production in Vietnam
Master thesis International Development Studies
Graduate School of Social Sciences, University of Amsterdam
August 17, 2020
Wordcount: 24.967
BSc. Ms. Kasja A.D. Oostindie
Student number: 12582026, E-mail:
kasjaoostindie@gmail.com
Supervisor: Dr. Dhr. Dennis L. Arnold
Second reader: Dr. Dhr. Niels P.C. Beerepoot
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Abstract
Clothing production results in environmental degradation in manufacturing countries and has a large impact on climate change. Apparel brands and retailers are held responsible for their environmental footprint and implement Corporate Environmental Responsibility activities to mitigate the environmental impact resulting from textile and apparel production. Much research has been conducted into Corporate Social Responsibility and social outcomes in the apparel value chain but concerning environmental outcomes research remains limited. This study takes a Global Value Chain approach to explore how Corporate Environmental Responsibility activities of leading apparel brands and retailers affect Environmental Upgrading of 1st and 2nd tier suppliers in Vietnam. Data for this research was collected through semi-structured interviews with buyers, suppliers and stakeholders, and document analysis. This study finds that lead firms engage in the following Corporate Environmental Responsibility activities: compliance-auditing, guiding continuous improvement, responsible purchasing and supplier capacity development. Compliance-auditing is a key driver of Environmental Upgrading. Supplier capacity development programs enhance human
resources and technical knowledge required for Environmental Upgrading but only target the brand’s strategic suppliers. Corporate Environmental Responsibility is not integrated (yet) into price: buyers seem unwilling to pay a higher price for process sustainability. This is better referred to as irresponsible purchasing. ‘Continuous improvement’ entails the implementation of the Higg Facility Environmental Module to guide continuous
improvement of the environmental performance of the brand’s suppliers. Economic benefits derived from environmental upgrading for suppliers remain limited to cost savings. This study concludes that lead firm’ Corporate Environmental Responsibility drives environmental sustainability in the textile and apparel industry in Vietnam and supports strategic suppliers in Environmental Upgrading. Lead firms take an important role in driving environmental
sustainability in the presence of a weak environmental state. However, the unwillingness of buyers to pay for process sustainability and the limited economic benefits derived from Environmental Upgrading, limit Environmental Upgrading opportunities.
Key words: Corporate Social Responsibility (CSR), Corporate Environmental Responsibility (CER), Environmental Upgrading (EnvU), Textile and Apparel Industry, Global Value Chain (GVC), Lead Firm Governance
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Acknowledgements
I would like to thank all my colleagues at IDH Vietnam for the assistance I received in conducting this research, with special thanks to Viet Hoang, Sibbe Krol and Mai Anh Nguyen for making this research happen. I would also like to sincerely thank Minh Hoàng, my colleague who translated for me during interviews and who was my companion within the organization. I would like to thank Anh Hoang and Nga Phan from VITAS for the provided assistance in this research. I would like to thank everyone who participated in this research, I smile back at the nice conversations, and all the insights I was able to gather and write down in this study. I am grateful for the help of my uncle Henk Dekker, who proofread my thesis and provided me with the feedback I needed to complete the thesis. I would like to thank my supervisor Dennis Arnold for supporting me in the writing and research process and my second reader Niels Beerepoot for assessing the thesis. I am thankful for Beth and Bianca, for writing our theses together and for being there during COVID-19 lockdown, making the most out of these weird last months of our University experience. Last but not least, I’d like to thank my family and friends and in particular Max, to keep supporting me at all times.
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Contents
Abstract ... 2 Acknowledgements ... 3 Contents ... 4 List of abbreviations ... 7 List of figures ... 8 List of tables ... 8 1. Introduction ... 9 1.1 Research objectives ... 13 1.2 Research questions ... 14 1.3 Thesis setup ... 14 2. Theoretical Framework ... 15 2.1 Governance in GVCs ... 15 2.1.1 Upgrading ... 17 2.1.2 Standard setting ... 192.1.3 Private, non-governmental and public governance ... 20
2.2 Corporate Environmental Responsibility ... 21
2.2.1 Effectiveness of CSR ... 22
2.2.2 Private governance of environmental outcomes ... 23
2.3 Environmental Upgrading ... 25
2.4 Conceptual scheme ... 27
3. Methodology ... 29
3.1 Ontology and epistemology ... 29
3.2 Operationalization ... 29 3.3 Unit of analysis ... 30 3.4 Research design ... 30 3.4.1 Semi-structured interviews ... 31 3.4.2 Document analysis ... 31 3.5 Sampling ... 32 3.6 Data analysis ... 34 3.7 Methodological reflection ... 34 3.8 Ethical reflection ... 36 4. Research context ... 38 4.1 Vietnam ... 38 4.1.1 Economic development ... 38 4.1.2 Environmental degradation ... 39
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4.1.3 Climate change and action ... 40
4.1.4 The Environmental State... 41
4.2 The Textile and Apparel Industry ... 43
4.2.1 Sustainable industry development ... 44
5. Corporate Environmental Responsibility ... 46
5.1 Sustainability strategies ... 46
5.2 Compliance-auditing ... 48
5.2.1 CoCs and national regulation ... 48
5.2.1 Bargaining power ... 50
5.2.2 Standard divergence ... 51
5.2.3 Auditing of tier 2 ... 52
5.3 Continuous improvement ... 53
5.3.1 The Higg FEM ... 54
5.3.2 Adoption of Higg FEM ... 56
5.4 Responsible purchasing ... 57
5.5 Supplier capacity development programs ... 60
5.6 Conclusion ... 62 6. Environmental Upgrading ... 65 6.1 Upgrading practices ... 65 6.1.1 Types of upgrading ... 65 6.1.2 Funding ... 68 6.1.3 Benefits ... 68 6.2 Challenges ... 70
6.2.1 Lack of financial resources ... 70
6.2.2 Low environmental awareness ... 70
6.3 Drivers and resources ... 71
6.3.1 Extrinsic vs. intrinsic drivers ... 71
6.3.2 Learning mechanisms ... 73 6.3.3 Horizontal networks ... 74 6.4 Conclusion ... 75 7. Conclusions ... 78 7.1 Findings... 78 7.2 Theoretical reflection ... 81
7.3 Suggestions for future research ... 83
7.4 Policy Recommendations... 85
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Appendix 1: Operationalization table ... 92
Appendix 2: Interview Guide... 94
1. Interview Guide Supplier ... 94
2. Interview Guide Stakeholder ... 97
Appendix 3: Research participants ... 99
Appendix 4: Implementation of Higg FEM ... 100
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List of abbreviations
BCI – Better Cotton Initiative
CER – Corporate Environmental Responsibility CoC – Code of Conduct
CSR – Corporate Social Responsibility
DONRE – Department of Natural Resources and Environment EIA – Environmental Impact Assessment
EnvU – Environmental Upgrading FDI – Foreign Direct Investment FTA – Free Trade Agreement GVC – Global Value Chain
IDH – (Initiatief Duurzame Handel) The Sustainable Trade Initiative IFC – International Financial Corporation
Higg FEM – Higg Facility Environmental Module MNC – Multinational Corporation
MO – Mill Optimization program
MONRE – Ministry of Natural Resources and Environment MSI – Multi-Stakeholder Initiative
NDC – Nationally Determined Contributions NGO – Non-Governmental Organization SAC – Sustainable Apparel Coalition SME – Small and Medium Enterprises SOE – State Owned Enterprises
VCCI – Vietnam Chamber of Commerce VIP – Vietnam Improvement Program
VITAS – Vietnam Textile and Apparel Industry Association WWTP – Wastewater Treatment Plant
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List of figures
Figure 1. Figure 1 Five global value chain governance types 16 Figure 2. The smile-curve describes the distribution of value added of
different production activities
18 Figure 3. Conceptualization of the relation between the dependent and
independent variable
28 Figure 4. GDP (current US$) – Vietnam. World Bank data 38 Figure 5. Visual representation of environmental institutions in Vietnam 42 Figure 6. The textile and garment enterprise distribution 43 Figure 7. Visual representation of the relations between CER activities
