BUILDING ‘CONNECTIVITY’ WITH
THE LINK BETWEEN ENVIRONMENT AND STRATEGY
Miller, Doctoral Candidate
Ecole des Hautes Etudes Commerciales (HEC)
University of Lausanne
Avenue du Leman 45
Tel/Fax +41 (21) 728.5003
The 1980s witnessed growing concern about the impact of industrial activities on the environment, with public debate focused on issues related to biodiversity, deforestation, pollution, global warming, poverty, the depletion of natural resources, and the need for a new era of environmentally-sound economic development "to ensure that [humanity] meets the needs of the present without compromising the ability of future generations to meet their own needs", one of the original definitions of sustainable development (Brundtland, 1987:8). Accordingly, there has been a broadening vision of a company’s roles and responsibilities beyond profit maximisation, and with this, growing acceptance of the stakeholder model of the firm popularised by Freeman (1984).
In response to stakeholder demands and pressure for improved environmental performance, companies have made varying efforts to 'green' their enterprises, report on their policies and achievements, and incorporate the environmental concerns of stakeholders through different processes of engagement.
Some companies have been more successful than others in building 'connectivity' with their stakeholders on environmental issues. I believe that this is related to the different discursive strategies that have been developed and evolved over time by companies. My proposition is that the constraints on the production of discourse flow from the partially conflicting aims and interests of the framers of the discourse (companies) and the users (stakeholders). Companies that manage these tensions and gaps more successfully are expected to be perceived as producing more acceptable discourses, while those less skilled are expected to produce less acceptable discourses, exacerbating dissatisfaction levels.
In order to come forward with more robust approaches for building 'connectivity' with stakeholders, my research will focus on the Life Sciences sector. The use of biotechnology techniques to develop products and services in agriculture, healthcare, and food processing reached 2.7 billion ecus in Europe in 1997, compared to nearly 16 billion ecus in the United States, according to EuropaBio, the industry’s umbrella organisation in Europe. Currently, enormous resources are being committed within this sector to preserve relations with stakeholders who are wary about perceived risks in relation to the food supply—in the wake of the BSE beef scandal and public hostility in Europe over the introduction of genetically-modified organisms (GMOs). Life Sciences companies are now searching desperately for new strategies to deal with the fall-out in the marketplace and with their key stakeholders.
The Life Sciences sector has come under increasing pressure to disclose information about the risks associated with the use of biotechnology and GMOs. In this respect, the development and use of discursive strategies has been particularly profound. To investigate this phenomenon in more depth, I aim to develop three case studies on companies that have adopted certain strategies and approaches for reporting to and dealing with their stakeholders. The three cases (Novo Nordisk, Novartis, Monsanto) are all drawn from the Life Sciences sector and each is dealing with similar stakeholder issues related to biotechnology, GMOs, and risk.
During the Eighth International Greening of Industry Conference, I will report on initial work in developing these case studies and any preliminary findings.
BUILDING ‘CONNECTIVITY’ WITH
THE LINK BETWEEN ENVIRONMENT AND STRATEGY
The 1980s witnessed growing public concern about the impact of industrial activities on the environment. The United Nations Conference on Environment and Development (later dubbed the Earth Summit) in 1992 in Rio de Janeiro, Brazil, focused world attention on issues related to biodiversity, deforestation, pollution, global warming, poverty, the depletion of natural resources, and the need for a new era of environmentally-sound economic development "to ensure that [humanity] meets the needs of the present without compromising the ability of future generations to meet their own needs", one of the original definitions of sustainable development (Brundtland, 1987:8). Accordingly, there has been a broadening vision of a company’s roles and responsibilities beyond the simple function of profit maximisation, and with this, growing acceptance of the stakeholder model of the firm popularised by Freeman (1984).
In response to stakeholder demands and pressure for improved environmental performance, companies have made varying efforts to 'green' their enterprises, report on their policies and achievements, and incorporate the environmental concerns of stakeholders through different processes of engagement. Some companies have been more successful than others in building 'connectivity' with their stakeholders on environmental issues.
