with a lower environmental impact (e.g. introduction of meat substitutes) or to alter the existing product to reduce its environmental impact (e.g. reduce packaging). Inter-sectoral or chain upgrading To enter into a new value chain or industry which has
a lower environmental impact. This requires radical changes which do not occur in the case study. Process upgrading To transform inputs into outputs using more
environmental friendly production processes. This may include energy management of shops and distribution and delivery.
Functional upgrading To perform new activities, acquire new functions or abandon existing functions to reduce environmental impact. New functions adopted by supermarkets may be campaigning to inform consumers and donating food.
Table 3. Four types of environmental upgrading.
Relating this back to the research question, since the public policies are aimed at promoting ECSR it is expected that they have at least some facilitative effect. If this appears to be true, the aim is to make more specific links between the dependent and independent variables. Ideally, this thesis generates new hypotheses on linkages between the different types of environmental upgrading and types of public policy tools.
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4. Methodology
This chapter will be structured in the following order: section 4.1 outlines the broader
research approach, section 4.2 justifies the case selection and explains what the choice for an extreme case implies for the generalisability of the final results, section 4.3 explain how data was collected, and finally section 4.4 discusses issues of validity, reliability and replicability.
4.1. Research Design
The method of this thesis will be a qualitative single case study analysis, whereby the Dutch supermarket sector is the unit of analysis. As was explained in the previous chapter, the empirical analysis uses a deductive reasoning at the beginning. As the research continues towards the end of chapter 7, the reasoning will change to have a more inductive nature. This is because there is no previous research that explicitly connects environmental upgrading with public policies on CSR. That means that in order to answer the research question it is
necessary to generate new theory from empirical facts, rather than testing existing theory and hypotheses as would be the case for a study that is completely deductive in nature. The type of case study can accordingly be classified as hypothesis-generating as it aims to generalize beyond the empirical data of the selected case.
4.2. Case Selection
The single case that this research aims to investigate empirically is the Dutch food retail sector. Whilst a comparison between multiple cases makes it easier to draw general
conclusions and generate theories that are applicable to a wider set of examples, a single case allows for a more in-depth study. For the purpose of investigating the chosen topic, I deemed that a single case study is a better choice. The case is already quite complex, including a large amount of different public policies, several different supermarkets, each with a distinctive approach to ECSR and different types of environmental upgrading. Due to this complexity it would simply not be feasible to cover more than one case within the limits of a master thesis. In the remainder of this section, I will explain the choice for the particular case. First of all, why the Netherlands has been chosen and, secondly, the reasons behind the choice for the supermarket sector. Finally, this section explains what implications these choices might have for the generalisability of the research outcomes.
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First of all, the Netherlands creates an interesting environment for CSR.
Internationally, the country’s government has been taking the lead with regards to CSR promotion. It is a country that traditionally values private-public collaboration and where many certification schemes have originated, such as Max Havelaar and UTZ Certified
(Vermeulen & Kok, 2012, p. 186). In 2009, Dutch businesses were ranked among the top five European countries with regard to CSR and transparency in sustainability reporting (Fransen & De Winter, 2015, p 18).
With regards to selecting a particular economic sector, supermarkets make a very interesting case. In the last few decades, global food supply chains have been substantially restructured. In the 1970s, it was expected that large food manufactures such as Heinz, Nestle and Unilever would become the most powerful actors in the food sector. Contrary to these expectations, however, supermarkets have now become the lead firms in their global value chains (Burch et al., 2013; Fuchs et al., 2009). In the Netherlands, the power asymmetry between supermarkets and their suppliers is reinforced by the fact that only a few
supermarkets in the country hold virtually all market share. This power asymmetry makes the food sector a very interesting subject of study from the perspective of value chain analysis as it places supermarkets in a very powerful position as lead firms. Buyer-driven value chain asymmetries have proved to create a facilitative environmental for environmental upgrading (Golini et al., 2018, p. 19). In addition to that, the food sector supplies a basic human need and usually constitutes a large part of a country’s gross domestic product. More than half of the food and drink that is consumed in the Netherlands is sold by supermarkets (Oxfam Novib, 2018). This thus makes supermarkets the lead firms in a large and influential sector. Moreover, this makes it likely that the government has a large interest in the sector as well. Finally, studying environmental upgrading would only make sense if there actually exist considerable environmental issues connected to a sector’s production activities. With regard to the food sector there are considerable issues. Some examples are: manure disposal, soil and water damage, chemicals, deforestation, global warming from methane, waste disposal, packaging and food miles (KPMG, 2014; Maloni & Brown, 2006, p. 41). Chapter 5 will go into more detail about these challenges. Apart from environmental concerns, CSR in the food industry commonly includes animal welfare, fair trade, labour and human rights and health and safety. Because of these challenges, CSR policy is perceived as an integral element of core business of (British) supermarkets (Jones, Comfort, Hillier & Eastwood, 2005). Also in the Netherlands, the food sector has been identified as one of the CSR priority sectors in a Sector Risk Analysis carried out by the Dutch government (KMPG, 2014). This, together with
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the fact that the Netherlands is a leading country with regard to CSR, leads to the expectation that the Dutch government will be considerably involved in promoting CSR in this particular sector.