and EnvU dimensions
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List of tables
Table 1. List of brands & retailers included in the sample for document analysis
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Table 2. Research participants 33
Table 3. Brands and retailers use different categorizations, this table provides an overview of the most cited environmental practices
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1. Introduction
Environmental sustainability in the apparel industry received increased attention since the last decade. The apparel industry has been under public scrutiny for its inhumane working conditions since the 1980s already, but environmental issues so far received little attention in comparison. It is predicted that the apparel industry is responsible for 8 – 10% of the world’s greenhouse gas emissions and that 20% of the world’s industrial wastewater comes from textile and apparel production (UN, 2020). From the harvesting of natural fibres and creation of man-made ones to the spinning of yarns, weaving and dyeing of textiles, sewing of
garments, to distribution and retail, and even the consumer phase and after-product life; every stage in the apparel value chain impacts the environment (Ellen MacArthur Foundation, 2017). Most clothes are consumed in Western markets, but the effects of environmental degradation are felt the most in developing countries were apparel is produced (Sajn, 2019). Clothing consumption has nearly doubled over the last 15 years (MacArthur, 2017), and it is projected that until 2030 global apparel consumption rises by 63%, which resembles a total of 102 million tons of textiles (EAC, 2019). The increasing demand because of a rising global middle class is a significant threat to environmental sustainability, given the linear way in which the apparel value chain is organized (Ellen MacArthur Foundation, 2017).
The apparel value chain – this includes all types of clothing from conventional to outdoor to ‘fast fashion’ – is complex and geographically dispersed. In the 1980s,
Multinational Corporations (MNCs) increased their focus on specialization and started outsourcing non-core production activities to developing countries to lower production costs (Appelbaum & Lichtenstein, 2017), which created the dispersed production networks we see today. Production relations are transcending national boundaries, and nation-states are unable to govern the impact of production abroad created by MNCs. This initially left a governance void which showed from lingering social and environmental issues as a result of production activities in developing countries (Ibid.). Before 2000, this resulted predominantly in the adoption of Codes of Conduct (CoCs) by MNCs to fill the void and manage outcomes through private governance. While private governance is still the hegemonic force, different global actors from private, public, and civil society spheres, are now concerned with
governing production outcomes, and contest MNC-governance by exerting power to
influence global standard-setting (Dallas, Ponte, & Sturgeon, 2019; Palpacuer & Bair, 2015). Over the years this has resulted in the domination of Multi-Stakeholder Initiatives (MSIs) in
10 global standard-setting, through which leading apparel brands exert their power, but which in return also influence brands in their strategies (Ponte, 2020).
Environmental sustainability was initially viewed by corporations as a risk and only integrated into their Corporate Social Responsibility (CSR) policies as a reaction to civil society pressure (de Brito, Carbone, & Blanquart, 2008). Nowadays, the way corporations view sustainability is better explained as an opportunity: MNCs proactively formulate and implement sustainability strategies to advance their corporate image and optimize their operations (Ibid.). Civil society actors call on MNCs to take responsibility for their
environmental impact while at the same time motivate consumers to ‘reduce, re-use, repair, and recycle’. Examples are documentaries such as River Blue and The True Cost that lay bare the social and environmental hazards created by the industry in developing countries, or the DETOX campaign that Greenpeace started in 2011 to raise awareness on the scale of water pollution as a result of the many chemicals used in the dyeing process (Greenpeace, n.d.; River Blue, 2020; The True Cost, 2020). To mitigate the environmental impact created by production, brands and retailers adopt corporate responsibility strategies that are focused on circularity and contributing in the transition to a circular economy (Ellen MacArthur Foundation, 2017). Supply chain circularity regards all steps of the value chain and includes the use of renewable or sustainable fibres, renewable resources (water and energy), and engaging consumers to stimulate recycling (Ibid.). This research focuses on brands’
responsibility to mitigate environmental degradation as a result of production in developing countries and uses the following definition of Corporate Environmental Responsibility (CER): ‘‘the duty to cover the environmental implications of the company’s operations, products and facilities; eliminate waste and emissions; maximize the efficiency and productivity of its resources; and minimize practices that might adversely affect the
enjoyment of the country’s resources by future generations’’ (Mazurkiewicz, 2004, p. 2), and includes all corporate strategies or policies that fulfil this task.
The aim of this study is to explore the relations between different lead firm CER activities and the drivers and resources of environmental upgrading of production activities. A Global Value Chain (GVC) approach is adopted to examine the research problem. A GVC approach entails the abstraction of global industrial production as a value chain: industrial production is organized in segmented production activities that are globally dispersed and organized based on value-added (Gereffi et al., 2005). The GVC approach is helpful because it allows us to examine how international linkages influence development outcomes. Within
11 the GVC, international apparel brands and retailers are the lead firms who manage production outcomes and have the ability the govern other value chain actors (Ibid.). Different academic domains and strands of literature discuss the ability of MNCs to mitigate environmental impact resulting from production activities. Environmental sustainability is discussed intensively in the business literature, either from an ethical perspective or a supply chain (green supply chain management) perspective. These kinds of literature, however, take a single-firm approach or focus on competitive advantage and technical/logistical implications of sustainability, which is not relevant for the focus of this research. Literature from the social sciences looks at buyers’ CSR activities to improve social and environmental outcomes for their suppliers. Most research in this area focuses on working conditions and doesn’t provide an in-depth discussion of how CER activities relate to environmental outcomes. The most common form of private governance of social and environmental outcomes is
auditing (Palpacuer & Bair, 2015). Previous research shows that compliance-auditing supports social outcomes that are not dependent on changes in power dynamics, such as health and safety measures (Egels-Zandén, 2014; Palpacuer & Bair, 2015), but the general narrative that is supported by research outcomes entails the failure of CSR to bring structural change in working conditions because buyers press down prices which work against their CSR expectations (Anner, 2018; D. Hoang & Jones, 2012; Lund-Thomsen & Lindgreen, 2014; Oka, Egels‐Zandén, & Alexander, 2020). Lund-Thomsen & Lindgreen (2014) observe a shift to more cooperative forms of CSR as a result of the repeated indication of the system’s failure. Cooperative-based CSR includes supplier capacity development, responsible purchasing (realistic lead times and fair prices), and collaboration with local actors and resources (Lund-Thomsen & Lindgreen, 2014). Anner (2018) conducted research into the ability of cooperative CSR to bring positive change for garment workers and
concludes that the ‘price-squeeze’ is still undermining buyers’ CSR efforts. Significant attention is addressed to CSR and social outcomes in the apparel value chain but concerning environmental outcomes research remains limited.
