Diffusion of Corporate Responsibility in the Forestry Sector

1. Diffusion of Corporate Responsibility in the Forestry Sector Natalia Vidal & Robert Kozak Faculty of Forestry University of British Columbia IUFRO All Division 5 Conference Taipei, Taiwan – November 1, 2007

2. Outline • Introduction – CR & the forestry sector • Study objectives • Methods • Results • Understanding of CR • Evolution of CR • Framework explaining diffusion of CR (preliminary results) • Key messages

3. About Corporate Responsibility • No general accepted definition • Multiple dimensions (environmental, social, economic) • Need to balance interests of different stakeholder groups • Highly dependent on contextual characteristics

4. Corporate Responsibility & Forestry • Corporate Responsibility (CR) has special meaning for the forestry sector • Easy target of public criticism • Operations have direct environmental impact • Depend on sustained extraction of natural resources

5. CR & Forestry (cont’d) • Forestry sector provides a great example of variability of CR definitions • Some of the factors that contribute to this variability: • Resource management • Land ownership • Government regulations • Conflicting stakeholder pressures • Different manufactured products

6. Study Objectives • To identify the current understandingof CR in the forestry sector • To identify the recent evolution of CR in the forestry sector • To propose a framework explaining the diffusion of CR into and within forest companies

7. Methods Objectives Method • Current understanding of CR • Recent evolution of CR Content Analysis • Framework explaining the diffusion of CR Grounded Theory

8. Methods – Content Analysis • Content Analysis • “a technique used to study written material by breaking it into meaningful units, using carefully applied rules ”(RCR,2006) • Sustainability Reports • PwC top 100 forest and paper companies • Software: TEXTPACK

9. Result: Frequency Code Text What words to look for Find words in text How many times words appear in text 23 categories (from Tables of Contents): certification to philanthropy Methods – Content Analysis (cont’d) How TEXTPACK works: Dictionary

10. Methods – Grounded Theory • Grounded Theory • a research methodology that allows for the discovery of theory from data (Glaser and Strauss, 1967) • Two countries: Canada & Brazil • 3 to 4 companies in each country • High, medium, and low implementation levels of CR

11. Methods – Grounded Theory (cont’d) • In depth, semi-structured personal interviews • Interviews were coded manually • Objectives of coding procedure: • To identify categories that describe the phenomenon of study • To understand relationship between categories

12. Understanding of CR • 51 companies of the Top 100 • Reports ranged from 2000 to 2005 • Interpretation • Frequency of words indicate the importance of that concept in the CR strategies of each company

13. Sum of frequencies Understanding of CR (cont’d)

14. Evolution of CR • 20 companies from the Top 100 • Reports in both 2000 and 2005 • Categories updated from last analysis

15. Evolution of CR (cont’d) Types of report: • 361 pages in 2000 to 746 pages in 2005

16. Frequency Evolution of CR (cont’d)

17. % Change Evolution of CR (cont’d)

18. Evolution of CR (cont’d) • Words that appeared only in 2005:

19. Results – Grounded Theory • Preliminary results • Two frameworks: • Drivers & evolution of concept within companies • Diffusion of CR to & within companies

20. Stakeholders • Location • Competitors External Drivers Company-external environment interface Internal Drivers Incremental Changes Formal Processes • Company policies • Mission statement • Task forces / work groups / councils • Monitoring performance • CEO • Inside person • Owners’ / founders’ ethics • Company culture Implementation of CR Drivers & Evolution of CR within Companies External Contextual Characteristics Internal Contextual Characteristics

21. Consultants • Inside company person • Other (e.g. union trainer) Formal Processes Adapt Concept Company-external environment interface Setting Priorities What to do, what to diffuse • Company policies • Mission statement • Task forces / work groups / councils • Monitoring performance feedback Determining what’s necessary for diffusion & implementation Planning Standardized behavior Guidelines Control Action Implementation Training Diffusion of CR Entry point of info

22. Key Messages • ‘Sustainable Forestry’ seems to be equated to CR • More balanced approach to CR / sustainability • Social issues are gaining importance, BUT • Environmental issues are still at the core of CR practices • Economic performance from a CR perspective • Perfect balance between all 3 dimensions is unlikely to happen

23. Key Messages (cont’d) • Grounded Theory results suggest that: • CR is implemented through incremental changes • Certification / EMS serve as basis for diffusion of CR • Points that still need to be addressed: • How information flows / diffuses outside of formal processes • Social activities (inside + outside) • Next steps: • identify & test hypotheses

24. References • Responsible Conduct of Research (RCR), 2006. Data Management Glossary. Northern Illinois University, DeKalb, IL. http://www.ori.dhhs.gov/education/products/n_illinois_u/datamanagement/dmglossary.html • Glaser, B.G. and Strauss, A.L., 1967. The Discovery of Grounded Theory: Strategies for Qualitative Research. Aldine de Gruyter, New York.