Business Models in Sustainability Certification: Towards a More Substantive Understanding of Rule Intermediaries in Transnational Governance for Sustainable Commodity Chains
From the perspective of standard organizations this means that for their sustainability standards to become operational (i.e. to be taken up by economic operators) they need to be accommodated into contractual arrangements between standard, certification and accreditation organizations. The establishment and management of these trilateral relationships are thus critical for the functioning, including the success (here: uptake) of standards - especially in sectors with high proliferation of and competition among different standard systems. The question arises: what drives interactions between standard, certification, and accreditation organizations, and how do they influence the functioning of a standard?
By addressing this question, this study contributes to an emergent field of research. Few studies deal with the implementation of standards, and even less on an empirical basis. Thus, the various processes through which actors (especially certification bodies) accommodate, operationalize and translate standards in their own work are understudied. As a result, concrete (inter-)actions within the inter-organizational arrangements that enforce certification standards, their premises and effects remain poorly understood. Levi-Faur and Starobin (2014) in particular point to the role of “regulatory intermediaries”, i.e. “actors with the capacity to affect, control, and monitor relations between rule-makers and rule-takers via their interpretations of standards and their role in the increasingly institutionalized processes of monitoring, verification, testing, auditing, and certification” (ibid., 22). Given the consistent and systematic role that these actors play for standards and transnational governance of corporate sustainability, they argue, it is necessary to place these actors, their roles, interests and interactions at the center of theoretical, analytical and empirical research.
Against this background, we comparatively study the roles, interests, and interactions in interorganizational arrangements between standard, certification and accreditation organizations that have formed to enforce sustainable production of biofuels. We define arrangements of such interdependent organizations that are involved in the implementation of a standard, and the rules that govern their interactions as certification systems.
The generic question formulated above can be divided in three research questions (RQs):
- What is the role and what the interest of each actor group in a certification system?
- What interactions between the different groups of actors can be identified?
- How are standard setters and their standards influenced by interactions within certification systems?
The empirical research takes the form of an embedded multiple-case study. We will draw on institutional theory and transaction cost economics to frame the research. Complementary, a business models concept will be used to conceptualize each type of actor in a certification system. Unlike other business models literatures that are centered on a firm, the concept by Zott and Amit (2010) emphasizes cross-organizational boundaries by treating a business model as a system of interdependent activities. Its advantage regarding our research object lies in the potential to account for interlinked activities performed in actor networks by shedding light on an organization’s linkages to other (external) organizations, and on value-creating interactions.
Collecting qualitative data from diverse sources enables triangulation of results. The “cases” are concrete certification systems that have configured to enforce particular standards for sustainable biofuel production in the context of the EU’s Renewable Energy Directive. The units of analysis in each case are the three types of organizations involved in certification systems – standard, accreditation, and certification organizations. Their business models will be reconstructed and analyzed in light of their institutionally constituted roles (RQ 1). Furthermore, interactions in concrete certification systems will be mapped (RQ 2), and assessed in order to better understand how standard organizations and standard systems are affected by these interactions (RQ 3).
Comparative analysis of multiple cases will allow for more robust results. Embedding all of the cases in the EU biofuel regulation is particularly instructive, because the EU has made certification mandatory for biofuel producers, thereby creating a captive market for certification of “sustainable” biofuels. The regulation, which is so far unprecented in agro-food and forestry, allows for ruling out confounding factors of first-mover advantage and the restraints of a small market size typical of many other certified products.
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