The concept of Environmental Upgrading (EnvU) is adopted because of its comprehensiveness in explaining why and how suppliers improve their environmental performance. De Marchi et al. (2013, p. 65) define EnvU 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”. EnvU is an understudied area, though it has received more attention over the last few years (Khattak & Pinto, 2018). Research
12 shows that buyers’ demands are an important driver of EnvU of suppliers (De Marchi et al., 2013; Khattak, Stringer, Benson-Rea, & Haworth, 2015; Poulsen, Ponte, & Lister, 2016), and confirms that increased cooperation between the supplier and buyer is likely to lead to more positive upgrading outcomes (Achabou, Dekhili, & Hamdoun, 2017). Poulsen et al. (2016) conducted research into cargo shipping and find that limited economic benefits derived from upgrading and the race to the bottom for prices, might discourage shipping companies from environmental upgrading. De Marchi et al. (2013) suggest that for successful EnvU,
technology, knowledge, and human and financial resources are important. This research aims to describe the relations between different lead firm CER activities and the drivers and resources of EnvU in order to provide an initial understanding of how leading brands and retailers affect the environmental performance outcomes of their suppliers.
Vietnam was chosen as the research context of this study. Vietnam is one of the leading apparel exporters worldwide, ranking 4th with apparel exports worth 31.5 billion USD (WTO, 2019). This makes Vietnam an important manufacturing hub of apparel and thus interesting for the research problem. My own familiarity and the familiarity of my supervisor with the country were important decision factors. This increased the ability to get access to research participants and my affiliation with Vietnam explains my interest to support the sustainable development of the country through conducting research there.
Vietnam is a lower-middle-income country in Asia that borders with China, Laos and Cambodia and has a 3260 km coastline (Ortmann, 2017). Vietnam has experienced rapid economic growth over the last decades at the expense of large scale environmental degradation (Schirmbeck, 2017). Environmental issues resulting from the country’s rapid industrialization process are air pollution (because of high energy consumption), polluted freshwater resources and bad waste management, which are directly affecting public health (Ortmann, 2017). The textile and apparel industry in Vietnam is an important contributor to economic growth – and development – in the country. The textile and apparel industry together provide 12% of all industrial jobs (Nhung & Thuy, 2018) and account for 19% of total exports1. Until 2030, rapid industry growth is projected with an average annual growth rate of 14.4% for the textile industry and 8.1% for the apparel industry (Nhung & Thuy,
1 Total export value: USD 215,119 million. Source:
https://wits.worldbank.org/countrysnapshot/en/VNM/textview. Textile industry exports: USD 8.1 billion, apparel industry exports: USD 31.5 billion (WTO, 2019).
13 2018). The export value of textiles currently is 8.1 billion USD (WTO, 2019), and the
government has the ambition to grow the textile industry to increase the benefits derived from Free Trade Agreements (FTAs) with Western export markets (P. Nguyen, 2019). Currently, 70% of raw material inputs for the apparel industry are imported, mainly from China. If Vietnam wants to make use of the favourable trade deal (the EVFTA2) with the EU, then raw material inputs need to be produced in a country that is also included in the EVFTA agreement (P. Nguyen, 2019), resulting in a direct need for Vietnam to increase national textile production. The textile and apparel industry are heavy users of energy and water and weak in waste(water) treatment (MCG, 2018). The industries contribute to Vietnam’s growing environmental concerns and sustainable growth of the apparel and textile industry are important to limit further environmental degradation and the negative impact on climate change. The societal relevance of this research is to support the sustainable development of the industry in Vietnam.
1.1 Research objectives
This research aims to contribute to closing the knowledge gap that exists in the literature on CSR regarding the effectiveness of lead firm CER activities in governing environmental outcomes of production in developing countries. The study’s aim is to do so by exploring the relations between different lead firm CER activities and the drivers and resources of EnvU. The study aims to provide suggestions for future research based on research outcomes that can further assess the significance of the different relations observed. This research furthermore aims to support the sustainable development of the textile and apparel industry in Vietnam by communicating the research outcomes, which can contribute to enhancing the understanding of local actors concerning the influence of international linkages on sustainable industry development. This research is exploratory in nature.
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1.2 Research questions
Research Question: How do lead firm Corporate Environmental Responsibility (CER) activities in the apparel value chain affect Environmental Upgrading (EnvU) practices of 1st
and 2nd tier suppliers in Vietnam?
Sub RQ1: What characterizes lead firm’ CER activities?
Sub RQ2: What characterizes EnvU of 1st and 2nd tier suppliers in Vietnam?
Sub RQ3: What affects supplier’ resources and motivation for EnvU?
1.3 Thesis setup
This thesis is divided into seven chapters. The current chapter has given an
introduction to the research problem and explained the societal and academic relevance of studying this issue. The following chapter (chapter 2) provides the theoretical framework through which the research problem has been analysed. Chapter 3 explains the methods that were used to conduct this study, gives an ethical and methodological reflection of the conducted methodology and discusses the limitations of the research outcomes. Chapter 4
gives an account of the research context, which is Vietnam. Vietnam’s economic and sustainable development is explained, and an analysis of the textile and apparel industry is given. Chapter 5 and chapter 6 are the empirical chapters that discuss and analyse findings. Chapter 5 discusses the first sub-research question and chapter 6 discusses the second and third research questions. Chapter 7 answers the main research question, reflects on theory to position this research in the existing literature and concludes this thesis by providing
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2. Theoretical Framework
This chapter presents the theoretical framework that this study uses to understand the observed social reality. The theoretical framework is the collection of theories and previous outcomes from empirical research that are relevant for our understanding of the research problem. This study adopts a Global Value Chain (GVC) approach, which entails the
abstraction of global industrial production as a value chain: industrial production is organized in segmented production activities that are globally dispersed and organized based on value-added (Gereffi et al., 2005). The GVC approach is helpful because it allows us to examine how international linkages influence development outcomes. The first section (section 2.1) discusses theories of governance and upgrading in GVCs. Section 2.2 discusses theories and outcomes of previous empirical research on Corporate Environmental Responsibility (CER).
Section 2.3 discusses theories and outcomes of previous empirical research on Environmental Upgrading (EnvU). Section 2.4 provides a conceptual scheme, which is the visual
representation of the hypothesis of the research problem based on theory and previous findings discussed in this chapter.