To conclude, the Dutch supermarket sector is selected as an extreme case or crucial case in which the highest outcome may be expected (Levy, 2008). One the one hand, studying a crucial case can be very interesting because of the expected extreme outcome. On the other hand, however, the choice for an extreme case negatively influences the generalizability or applicability of the findings to other cases, such as different countries and sectors. This should be kept in mind throughout the thesis, in particular towards the end where conclusions are made.
4.3. Data Collection
The data sources which were used for this research are a mix of primary and secondary data. Primary data was collected through interviews, supermarket’s sustainability reports, which are in some cases incorporated in the annual reports, and publications on CSR promotion by the Dutch government and several public and semi-public institutions such as CSR Netherlands and the Netherlands Enterprise Agency. These primary sources will be supplemented by secondary data in order to help interpret the findings. In addition to that, secondary data provides the frameworks that are being used to classify different public policies and types of environmental upgrading. The remainder of this section gives more details about the
collection of primary data.
With regard to the interviews, I reached out to CSR managers or CSR specialists of several Dutch supermarkets and managed to get in touch with most of them. Furthermore, I spoke with the director of the branch organisation Dutch Central Office for Food Trade (CBL). As this research is based on the assumption that supermarkets are lead firms in their value chains which relatively have a lot of power over their suppliers, I have chosen to only contact the five leading Dutch supermarkets which are: Albert Heijn (35,3 % of the market share), Jumbo (18, 7%), Lidl (10,5 %), ALDI (6,7 %) and PLUS (6,4 %) (Oxfam Novib, 2018). Together these five supermarkets hold more than three quarters of the market. In the remainder of this thesis, ‘the supermarkets’ will be used to refer to these five supermarkets. The appendix to this thesis contains a table with the names of the interviewees, their position in the company that they worked for and the type of contact (interview, telephone interview or email correspondence). The content of the interviews mainly revolved around two topics. First of all, whether or not the company is aware of and uses certain policy instruments.
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Secondly, if the interviewee thinks Dutch public policy influences their company’s CSR strategy. The length of each of the (telephone) interviews was approximately 20 to 30 minutes.
A second source of primary data consists of sustainability reports and other types of relevant publications of the selected five supermarkets. This thesis’ research question is concerned with the current situation of governmental influence. Important to note with regard to sustainability reports is that not every supermarket publishes this annually and a few supermarkets still have to publish their annual/sustainability report for 2018. Therefore, it is not possible to focus only on the reports for 2018. For that reason and also to ensure that the analysis reflects the broader picture rather than a summary of initiatives from one specific year, I will analyse the reports from 2016, 2017 and 2018. This means that the amount of data available per supermarket may differ. Sometimes, I may use more examples from one
supermarket than from others. However, it is good to note that the aim of this thesis is not to compare the supermarkets. Rather, the aim is to understand how the leading supermarkets in
general perceive and respond to the influence of the Dutch public policy context.
A third source of primary data consists of publications on the policy tools that are currently in place. This includes any law, information, subsidies and financial programmes or partnerships and agreements that are in place or available to supermarkets with as their
purpose to facilitate, promote or influence ECSR. This information is predominantly available on the websites of the Dutch government, the Netherlands Enterprise Agency and CSR
Netherlands. This type of data source will not be analysed using any systematic approach and thus does not require further explanation.
4.4. Validity, Reliability and Replicability
Finally, this section concludes the chapter by reflecting on possible pitfalls of the chosen research design and the data collection methods. It may also touch upon several limitations that were encountered. However, these will be further elaborated in chapter 9 on ‘Limitations and Possibilities for Further Research’.