To study this phenomenon in more depth, my research will focus on the Life Sciences sector, which pioneered some of the early efforts in stakeholder engagement and environmental reporting. My research involves the development of multiple case studies on companies dealing with similar stakeholder issues related to biotechnology, GMOs, and risk. Novo Nordisk, the world’s leading producer of industrial enzymes, is a recognised leader in this domain. Despite strong reporting records and a purported openness to stakeholder dialogue, Monsanto, and to a lesser extent Novartis, now appear to have made several mis-steps and are presently mired in controversy over their efforts to introduce genetically-modified products in Europe. In the Life Sciences sector, enormous resources are currently being committed to preserve relations with stakeholders who are wary about perceived risks in relation to the food supply—in the wake of the BSE beef scandal and public hostility in Europe over the introduction of genetically-modified products. Life Sciences companies are now searching desperately for new strategies to deal with the fall-out in the marketplace and with their key stakeholders.
The conventional model of the firm is fashioned on an 'input-output' perspective where, according to Donaldson and Preston, investors, employees, and suppliers contribute inputs for which they expect to receive appropriate compensation. The 'black box' of the firm transforms their inputs into outputs for the benefit of customers. In contrast, they assert, "stakeholder analysts argue that all persons or groups with legitimate interests participating in an enterprise do so to obtain benefits and that there is no prima facie priority of one set of interests and benefits over another" (1995:68).
The idea that companies have stakeholders has now become commonplace, in both the academic literature and business practice. Companies are becoming aware of the ability and power of stakeholders "to influence opinion about the legitimacy of a business or activity, and that stakeholders’ attitudes and opinions would threaten their well being, licence to operate and hence survival e.g., in terms of restrictions on sources of raw materials or methods of operations" (Grafé-Buckens and Hinton, 1998:125). Starik et al (1996) point out that stakeholder involvement has now become a vital part of corporate environmental management and the strategic planning process.
Definitions of who exactly is a stakeholder to the firm abound. The often-cited definition from Freeman’s seminal work suggests that stakeholders include "any group or individual who can affect or is affected by the achievement of an organisation’s purpose" (1984:52). Freeman further put forward the criteria of co-operativeness and competitiveness as ways to distinguish stakeholders, thereby categorising them into 'generic' and 'specific' groups. Noting that such a broad definition leaves the field of possible stakeholders open to include virtually anyone, Carroll asserted that stakeholders are "individuals or groups with which business interacts who have a 'stake,' or vested interest, in the firm" (1993:22). A more narrow definition put forward by Clarkson (1994) conceives of stakeholders as voluntary or involuntary risk-bearers who have invested something of value in the firm.
Mitchell et al observe that narrow definitions are based on a stakeholder’s direct relevance to the firm’s core economic interests, whereas broader definitions are "based on the empirical reality that companies can indeed be vitally affected by, or they can vitally affect, almost anyone" (1997:857). Consequently, they argue that a theory of stakeholder identification is needed that can reliably separate stakeholders from non-stakeholders, and they further contend that a theory of stakeholder salience is needed to explain to whom and to what managers actually pay attention. Following a review of agency, behavioural, ecological, institutional, resource dependence, and transaction cost theories of the firm—Mitchell et al propose a model wherein stakeholders can be identified "based on their possession of power, legitimacy, and urgency in relationship to the firm", and that it is "the firm’s managers who determine which stakeholders are salient and therefore will receive management attention" (1997:871). Accordingly, their typology sets out eight categories of stakeholders that fall into the main classes of: 'latent stakeholders', 'expectant stakeholders', 'definitive stakeholders', and 'non-stakeholders or potential stakeholders'. Given the dynamic nature of reality, they maintain that stakeholders can also move between classes—manifested by a change in their attributes of power, legitimacy, and/or urgency. Therefore, their salience in the eyes of a firm’s managers would also change. Mitchell et al assert that:
…latent stakeholders can increase their salience to managers and move into the "expectant stakeholder" category by acquiring just one of the missing attributes. If the stakeholder is particularly clever, for example, at coalition building, political action, or social construction of reality, that stakeholder can move into the "definitive stakeholder" category (characterised by high salience to managers), starting from any position—latent, expectant, or potential. (1997:879; italics are my emphasis)
I find this typology to be an interesting framework for identifying which stakeholders and what really counts for a firm, and one whose theoretical underpinnings I will utilise in developing my case studies in the field. The idea that stakeholders can move from one category to another based on an ability to come forward with a more powerful social construction of reality is particularly provocative, and links to my use of discourse analysis as a methodological approach to analyse and understand the 'meaning' that companies give to their strategies for dealing with stakeholders.