2.1 Governance in GVCs
Within GVC-analysis, the organisation of industrial production is examined through the notion of global value chains. A global value chain constitutes a chain of segmented production activities which are spread out across the globe (Gereffi et al., 2005). Each production activity adds value to the end product. Low-value activities, such as labour-intensive manufacturing, are mostly located in developing countries, while high-value activities, such as marketing and research and development, are located in developed countries (Gereffi, Humphrey, & Sturgeon, 2005). Governance has a central focus in GVC research. Humphrey & Schmitz (2001, p. 20) use the term governance to express how “firms in the chain set and/or enforce the parameters under which others in the chain operate”. These parameters entail what is produced, how much, by whom, when, how and for which price. “Lead firms are the primary sources of material inputs, technology transfer, and knowledge in these organizational networks” (Gereffi, 1999, p. 38) and coordinate
16 either buyer- or producer-driven, depending on the position of the lead firm in the chain (Gereffi, 1999).
Gereffi et al. (2005) introduced a framework to explain the degree of explicit
coordination that the lead firm exercises along the chain. The type of value chain governance is dependent on the complexity of business transactions, the ability to codify these
transactions, and the capabilities of suppliers. The more complex business transactions are and the lower the capabilities of suppliers, the higher the need for explicit coordination by the lead firm to ensure product and process quality. The framework introduces five types of value chain governance: market, modular, relational, captive and hierarchy (figure 1). In a market governance structure, there are no lead firms; the parameters of production are determined by supply and demand (the market). In a hierarchy, the lead firm coordinates all decisions and suppliers are vertically integrated. The apparel value chain has a relational structure (Gereffi et al., 2005). Over the years, the complexity of apparel production has created capable tier 1 suppliers in producing countries that leading apparel brands and retailers have built strong relations with. The high capability-level of relational suppliers results in lesser need for explicit coordination and is better described as intense collaboration.
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2.1.1 Upgrading
GVC analysis is particularly interesting in development studies because of the relation between GVC-participation and development outcomes. A deeply ingrained idea that results from a neoliberal understanding of the development trajectory, is that GVC-participation brings positive development outcomes. This relation is assumed because knowledge and information are disseminated through GVCs which supports participating firms in learning and enhancing their capabilities. The theoretical understanding is that suppliers learn from international buyers which gives them the ability to capture additional value and to move up the value chain (Gereffi et al., 2005). It shows, however, that social and economic
development outcomes resulting from GVC-participation don’t always go hand in hand and that positive economic outcomes might result in social downgrading (Gereffi & Lee, 2016). Similarly, economic development is often at the cost of the environment (Mazurkiewicz, 2004) and so sustainable development, which takes into account the triple bottom line including the economy, society and the environment, is not always positively stimulated by GVC-participation.
Industrial (economic) upgrading is defined by Gereffi (1999, pp. 51–52) as “…a process of improving the ability of a firm or an economy to move to more profitable and/or technologically sophisticated capital- and skill-intensive economic niches.” GVC governance is an important determinant for upgrading outcomes of participating firms because it defines the degree and how of knowledge dissemination and collaboration. A higher degree of vertical integration in the value chain leads to increased knowledge sharing and hence positively affects upgrading outcomes (Golini, De Marchi, Boffelli, & Kalchschmidt, 2018). The literature distinguishes between three categories of upgrading: economic, social and EnvU. Economic upgrading includes making higher quality products (product upgrading), working more efficiently (process upgrading), moving into a segment of higher-skilled activity (functional upgrading), or moving into a different productive activity (inter-sectoral upgrading) (Humphrey & Schmitz, 2002). Social upgrading is the process of increasing the quality of employment through improvements in working conditions and increasing worker’s rights (Gereffi & Lee, 2016). Golini et al. (2018) find that captive and relational governance structures enable learning in the value chain and therefore contribute more to product, process or inter-sectoral upgrading in the value chain than other types of governance. They, however, conclude that social and functional upgrading (moving into production activities
18 that add higher value, see figure 2) is not supported by GVC-participation (Golini et al., 2018), which confirms the theoretical perspective that lead firms will only enable their suppliers in types of upgrading that does not threaten their position and power in the value chain (Bair, 2017).
Figure 2. The smile-curve describes the distribution of value-added of different production activities (Gereffi & Fernandez-Stark, 2016).
Because of the limited contribution of GVC-participation to social and functional economic upgrading – primarily caused by the race to the bottom that drives down prices and labour costs – the importance of horizontal - or cluster - governance in social and economic upgrading is emphasized by different scholars (Gereffi & Lee, 2016). Gereffi and Lee (2016: p. 30) define horizontal governance as “locality-based coordination of the economic and social relations between cluster firms as well as institutions within and beyond the cluster.” Horizontal governance can be seen as creating an enabling environment to share resources and innovate to support upgrading outcomes among cluster firms (Ibid.).
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2.1.2 Standard setting
Standardization of how production takes place and what is produced aims to reduce transaction costs related to chain governance and lower the risks for actors by ensuring product and process quality (Nadvi & Wältring, 2004). Value chains are highly complex: many different suppliers are involved in the production of a single product line and there is a need for codification of process and product information to manage this complexity (Ibid.). Standards provide transparency of information on agreed-upon product and process specifics and in doing so plays an important role in industrial governance. Since the era of
globalization, nation-states are not on the forefront any longer in governing social and environmental outcomes of production. More focus is now placed on how MNCs, Non-Governmental Organisations (NGOs), International Organisations (IOs) and private initiatives govern environmental and social outcomes (Appelbaum & Lichtenstein, 2017). These actors make use of standards to govern social and environmental outcomes and
compliance with international standards has become an entry-requirement for participation in GVCs (Humphrey & Schmitz, 2001).
Standards take all sorts of forms: private Codes of Conduct (CoCs), NGO-driven standards, conventions and ratifications, national laws, sector-specific codes and labels, international standards from the International Standard Organization (ISO) and regional trade agreements (Nadvi, 2008). A general trend that resembles the division in GVCs, is that developing countries are standard-takers and developed countries are standard-setters (Ibid.). While product standards have been converging over the last decades, standards regarding social and environmental outcomes have been diverging. The plurality of private and non-governmental standard initiatives creates confusion on both the consumer and supplier side, undermines the credibility of individual initiatives and instead of enhancement of efficient governance may lead to competition and opaqueness of market information (O’Rourke, 2006). Despite many initiatives to converge social and environmental standards, buyers hold on to their company-specific CoCs: the risks associated with non-compliance of social and environmental issues are seemingly too high, and specific brand-CoCs have proven an
effective marketing tool for buyers to position themselves as ethical or sustainable businesses (Nadvi, 2008).