Due to the nature of the concepts that are studied, operationalisation is challenging and inevitably subject to the interpretation from the researcher. In addition to that, not all
information is publicly available nor are interviewees always willing to disclose information. I was pleased, however, with the high rate of response that I received on my requests for
interviews. Furthermore, data validity which concerns whether the collected information is actually reliable and correct, tends to be typically problematic for interviews. In the case of
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this research, this may also be of concern for the sustainability reports of the supermarkets. Both sources tend to be biased as the interviewees as well as the writers of these reports will likely want to reflect positively on the company that they are working for. For example, supermarkets may be more likely to say that they are engaging in ECSR for philanthropic reasons rather than that they are being ‘pressured’ in a certain direction by governmental policies. A common coping strategy to ensure higher data validity is the use of different data sources, a strategy that is called data triangulation (Hancké, 2009). Despite having collected data from various types of sources, this is an issue that cannot be solved entirely. In the process of making conclusions, this will be taken into account.
A second pitfall might be reliability. Ideally, when applying the exact same procedures for measuring something one should end up with the same results every time (Hancké, 2009). Reliability is particularly problematic for interviews. It is just not in human’s nature to give exactly the same answer when asked about something twice, even the questions are identical. The sustainability reports and governmental publications on their policies are more reliable in nature. However, as data comes from a variety of different sources comparison is complex. Note also that when the same research might be conducted in a few years, the policy environment as well as the strategies for environmental upgrading have likely changed. Thirdly, in order to achieve high replicability it is crucial to explain how data are translated into conclusions. This enables others to replicate the research. I tried to do this as clearly as possible. For example, by including detailed tables supporting the
operationalization of the research variables. It will become clear in chapters 6 and 7 that it can be quite difficult to classify policy instruments and environmental upgrading types using frameworks. Often classification is a matter of interpretation. This is why I described the characteristics that I took into account and the alternative considerations that played a role in the categorising process. Furthermore, replicability was increased by adding a list of
interviewees to this thesis, which can be found in the appendix. The interview questions were not included as they interviews were open and semi-structured in nature. The previous section on data collection did, however, include a rough indication of the topics that were covered during the interviews.
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5. Environmental Challenges in the Food Sector
Before beginning to answer each to the sub-questions in the subsequent three empirical chapters the topic requires some background information with regard to the environmental challenges. This chapter discusses such challenges in the food, agribusiness and supermarket sectors. Supermarkets are often considered to belong to the broader food sector or the food and agribusiness sector. While it might be most precise to speak of challenges in the supermarket sector this would only create a partial understanding of the problem.
Supermarkets have been chosen as the topic of study precisely because they are powerful actors that may impact operations beyond their direct influence. They do not only have the power to decrease the environmental impact of their own activities but may also use their power to require certain standards from suppliers upstream the food sector. This chapter describes which challenges there are in the food sector in order to gain a better understanding of what challenges ECSR aims to address and to explain why ECSR is relevant in the food sector to begin with.
The Sector Risk Analysis that was written for the Dutch government identifies the following environmental problems in the food sector: emission of greenhouse gases, water scarcity due to the production of agricultural commodities and production of food, water pollution due to the use of pesticides, loss of biodiversity, soil pollution and soil exhaustion due to agricultural production, animal welfare, exhaustion of wild fish stocks, and food waste (KPMG, 2014). When making the distinction between social and environmental issues, such as the Sector Risk Analysis does, animal welfare is often assigned to the category of
environmental issues. However, an increase in animal welfare does often not imply a lower impact on the environment in a strict sense. Therefore, it does not fit within the meaning of environmental upgrading as this was defined earlier. This thesis will thus not include CSR initiatives that improve animal welfare. Some other examples of environmental problems in the sector which were not included in the Sector Risk Analysis are: deforestation, packaging and food miles (Maloni & Brown, 2006, p. 41). The latter refers to environmental damage caused by transportation of food. Finally, there are environmental challenges connected to the operation of supermarket shops, distribution centres and offices: waste management, heating of the building, cooling systems and lighting. Furthermore, supermarkets are able to influence emissions of greenhouse gasses by promoting vegetarian and vegan food and seasonal
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products. Finally, supermarkets can use communication to the customer as a tool to address issues such as food waste and recycling at home.