The ‘Greening’ of Enterprise
Traditionally, and according to the 'input-ouput' view of the firm, stakeholders were seen as employees, investors, and suppliers. This view has broadened significantly to include regulators/legislators, local communities, customers, political groups, industry groups, and even future generations if we consider Bruntland’s definition of sustainable development. While there is not yet agreement on what is 'green' (Miller and Szekely, 1995), numerous tools have been developed (e.g., total lifecycle assessment, environmental impact assessment, design-for-environment, environmental management systems, environmental reviews/audits, etc.) to aid companies in 'greening' their enterprises in response to demands for improved environmental performance and increased corporate accountability.
Scholars have typically depicted corporate efforts to reduce environmental impact and become progressively more environmentally-conscious as a series of stages. Hunt and Auster (1990) proposed five stages on a continuum including: 'beginner', 'fire fighter', 'concerned citizen', 'pragmatist', and 'proactivist'. Roome (1992) put forward a model of five strategic options that companies can adopt in response to external environmental pressures that include: 'non-compliance', 'compliance', 'compliance-plus', 'commercial and environmental excellence', and 'leading edge'. Winsemius and Guntram (1992) identified four development stages of corporate response as: 'reactive', 'receptive', 'constructive', and 'proactive'. Molenkamp (1995) reduced this to three: 'defensive', 'preventive', and 'offensive'. Elkington (1995) described six stages that a company moves through in "finally accept[ing] that the responsibility for tackling these problems is theirs, not something to be pushed onto future generations". Elkington’s stages include: 'ignorance', 'awakening', 'denial', 'guilt reduction/displacement behaviour/ tokenism', 'conversion', and 'integration'.
Mauser (1996) attempted to sort these and other stage models according to the level of integration of environmental issues into company strategies. She concluded that these models are intuitively-based, static, highly ambiguous, and lack practical feasibility. Through their empirical work in the UK water and electricity industries, Schaefer and Harvey also found the stage models of corporate 'greening' to be a poor fit with reality, pointing out that "these models imply a linear, one-dimensional progression on all fronts, whereas in reality the process may be much more multi-faceted" and that these stage models are "initially attractive but ultimately limited heuristics" (1998:116). Moreover, they contend that much of what has been written about corporate 'greening' is highly prescriptive, intended to "motivate and persuade managers to take environmental issues seriously and guide them in reducing the environmental impact of their business, but this may not coincide with the way in which the 'greening' process occurs in practice…" (1998:116).
Over the past decade, a growing number of primarily multinational companies have put increasing efforts on engaging stakeholders and doing environmental reporting alongside their traditional financial reporting efforts. Such reporting has been done most commonly through the publication of a standalone corporate environmental report (CER) on a moreorless annual basis, although recent advances in information technology have led many companies to include information about their environmental performance and stakeholder dialogue activities on corporate web sites and/or make information publicly available in CD Rom format.
The first companies to begin publishing CERs in the 1980s did so in response to requests for information and/or pressure for disclosure from various stakeholders—internally (employees, Board members, shareholders) and externally (regulators, customers, suppliers, ‘green’ groups, lenders, insurers, media). Mainly 'green glossies', the early CERs offered primarily good news stories, photos of outdoor scenes and employees working together, and statements from the Chief Executive Officer on the company’s broad commitment to protecting the environment. Companies like Dow Europe and Polaroid were seen as corporate pioneers pushing the envelope on what to include in these voluntary reports (Frankel, 1993; Naimon, 1994).