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2.1.3 Private, non-governmental and public governance
Private governance refers to governance initiatives enacted by private sector actors, including MNCs (e.g. CoC), but also private (for-profit) standard-initiatives (e.g. eco-labels or certificates) or (business-driven) MSIs (e.g. the Sustainable Apparel Coalition (SAC), or the Worldwide Responsible Apparel/Accredited Production (WRAP)). Fransen (2012) defines business-driven MSIs as “programs governing social and/or environmental standards of production that are exclusively developed by for-profit organizations and governed mainly by such organizations.” (Fransen, 2012, p. 166). Private governance is dependent on voluntary action and market-incentives, and though it transcends national boundaries within a producing country its reach remains limited (Gereffi & Lee, 2016). MSIs have proliferated because this form of collective organisation is seen as having greater
legitimacy than efforts by individual organizations (Fransen, 2012). Ponte (2020) and De Marchi et al. (2013) mention the increasing role of MSIs in global standard-setting. Today, MSIs are more influential in determining global production standards than individual lead firms (Ponte, 2020).
Public governance differs from private governance. Public governance is enacted by public actors, such as the state, and is usually mandatory; rooted in a legal framework it extends to every enterprise in the nation-state. Public governance is not limited to national regulation, it can also refer to multilateral trade agreements that indirectly impact social and environmental conditions in the value chain (Gereffi & Lee, 2016). Non-governmental governance can be seen as social and environmental governance mechanisms that are managed by non-profit initiatives. Examples are the Workers’ Rights Consortium (WRC) or Fair Wear Foundation (FWF). Scholars sometimes refer to private and NGO initiatives together as non-governmental mechanisms.
A debate exists whether private and non-governmental governance displace public governance or whether they can complement national authority. Critics say
non-governmental mechanisms may discredit the sovereignty of governments in that it positions consumers as key stakeholders of monitoring and enforcement instead of the state, labour unions (O’Rourke, 2006) and local stakeholders. Non-governmental governance initiatives should be designed in such a way that it complements national authority rather than that it substitutes it (Ibid.). Private and non-governmental governance mechanisms may weaken traditional forms of governance, but the issue is more complex than simple displacement
21 (Gereffi & Lee, 2016: 34), especially since developing countries often don’t possess the capabilities or willingness to enforce their laws (Locke et al., 2013). Even though national regulation is usually up to international standards, governments of developing countries are often reluctant to enforce social and environmental laws because they want to maintain a favourable economic climate for Foreign Direct Investment (FDI) (Ibid.; Gereffi & Lee, 2016). Locke et al. (2013) found that the nature of the issue and the capability of the law enforcement system determines whether other governance mechanisms are complementary or substituting public governance. In the case of complementation, non-governmental
mechanisms support enforcement of the national law and in this way attributes to the legitimacy of the national authority (Locke, Rissing, & Pal, 2013).
It is now more commonly accepted that governance of global production isn’t so straightforward as the initial typology by Gereffi et al. (2005) and that lead firms and
suppliers are part of a global governance system that influences production outcomes. Global governance constitutes “the efforts of non-state actors to manage transnational processes, including via the creation of norms and rules regarding global production” (Palpacuer & Bair, 2015, p. 2). GVC theory has expanded its scope beyond the dyad buyer-supplier
relationship to account for the complex reality that GVCs are. Dallas et al. (2019) incorporate the influence of NGOs, states, international organisations and MSIs in their framework to explain governance dynamics and define global value chain governance as “the actions, institutions and norms that shape the conditions for inclusion, exclusion and mode of participation in a value chain, which in turn determine the terms and location of value addition, distribution and capture” (Dallas et al., 2019, p. 667).
2.2 Corporate Environmental Responsibility
The globalized nature of industrial organisation has positioned lead firms as governors of social and environmental outcomes of production. Brands and retailers adopt Corporate Social Responsibility (CSR) strategies to counter the negative impact of
production through self-governance of their supply chains. CSR is generally referred to as “the responsibility of enterprises for the impact they have on society” (Gereffi & Lee, 2016, p. 25), or to take a more elaborate definition from Blowfield and Frynas’ (2005, p. 503) in Lund-Thomsen and Lindgreen (2014: p. 12): ‘‘CSR is an umbrella term for a variety of theories and practices all of which recognize the following: (a) that companies have a
22 responsibility for their impact on society and the natural environment, sometimes beyond legal compliance and the liability of individuals; (b) that companies have a responsibility for the behavior of others with whom they do business (e.g., within supply chains); and (c) that business needs to manage its relationship with wider society, whether for reasons of
commercial viability or to add value to society.’’ CSR includes governance of both social and environmental issues. There is limited literature available on the effectiveness of CER – which only focusses on environmental outcomes – therefore section 2.2.1 discusses available research on CSR effectiveness.
2.2.1 Effectiveness of CSR
CSR can take different forms, but the most practiced and well-known form of CSR is the implementation and enforcement of CoCs, referred to as compliance-auditing.
Effectiveness of buyer’s CSR policies in the apparel value chain is a debated topic: researchers find that after three decades of CSR, improvements in working conditions are marginal compared to the growth of the industry and the value created in the chain (Anner, 2018; Barrientos & Smith, 2007; Lund-Thomsen & Lindgreen, 2014). Compliance-auditing has failed to bring significant change for several reasons. An audit report that states that a supplier is compliant, doesn’t mean that social and environmental issues are resolved in the experienced reality of the producing country (Lund-Thomsen, 2008). Suppliers have been unable to meet contrasting demands from buyers involving lower prices and social and environmental demands. Audits take place usually once a year, allowing suppliers to prepare themselves to ensure a ‘pass’. Double bookkeeping became a common practice to falsify records and in the case that fraud was discovered, auditors often lacked sufficient incentive to demand action (Lund-Thomsen & Lindgreen, 2014). When a supplier is marked as compliant without sufficient evidence, monitoring practices harm instead of support social and
environmental outcomes because it falsely marks suppliers as ‘sweat-free’ and ‘sustainable’ (O’Rourke, 2006). Compliance-auditing is supposed to incentivize suppliers to comply by ending contracts in case of non-compliance and by placing more orders in case of good performance. In reality, this rarely happens (Lund-Thomsen & Lindgreen, 2014). The voluntary nature of CoCs is highly problematic. The reliance on self-regulation means that workers and stakeholders have no legal ground to hold buyers accountable for violations of their codes. Scholars argue for institutionalized accountability of buyers through CoCs of
23 which workers and unions are also signatories (Anner, Bair, & Blasi, 2017). It is argued that without accountability mechanisms, CSR merely legitimizes the position of lead firms as governors of global production without bringing substantial change (Palpacuer & Bair, 2015).
Successful outcomes in improving social-compliance levels can be attributed to lead firm CSR in the area of increased health & safety standards in factories (Egels-Zandén, 2014), but in regards to wages, freedom of association rights, and working hours, little has been achieved (Appelbaum & Lichtenstein, 2017). The sourcing dynamics in the apparel value chain characterized by short lead times and low prices demanded by buyers are detrimental for achieving workers’ rights. A ‘price-squeeze’ is experienced that strains supplier’ resources and that until now has always undermined CSR practices; making Code-violations the rule rather than the exception (Anner, 2018; Esbenshade, 2017). Scholars argue that structural improvements can only be achieved when governance targets the sourcing and pricing dynamics of the apparel value chain and when buyers can be held accountable for code violations (Anner et al., 2017).