Note that some challenges that supermarkets are able to influence directly – such as packaging, food miles, energy management, and vegan and vegetarian product range – were not included in the Risk Sector Analysis. I think the reason for that was that at the time of writing, the report was not directed towards supermarkets. The report defines the food sector as: processing meat, fish and agricultural raw materials, and the production of food and drinks. The subsequent international corporate social responsibility (ICSR) Covenant on Food explicitly includes supermarkets in the food sector as well.
I also find it important to note that, CSR in the food industry commonly includes issues of fair trade, labour and human rights, and health and safety in addition to
environmental issues. These issues are not the focus of this thesis. However, the existence of a broad range of social and environmental issues, is likely to create an environment where CSR is perceived as an integral element of business. This is illustrated by the fact that all
supermarkets have written sustainability reports, most of them on an annual basis. Finally, social and environmental challenges are often interconnected. Many certification labels that focus on fair wages abroad or on animal welfare combine this with requiring environmental standards that are higher than what is required by law. To conclude, the existence of social, environmental and animal welfare issues is thus likely to create an environment in which CSR proliferates.
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6. Public Policies on CSR
This chapter aims to answer the first sub-question: which Dutch public policy tools on
environmental corporate social responsibility are in place with regard to supermarkets?
Before beginning to discuss the various tools that are in place, however, it is useful to become familiar with the public actors that are responsible for CSR promotion in the Netherlands. This is what this chapter’s first section aims to do. Thereafter, various policy tools will be identified and classified using the framework from Steurer (2009). The sections of this
chapter will be structured accordingly. That will say: section 6.2 will cover legal tools, section 6.3 covers economic tools, section 6.4 covers informational tools, section 6.5 covers
partnering tools and section 6.6 covers hybrid tools. The final section of this chapter provides an overview of the Dutch policy instruments that were discussed and it critically reflects on the more general environment that is created by these instruments. It aims to assess in how far the public policy environment is facilitative of ECSR.
6.1. Public Actors
Within the Dutch government, the two ministries that are mainly responsible for CSR promotion are the Ministry of Economic Affairs and Climate Policy and the Ministry of Foreign Affairs. The Dutch government often makes the distinction between CSR that takes place within national boarders, for which the former ministry is responsible, and ICSR, for which the latter is responsible (Government of the Netherlands, n.d.-a). As CSR is a very broad policy field that touches upon issues in almost every sector, other ministries may occasionally be involved as well. For example, the Ministry of Agriculture, Nature and Food Quality supports several partnering tools on ECSR.
On top of this, there are a few organizations that (partially) operate under the auspice of the Dutch government and play a key role in CSR promotion. The first of these
organisations is the Netherlands Enterprise Agency. Its purpose is to support Dutch entrepreneurs in a very broad sense. Within the domain of CSR, the organisation provides information and it is entrusted with the execution of governmental subsidies and financial programmes. The second organization, CSR Netherlands, was created in 2004 by the Dutch Ministry of Economic Affairs. It is the Dutch knowledge centre and network organisation when it comes to CSR. When it was created, CSR Netherlands was completely financed by the Dutch government. Over the years it has become an independent foundation and it now
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receives only project-based public funding. Thirdly, the Dutch Public Procurement Expertise Centre (PIANOo) provides information about sustainable public procurement. Finally, it is important to mention the Sustainable Trade Initiative (IDH), which was founded in 2008 as part of the legal entity CSR Netherlands. Since 2011, the organisation is independent from CSR Netherlands. It is financed through donations from the Dutch government as well as from some other governments (Denmark, Norway and Switzerland) and its main function is to convene public and private actors.
6.2. Legal Policy Tools
The use of legal instruments might often be the first thing that comes to mind when thinking of tools of governance. Legal instruments make use of a government’s law-making capacities and are based on traditional hierarchy. However, there are two problems with the use of legal policy tools for promoting ECSR. Firstly, they are often not preferred in the field of CSR promotion where tools are commonly more ‘soft’ than traditional governance. The second problem is that “as soon as government coercion drives a corporate act, it ceases to be CSR” (Dentchev, Van Balen & Haezendonck, 2015, p. 380). Or the other way around: “voluntary business contribution […] starts where the legal framework ends” (Steurer, 2009, p. 50). Whereas the definition of CSR has been changing over time, leaving out the fact that it is voluntary per se, and thus accounting for the fact that it is embedded in social and political context. Despite this change in definition, this research will not include legal tools that create an obligation and create sanctions for non-compliance. The influence of such tools on
supermarkets – compliance with the obligation – is self-evident and is thus not an interesting or relevant research finding. Rather, this section aims to discuss legal tools that indirectly promote CSR. As a consequence of using this criterion, however, there are no legal policy tools aimed at promoting ECSR among supermarkets. The remainder of this chapter discusses types of tools that were considered covering the four themes: raising awareness, improving transparency, fostering socially responsible investment (SRI) and leading by example.