By 1993/94, CERs were featuring more graphs than photographs; various reporting formats were being put forward (by the World Industry Council for the Environment, the European Chemical Industry Council—CEFIC, the World Resources Institute, the Canadian Institute of Chartered Accountants, and the Canadian National Round Table for the Environment and the Economy, among others); and major business-led initiatives were underway (by the International Chamber of Commerce in Paris, which created 16 principles underlying the ICC Business Charter for Sustainable Development; the Global Environmental Management Initiative in Washington, which began promoting GEMI’s Environmental Self-Assessment Programme; the US-based Public Environmental Reporting Initiative, which produced the PERI guidelines; and the Coalition for Environmentally Responsible Economies, which published the CERES Principles to guide corporate reporting practices).
Industry associations, non-industry groups, governments, consultants, academic researchers, and individual companies are all working in this field—offering up various reporting approaches and experimenting with numerous environmental performance metrics and indicators that can gauge the 'ecological footprint' of companies and products and be useful to and accepted by both companies and CER users. The Geneva-based World Business Council for Sustainable Development (a coalition representing some 120 international companies) is among the most recent organisations to join the fray, promising to make available in 1999 a harmonised set of cross-cutting 'eco-efficiency metrics' that it believes "will allow for comparisons and benchmarking over time and across products, companies, and industry sectors" (WBCSD, 1998). The concept of 'eco-efficiency', with its emphasis on enhancing both the eco-nomic and eco-logical aspects of company performance, has found great favour across the business community. The idea of reducing business costs through reducing environmental impact (minimising waste, saving water and energy, reducing materials use, etc.) holds particular appeal for many companies who see this as the main contribution that business can make to sustainable development.
Presently, some 600 companies are publishing CERs, and the standards for reporting continue to ratchet upwards as companies become more experienced in reporting and as expectations regarding the disclosure of environmental policies, data, targets, and achievements continue to rise. Organisational learning and peer competition have been major drivers for companies to produce CERs of increasing sophistication, compared to the earlier, sometimes, quite clumsy efforts.
According to the Industry and Environment Office of the United Nations Environmental Programme (UNEP), which began in 1993 to develop a common international framework for corporate environmental reporting, "environmental reporting demonstrates the wish of companies to be transparent and accountable, coupled with a commitment to embark on the continuous improvement cycle" (SustainAbility and UNEP, 1997:3). But some companies report simply in order to comply with government legislation. For example, the Toxic Release Inventory requires US-based companies to report on the use of more than 600 specified chemicals. Canada has similar legislation in place. Denmark’s 1995 law requires companies to produce 'green accounts'. The European Union’s Eco-Management and Audit Scheme (EMAS), in place on a voluntary basis since 1993, requires registered companies to produce an environmental statement. Sweden, the Netherlands, and New Zealand are each developing mandatory environmental reporting schemes. Certain industry sectors—typically in sensitive, resource-based sectors that have long been the target of green groups—have launched voluntary environmental management and reporting efforts, most notably Responsible Care (the chemicals industry) and Sustainable Forestry Principles (pulp and paper).
Some companies, however, have been pressed into reporting for competitive reasons and the need to finally follow pioneering peers that have set the benchmark for environmental reporting and been positively recognised for such efforts. Reporting companies point to numerous benefits and motivations, ranging from an "enhanced ability to track progress against specific targets" (Akzo-Nobel) to "improved all-round credibility from greater transparency" (Noranda) to "greater awareness of broad environmental issues throughout the organisation " (Glaxo Wellcome) to the "ability to communicate company’s efforts and standards" (Novartis) to, in the case of The Body Shop, helping build the company’s "licence to operate and campaign" (SustainAbility and UNEP, 1998:8).