Lund-Thomsen and Lindgreen (2014) describe a shift from compliance-based CSR towards cooperative CSR. Cooperative CSR is characterized by the integration of CSR and sourcing demands, a focus on long-term buyer-supplier relationships with frequent
communication and supplier capacity building instead of mere compliance-monitoring. Cooperative CSR activities build supplier’ capacities through trainings etc., which support enforcement of CoCs because of enhanced awareness and knowledge, which increases the suppliers’ capability in social upgrading. Whether cooperative CSR activities can bring structural improvement is doubtful because of the competitive and volatile nature of the industry (Lund-Thomsen & Lindgreen, 2014).
2.2.2 Private governance of environmental outcomes
Private regulation of the environmental impact resulting from production has been analysed from different perspectives. To repeat the definition as given in the introduction of this thesis, CER refers to ‘‘the duty to cover the environmental implications of the company’s operations, products and facilities; eliminate waste and emissions; maximize the efficiency and productivity of its resources; and minimize practices that might adversely affect the enjoyment of the country’s resources by future generations’’ (Mazurkiewicz, 2004, p. 2). This definition points to the responsibility of the corporation to take action for its adverse
24 environmental impact, but it leaves the scope of the firm’s responsibility open for
interpretation. Corporate responsibility does not stay limited to the corporations’ direct operations, there is a widely accepted understanding of the firm’s responsibility for the actions of its suppliers. Brands and retailers are expected to integrate sustainability demands into their supply chain management (Caniato, Caridi, Crippa, & Moretto, 2012; Yadlapalli, Rahman, & Gunasekaran, 2018). Green Supply Chain Management (GSCM) is defined as the “integration of environmental thinking into supply chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the consumers as well as end-of-life management of the product after its useful life” (Caniato et al., 2012, p. 660). GSCM takes into account all nodes of the value chain: from the conceptualization of the product to end-of-life management. A key characteristic of GSCM is the focus on economic and environmental advancement in the supply chain through long-term collaboration with suppliers (Ibid.). The buyer-supplier literature also emphasizes supply chain collaboration and conceptualizes CSR as selection and supplier-development (Yadlapalli et al., 2018). Suppliers are selected on their social and
environmental capabilities and when entered into a business arrangement, suppliers are assisted in improving their environmental performance through buyer-supplier collaboration. Supplier-development includes assessment, feedback & evaluation, education & training and capital investment (Ibid.). Cooperative CSR, which is discussed above, from Lund-Thomsen and Lindgreen (2014) also includes supplier-development as a dimension, but in less detail. Jeppesen and Hansen (Jeppesen & Hansen, 2004) discuss different strategies that buyers employ to assist suppliers in developing countries in implementing environmentally
sustainable practices. They speak of shallow to deep environmental collaboration with three stages: standard-setting, monitoring & auditing, and technical collaboration. Shallow environmental collaboration – standard-setting and monitoring & auditing – is in line with compliance-auditing. The third dimension, technical collaboration, includes the provision of technical support to suppliers, education and training to improve suppliers’ management and corporate governance skills (Jeppesen & Hansen, 2004).
Corporations initially viewed sustainability as a risk and integrated environmental concerns into their CSR policies in response to pressure from NGOs to save their corporate image. Sustainability in apparel could undermine corporations’ ability to achieve competitive prices and short lead times (de Brito et al., 2008). Sustainability nowadays is better explained as an opportunity for business. Corporations in higher segments of the value chain use
25 sustainability to strengthen their brand reputation, mitigate reputational risk, increase their bargaining power and create new product lines (Ponte, 2020). “Sustainability is thus becoming mainstreamed in business conduct and operations and is likely to remain a strategic concern as long as it can be leveraged for capital accumulation and to ensure competitive advantage. In other words, corporations are turning sustainability into a business” (Ibid: 75).
2.3 Environmental Upgrading
The concept of Environmental Upgrading (EnvU) is adopted because of its comprehensiveness in explaining why and how suppliers improve their environmental performance. De Marchi et al. (2013, p. 65) define EnvU 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”. The literature conceptualizes EnvU by discussing the drivers, resources, types of practices and benefits of EnvU. CER
effectiveness can thus be analysed by determining how CER contributes to (or works against) these dimensions. The notion of upgrading in GVCs includes the idea of moving up the value chain and increasing the competitive position of the firm or industry as such that it can better contribute to (economic) development (Gereffi et al., 2005). The concept ‘upgrading’ can be misleading because of the idea that moving up the chain economically is intrinsically part of the concept’s definition. Social and environmental upgrading, however, are defined to only concern upgrading of the social and environmental conditions (Barrientos & Smith, 2007; De Marchi et al., 2013), and don’t consider ‘moving up the chain in terms of capturing economic value’ as a determinant of environmental or social upgrading. Furthermore, upgrading
practices might move firms up or down the value chain or in both directions simultaneously as previously practiced lower value-added activities often continue at the same time and price premiums are not obtained (Tokatli, 2013). There is much to say about the concept of
‘upgrading’, nevertheless, it offers a comprehensive lens to study the implementation of environmentally sustainable practices in the context of GVCs and is therefore adopted as a concept.
The most important driver of EnvU of suppliers in developing countries is identified by the literature to be “buyers’ requirements” (Khattak & Pinto, 2018). Research finds that suppliers in developing countries primarily engage in EnvU to meet buyer’s demand or
26 international standards to participate in GVCs (Achabou et al., 2017; de Marchi & di Maria, 2019; Golini et al., 2018; Khattak et al., 2015). Other external drivers are meeting regulatory and institutional pressure. Internal drivers that are mentioned include director’s or
management values and enhancing the firm’s competitive position through cost savings or enhanced corporate image (Achabou et al., 2017; de Marchi & di Maria, 2019).
There are three types of EnvU: process, product and organizational EnvU (De Marchi & Di Maria, 2019). Process EnvU means the implementation of new technology to reduce environmental damage and increase efficiency. Product EnvU means introduction or alteration of a product to make it more environmentally friendly; this can be through a (1) focus on an extended life cycle of the product, or (2) reduced environmental impact during its use, or (3) through input of more sustainable resources in its creation. Organizational EnvU is achieved when reducing the businesses’ impact on the environment through optimization of managerial practices. This can be through the adoption or development of standards (de Marchi & di Maria, 2019).
Literature shows that for successful EnvU, the supplier needs technology and knowledge, human and financial resources (De Marchi et al., 2013). EnvU is an innovation process and in this process two things are important: collaboration with external partners in sustainability and internal capabilities of suppliers in terms of absorptive capacity (de Marchi & di Maria, 2019). Wu et al. (2012) researched the adoption of green supply chain practices in the Taiwanese apparel industry. They found that high social capital (inter-firm network) improves knowledge sharing and collaboration and appeared important in the adoption of green practices. When organizational resources were not present, manufacturers could turn to their network or to the government for support. The government played a critical role in the transformation of the industry in providing capital and technical knowledge (Wu, Ding, & Chen, 2012). Achabou et al. (2017) conducted research into EnvU of Tunisian oil firms and find that the impact of GVC participation on EnvU would have been greater if buyer firms had assisted suppliers financially and technically instead of merely imposing norms and standards. Khattak et al. (2015) conducted research into EnvU of apparel suppliers in Sri Lanka and found that awareness of environmental sustainability among employees is important for the successful implementation of sustainable processes in the factory. Besides employee awareness and supplier capability, the commitment of management to CSR is very important: the management needs to be made aware of long-term competitive gains as a
27 result from upgrading for successful implementation of sustainable practices (Achabou et al., 2017).