Firstly, legal tools aimed at creating awareness may include laws that indicate a commitment to CSR. While the Dutch government expresses its preference for the use of the internationally recognized Guidelines on CSR from the Organization for Economic
Cooperation and Development (OECD), it does not commit to these guidelines in any legal way (Ondernemersplein, 2018). Secondly, legal tools aimed at improving transparency, for example through requiring environmental reporting, only exist in the Netherlands for certain highly polluting industries. This is not applicable to the supermarket sector. Thirdly, using the
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combination of legal tools and the theme fostering socially responsible investment, the
government has recently adopted a law that obliges companies operating in the Netherlands to draw up a declaration that states that the company makes an effort to prevent child labour (Eerste Kamer, 2019). Similar laws do not (yet) exist with the aim of reducing environmental impact. Finally, a legally binding commitment to socially responsible investment by
governmental bodies, could be leading by example. An example of such a tool could be the Manifest Socially Responsible Public Procurement (Manifest MVI). However, this manifest is not legally enforceable and will therefore be discussed as an informational tool.
6.3. Economic Policy Tools
In the Netherlands, there are a lot of economic policy tools aimed at promoting CSR. They are available in the form of subsidies, taxes and funds. Some of these financial incentives are only available to certain sectors, can only be applied for in certain provinces or are only for small and medium enterprises up to a certain size. This section only discusses the relevant subsidies and financial programmes for this thesis’ research. All tools discussed in this section have as their thematic field of action the facilitation of socially responsible investment. There are no economic tools in place that aim to at creating awareness or improving transparency.
Economic tools on leading by example, is a combination that does not exist (Steurer, 2009). Firstly, there are several fiscal benefits. Among this category there are: the Energy Investment Allowance (EIA), the Environmental Investment Rebate (MIA) and the Arbitrary depreciation of environmental investments (Vamil). The Energy List and Environment List sum up all investments for which the EIA and MIA/Vamil respectively may offer fiscal benefits. These lists can be found on the website of the Netherlands Enterprise Agency. The lists are annually updated which, for example, based on new information or technologies. Some examples of investments that are on the lists are: LED lighting (EIA), humidification equipment for fresh food and laser equipment to label vegetables, fruit and potatoes
(MIA/Vamil). The latter two systems both make it possible to reduce packaging. An example of a recent change, is that certain investments against food waste have been included on the Energy List for MIA/Vamil since 2019 (Netherlands Enterprise Agency, n.d.-a).
Secondly, there are several subsidies. Firstly, there is the Stimulation of Sustainable Energy Production (SDE+) which can, for example, be applied to for investments in solar panels. Another, relatively new, subsidy is Demonstration Regulation Climate Technology and Innovation in Transport (DKTI-Transport). It offers funds aimed at accelerating the production of transport solutions with low CO2 emissions from 2017 to 2021. This subsidy
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can for example be used to launch pilots with electric trucks (Netherlands Enterprise Agency, n.d.-c).
A third type of economic policy tool is tax. An example of a tax that promotes CSR is the Packaging Waste Management Contribution (PWMC). Every company that imports goods that are packaged, whereby the packaging material amounts to more than 50,000 kilo per year, needs to pay this contribution. The contribution is lower if the packaging materials are more environmentally friendly or if they are reusable. Therefore, the tool aims to stimulate
companies, among which supermarkets, to make investments in more environmentally friendly packaging.
Finally, the government occasionally finances small projects. An example of this is the pilot system that was set up by Albert Heijn whereby the packages of pig meat contained QR codes. Scanning this code, revealed the origin of the meat, thereby creating a more transparent value chain. This project was set up with financial support from the Dutch government
(Government of the Netherlands, 2016). As this is a small project that only affected one supermarket, it will not be included in the remainder of this thesis.
6.4. Informational Policy Tools
In the Netherlands, a lot of informational policy tools are in place covering each of the four thematic fields. This section will be structured into four sub-sections according to these themes.
6.4.1. Informational Policy Tools: Raise Awareness
Firstly, information that aims to increase awareness can be found on several websites:
websites of the Dutch government, CSR Netherlands, the Netherlands Enterprise Agency and on business.gov.nl (Ondernemersplein), a website that was created by the government to provide information to businesses.
Information that aims to create awareness can also be found in reports, such as the Sector Risk Analysis, and policy letters such as CSR Pays Off. The Sector Risk Analysis – which was announced in the policy letter ‘CSR pays off’ – was carried out for the Dutch government and identified CSR risks per sector. Consequently, it labelled certain sectors as priority sectors, among which the food sector (KMPG, 2014). Moreover, this analysis formed the basis for negotiations on several sector-wide covenants. Within the food sector, such a covenant was signed in 2018. This covenant will be discussed in more detail in the section on partnering policy tools (section 6.5.2).
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Thirdly, informational tools aimed at increasing awareness on CSR can be found in the form of online tools created by CSR Netherlands. Three tools that were created for (or
adapted to) the food & agribusiness sector specifically are: the CSR Risk Check, the Waste Check and CSR Steps for Food & Agribusiness. The CSR Risk Check aims to help companies to adhere to principles of due diligence. “Due diligence means that companies are expected to identify the risks their business activities bring with them and to determine how to address those risks” (Netherlands Enterprise Agency, n.d.-d). In addition to these three online tools for food and agribusiness there are many other tools that apply across sectors. For example: the CO2 Calculator, the Energy Scan, the Plastic Scan and the Circularity Check. There are also tools that are only accessible to (network) partners of CSR Netherlands, which is a system that will be explained in the section on partnering tools (CSR Netherlands, n.d.-a).
A fourth type of informational tool increasing awareness are the OECD guidelines. While the guidelines themselves are not a Dutch policy tool, the Dutch government does communicate on the Guidelines and the Ministry of Economic Affairs and Climate Policy1 has published a Dutch translation.
6.4.2. Informational Policy Tools: Improve Transparency
Among the online tools from CSR Netherlands as discussed above, there are also roadmaps and real life examples of sustainability reporting (CSR Netherlands, n.d.-a). These are thus informational tools aimed at improving transparency.
Another tool within this theme is the Transparency Benchmark. This is an annual ranking on the level of transparency of several large companies. The winner is awarded with the ‘Cristal’ prize. The Transparency Benchmark aims to provide information on the
companies in the ranking, it also informs about certain trends that are visible in the different sectors and its main theme is to improve transparency (Ministerie van Economische Zaken en Klimaat, 2018). Rankings affect a companies’ reputation and might therefore be alternatively classified as a hybrid tool combining informational and economic aspects. It seems unlikely to me that this particular ranking has any significant influence on sales through reputation and thus I argue that the informational aspects are dominant over the potential economic aspect.
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An informational instrument promoting socially responsible investment (SRI) can be found on the website of the Netherlands Enterprise Agency. Their ‘subsidies and financial
programmes’ page offers a search tool, which is referred to as ‘subsidy tool’, that administers all subsidies and programmes on behalf of various Dutch ministries and the European Union (Netherlands Enterprise Agency, n.d.-e).
6.4.4. Informational Policy Tools: Lead by Example
Within the final theme – leadership by example – informational tools consist of information on socially responsible public procurement. This can be found on the websites of the
government and PIANOo and in the Manifest Socially Responsible Public Procurement (Manifest MVI). In this manifest, several governmental bodies, provinces and municipalities voluntarily agree to set goals for sustainable public procurement. As was mentioned earlier, the manifest is not binding which is why it has been classified as an informational tool rather than a legal tool.
6.5. Partnering Policy Tools
Partnering policy tools are set up when public and private actors have a shared objective which is best achieved through cooperation. It enables for the exchange of information and other resources and it avoids conventional regulation. Partnering tools may include public-private partnerships, stakeholder forums or negotiated agreements (Steurer, 2009, p. 57). Because there are quite a lot of tools that will be discussed in this section, I decided to make four subsections, categorising the tools according to theme. Note that unlike the previous section themes in partnering tools often overlap. This is why the following four sub-sections were created: raise awareness and improve transparency; improve transparency and foster SRI; foster SRI; and lead by example.
6.5.1. Partnering Policy Tools: Raise Awareness and Improve Transparency
Firstly, IDH creates a stakeholder forum that brings together public and private actors. According to its website, the organization’s primary goals are: convening, co-funding, and learning and innovating. This thus means that the organisation’s work also includes economic and informational aspects. However, the predominant aim of the organization is partnering and creating a forum. The thematic fields of action linked to IDH are awareness on CSR and