The limited research available on EnvU finds that the costs and benefits of upgrading are not equally shared throughout the value chain (Khattak & Pinto, 2018; Poulsen et al., 2016). Khattak et al. (2015) found that apparel suppliers in Sri Lanka didn’t necessarily obtain higher profits because of EnvU and that cost savings were an incentive to improve their environmental performance. Poulsen et al. (2016) conducted research into EnvU in maritime shipping. They similarly found that shipping companies implement sustainable solutions to meet buyer’s (cargo owners) requirements, but that companies only select those solutions that reap cost savings because they need to keep low prices and can’t charge a premium for sustainability. The supplier bears all the costs while buyer firms won’t pay a premium price, but continue to impose higher environmental standards (Poulsen et al., 2016). A ‘price squeeze’ is observed (de Marchi & di Maria, 2019), which may discourage suppliers in further EnvU.
2.4 Conceptual scheme
The previous sections have discussed theories and findings from previous empirical research that are relevant for answering the research question: “How do lead firm Corporate Environmental Responsibility (CER) activities in the apparel value chain affect
Environmental Upgrading (EnvU) practices of 1st and 2nd tier suppliers in Vietnam?” This
leads to the following conceptualization of the hypothesis of the relation between the dependent variable, CER activities, and independent variable, EnvU. In the conceptual
scheme, the positive relation between compliance-auditing and cooperative CER and EnvU is visualized. Previous research (Anner, 2018; D. Hoang & Jones, 2012; Lund-Thomsen & Lindgreen, 2014; Oka et al., 2020) shows that the effect of buyer’s purchasing behavior is much stronger than the effects of CER activities. Different scholars find that collaborative efforts (cooperative CER) have a larger impact than merely imposing new standards
(compliance-auditing) (Achabou et al., 2017; Lund-Thomsen & Lindgreen, 2014); this also hints to the importance of GVC structure in governance outcomes (Gereffi et al., 2005; Golini et al., 2018).
28 Figure 3. Conceptualization of the relation between the dependent and independent variable (author).
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3. Methodology
This chapter outlines the methodology employed in this research. Section 3.1
discusses the ontological and epistemological position of the research. Section 3.2 explains the operationalization of concepts. Section 3.3 discusses the unit of analysis. Section 3.4
discusses research design & methods. Section 3.5 outlines the sampling strategy. Section 3.6
dives into data analysis. Section 3.7 reflects on the quality of the research methodology and
section 3.8 gives an ethical reflection.
3.1 Ontology and epistemology
I have adopted a critical realist perspective to doing research. This includes an ontological perspective that assumes there is a reality of the social world that exists
independent of human interpretation of reality. The main difference between the reality of the natural and the social world is that the social world is constantly being recreated through activities. These activities, referred to as causal links, produce outcomes that can be observed on the empirical level (Bryman, 2012). The theory is an explanation of these causal linkages and why they occur. The epistemology of critical realism regards human knowledge as the observation of reality. The observation of reality can vary between humans and over time and some observations (theories) are more accurate than others. Critical realists use existing theories to analyse causal linkages but acknowledge that theories are fallible (Fletcher, 2017). This research uses theories on Governance in GVCs, Corporate Social Responsibility and Environmental Upgrading from different scholars (discussed in chapter 2). This leads to the adoption of a deductive approach to research but allows participants’ observation to
challenge existing theory because new insights might be closer to reality (Fletcher, 2017).
3.2 Operationalization
The independent variable in the research question is Corporate Environmental Responsibility (CER), and the dependent variable is Environmental Upgrading (EnvU). The conceptual scheme (section 2.4) shows the relation between the two variables based on theory and previous empirical research. The concepts of CER and EnvU have been
30 Lund-Thomsen and Lindgreen (2014), Jeppesen and Hansen (2004), Khattak et al. (2015), Poulsen et al. (2016), De Marchi et al. (2013), De Marchi and Di Maria (2019). The dimensions and indicators that follow from the operationalization table have been used to inform data collection.
3.3 Unit of analysis
The unit of analysis is textile and apparel manufacturers in Vietnam that are supplying to leading apparel brands and retailers. The study also focusses on buyers and stakeholders in the apparel industry to explain how CER is executed. Buyers and stakeholders include
brands, supply chain intermediaries, NGOs, the government, industry organisations and MSIs are other units of observation. The unit of analysis includes 1st and 2nd tier suppliers. 1st tier suppliers are garment manufacturers whose main production activity is sewing. 2nd tier suppliers are textile producers or facilities who provide services to garment manufacturers. Examples of 2nd tier supplier-activities: weaving, knitting, dyeing, embroidery, labelling, screen-printing, laundry. The core activities of textile mills are weaving and/or knitting and dyeing. Textile and garment factories exist in different constellations: some garment
manufacturers also do laundry, and some factories cover all steps from weaving to cut-make-trim.
3.4 Research design
This study makes use of a qualitative approach to research. The purpose of qualitative research is to gain a deeper understanding of the phenomenon (Bryman, 2012). The research aim is to explore the relations between different lead firm CER activities and the drivers and resources of EnvU. This research is exploratory in nature, which suits a qualitative approach because it aims to understand the relations that are underlying observable phenomena. The qualitative methods used to collect data are semi-structured interviews and document
analysis. Findings have been triangulated as much as possible by using document analysis to improve the reliability of findings. Triangulation of data reduces the possibility of biases that might occur when only one data collection method is used (Ibid.). Data collection methods were conducted at the same time. The interview topics and questions were informed by the literature and insights from document analysis. The interview guides are added in appendix 2.
31
3.4.1 Semi-structured interviews
A total of 16 interviews were conducted with different stakeholders. The interview guide remained flexible throughout data collection. The topics and questions that were discussed changed based on the type of stakeholder I was talking to or based on relevant insights from previous interviews that needed further elaboration. On average, the interviews lasted 45 minutes to an hour. Only interviews with participant 3 and 4 were 15 minutes approximately due to time constraints. These interviews, however, are particularly valuable because they were the only time observation of a factory and industrial park were possible due to the COVID-19. Most interviews were audio-recorded and transcribed later if
permission for audio-recording was granted. If not granted, notes were taken. In 6 out of 16 interviews a translator assisted with translating during interviews. After transcribing, the translator checked the transcripts with the audio-recording to assure that there were no parts that had gotten lost in translation.
3.4.2 Document analysis
Websites, policy documents and sustainability reports from apparel brands and
retailers have been analysed as well as websites and reports from participants’ companies and organisations. Document analysis concerns the collection, reviewing and interrogation of pre-produced texts relevant to the research question. When analysing documents, it is important to understand who wrote it, why and for which audience to understand possible biases (O’Leary, 2004). In most cases, the audience of the documents that are analysed is
consumers. This means that brands’ policies and sustainability reports could be biased and portray a better image than the reality is. Brands’ policies and sustainability reports therefore mainly have been used to get an understanding of the industry’s discourse around
sustainability. Concerning CER activities, findings were derived from interviews and findings from document analysis were used as support.
Document analysis included brands’ policies. IDH Vietnam helped me to identify the most relevant brands and retailers based on their contribution to apparel exports in Vietnam for document analysis of brands’ policies. The initial sample of 10 brands and retailers was taken based on importance assigned by IDH Vietnam. Later, the sample was compared with
32 brand-names mentioned by suppliers and stakeholders and adjusted. A list of all documents that are included in this research can be found in appendix 5.
TARGET BRANDS INC. VF CORPORATION
Fast Retailing Nike
Lululemon GAP Inc.
H&MGroup Kohl’s
PVH Corporation Walmart
Table 1. List of brands & retailers included in the sample for document analysis (author).
3.5 Sampling
A non-probability sample is used for this research because of the difficulty to access participants. The disadvantage of non-probability sampling is that the sample can be affected by human judgement in the selection process, which can lead to a bias in the results (Bryman, 2012). This research used a snowball sampling strategy to collect the data and to get access to research participants. In snowball sampling, “the existing study subjects recruit future
subjects among their acquaintances” (Naderifar, Goli, & Ghaljaie, 2017, p. 2). Snowball sampling continues until saturation of information is reached. Saturation of information means that adding a new case does not lead to the discovery of new findings concerning one of the theoretical dimensions (Bryman, 2012). Snowball sampling was applied by using the researcher’s network and contacts to get in touch with organisations and factories that are involved in clothing production in Vietnam. I was able to gain access to my research participants through the assistance of The Sustainable Trade Initiative (IDH) Vietnam, the development organisation where I did an internship, and through the Vietnam Textile & Apparel Association (VITAS). IDH and VITAS did not limit my work as a researcher in any way, I was able to freely make choices and decisions regarding how to collect and analyse my data.
In total 16 interviews were conducted with representatives of 5 manufacturing facilities, 2 supply chain intermediaries, one brand, an industrial park, a consultancy firm, a development organization, an industry organization, and 2 NGOs. At the beginning of fieldwork, interviews were postponed and later cancelled due to COVID-19. Halfway through fieldwork, the decision was made to conduct interviews online instead of through
33 company-visits, to be able to schedule interviews. This has limited the total amount of
manufacturers that I was able to interview. The focus of this research was to capture the perspective of manufacturers in how they are supported in EnvU, which is why most time was spend on accessing and interviewing manufacturers and why fewer buyers and stakeholders have been interviewed. A limitation of this research is that only compliance-officers from manufacturers were interviewed; account managers and operation managers were left out. This in part had to do with the increased difficulty to arrange interviews because of COVID-19 – two face-to-face interviews had been scheduled with both the compliance officer and operation manager, but were cancelled and didn’t move online – and the second reason is that this was only thought of later on in the data collection-phase, I at first assumed that only interviewing compliance officers would be sufficient. The focus on the supplier’s perspective also explains why no interviews were conducted with buying agents and designers from brands and retailers. A detailed overview of research participants is provided in appendix 3.
Table 2. Research participants (author).
SUPPLIERS 4 Textile & Garment 1
6 Textile mill 1
7 Textile mill 2
8 Textile & Garment 2
13 Textile mill 3
STAKEHOLDERS 1 Development organization 1
2 Development organization 1
3 Eco Industrial Park
5 Industry organization 9 Development organization 1 10 Social NGO 11 Consultancy firm 12 Environmental NGO BUYERS 14 Supply chain intermediary 1
15 Supply chain intermediary 2
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Explanation of participants’ authority.
Participant 11, 14 and 15 are valuable informants. Participant 11 is an energy and water consultant who assessed over 35 textile and dyeing mills, and even more garment factories, that all supply to large international apparel brands. Participant 14 is the country-CSR representative of a large supply chain intermediary and is in charge of managing country-CSR outcomes at their 400 factories in Vietnam. She has over 20 years of experience in
compliance-work in the apparel industry in Asia. Participant 15 is the global CSR manager of a Dutch supply chain intermediary. Their company sources from China and Bangladesh mainly and only from 1 factory in Vietnam, but they are an important player in the European market and participant 15 provided me with valuable insights into how environmental
sustainability is managed in the apparel value chain. Participant 16 is the CSR representative of a medium-sized Dutch brand who mainly sources from Bangladesh and not from Vietnam, but who nevertheless provided me with valuable insights into the role of bargaining in the apparel value chain and general sourcing and auditing practices.
3.6 Data analysis
Atlas.ti was used to code and analyse the collected data. All data-sources were uploaded into Atlas.ti: all interview data, brand policies and relevant documents about key value chain actors and participants (including downloaded webpages). A list of deductive codes was established following the operationalization table and the research questions. All interview data were coded with these codes. Findings that did not fit any of the existing codes, were tagged with new codes. When all data were analysed, a network was created to map and identify the relations between codes, which is inserted in the concluding chapter of this research, figure 7.
3.7 Methodological reflection
Reliability – a quantitative quality criterium – in qualitative research is approached as trustworthiness. To ensure the trustworthiness of the results and conclusions from this
research, quality criteria from Guba & Lincoln have been taken into account (Bryman, 2009). These quality criteria have been widely cited and include credibility, transferability,
35 dependability and confirmability. Authenticity is discussed in the Ethical Reflection (section 3.9).
Credibility
Credibility entails providing a comprehensive account of the social reality. To ensure this, I made sure to triangulate my collected data. Interview-data has been triangulated with desk-research (document analysis and literature review) to cross-check findings. A certain level of saturation has been reached through conducting interviews in understanding the relations between CER activities and EnvU. My translator assisted me during 6 interviews and to assure that a reliable account of the participant’s answers was written down, interviews were recorded, and my translator checked his translation by listening back to the recordings and checking them with the transcriptions. It was at times difficult to find a good flow in the conversation when the interview needed to be translated, this possibly resulted in some cases in lower quality of the interview-data because a natural flow in the conversation was missing. My translator and I acknowledged this as learning process, and we got better at it after a while.
Transferability
Are the research outcomes transferable to other research contexts? The exploratory nature of this study and the limited number of research participants make that research findings can’t be generalized. Generalizing research findings is also beyond the aim and scope of this study. However, relevant insights for future research can be derived, also for research in different contexts. Chapter 4 provides an extensive description of the research contexts that sheds light onto any particularities of Vietnam that constrain transferability of findings to other contexts.
Dependability
Dependability refers to a thorough description and adequacy of the research process. A thick description of the methodology in the assigned section enables the replication of the study. During the thesis writing process, an adequate account was kept of decisions made that impacted the research process.