Yet other companies do not publicly report at all about their environmental or social activities—pointing variously to the lack of pressure to report, difficulties in gathering relevant data, lack of indicators, lack of clarity and consistency in reporting standards, and the lack of consensus regarding best practice environmental reporting (Elkington et al, 1998). But ultimately, "a 'good' reporting record does not necessarily imply 'good' environmental performance. Nor, on the other hand, does non-reporting or 'bad' reporting imply 'bad' performance" (SustainAbility and UNEP, 1997:3).
Recently, a few companies have begun to move towards 'sustainability reporting'. In addition to doing financial reporting (a legal requirement) and reporting on environmental performance (becoming a mainstream practice for large companies), companies are also being invoked to do social accounting and reporting (Gladwin et al, 1995; Gray, 1996; Welford, 1997; Zadek et al, 1997; Van Dijk and Elkington, 1998). If sustainable development is made up of economic, environmental, and social aspects—then, the argument goes, companies need to be oriented towards the 'triple bottom line' and report on economic, environmental, and social commitments, targets, and performance (Elkington, 1998). The Body Shop’s 218-page 1997 Values Report is one of the few examples of this newly-emerging phenomenon. In an effort to standardise social performance and reporting, the US-based Council on Economic Priorities (CEP) has developed SA8000 as a global system of standards that companies can use to monitor their social accountability, and CERES has spearheaded the Global Reporting Initiative (GRI), aimed at providing guidelines to companies for preparing sustainability reports that it hopes will be relevant and useful to a range of critical stakeholders.
In surveying 31 companies as to their motivations for engaging stakeholders, Grafé-Buckens and Hinton (1998) found three primary reasons for such efforts; namely: to inform stakeholders of the company’s activities (e.g., by producing corporate environmental reports or other 1-way processes where the company provides stakeholders with information); to consult with stakeholders (e.g., by using feedback slips or reply cards where there is a 1-way flow of information from stakeholders back to the company); and to have stakeholders actively participate in the business (involving a continual process of evaluation and re-evaluation where stakeholders play an active role). Grafé-Buckens and Hinton found that the primary aim for the researched companies to undertake environmental stakeholder initiatives was:
…to change their public images and provide their stakeholders with information about their corporate environmental impacts and managements. While they recognise the need to understand the stakeholder’s core values and concerns, the method of consultation was still passive, being mostly an embryonic dialogue through limited feedback and comments e.g., reply cards… (1998:128).
Attempts to assess, evaluate, rank, and compare environmental reporting efforts, and specifically CERs, have been underway virtually since the appearance of this phenomenon. Early approaches relied on categorising and characterising the different styles of environmental reporting. Other efforts focused on constructing a set of categories and evaluating CERs against a list of 'reporting ingredients' or features that could be included in an environmental report with the end result typically being a matrix that compares companies, irrespective of sector (see Deloitte Touche Tohmatsu International et al, 1993; Naimon, 1995). The implicit assumption is that companies lacking certain features are possibly deficient in their reporting efforts.
Following the staged approach for classifying the 'greening' of enterprise, in 1994, SustainAbility and UNEP published a 5-stage reporting model, which was received with wide interest from industry and policy-makers alike who were searching for a common framework for environmental reporting. This model was put forward as a practical tool and typology for distinguishing the different levels of reporting, ranging from Stage 1 'green glossy' to Stage 5 'sustainability reporting', which purported to identify the key elements required for a genuine sustainability report. The five stages were evaluated according to 50 equally-weighted criteria intended to measure the comprehensiveness of reporting and give a simple overview of a company’s progress towards sustainable development reporting, irrespective of its industrial sector. Companies were ranked against five main clusters of criteria: 'Management Policies and Systems', 'Inputs and Outputs', 'Finance', 'Stakeholder Relations and Partnerships', and 'Sustainable Development'. Recently, efforts have been more focused on benchmarking corporate environmental policies and reports of companies operating in the same sector (see Krut and Munis, 1998).
These types of assessment approaches have led to numerous criticisms of CERs that focus on the lack of comparability: across sectors, among companies within the same industry; among companies of differing sizes; among companies operating in different parts of the world, over time; and across products. Another criticism relates to limited quantification. The 'output' side (emissions) invariably receives the most attention in CERs, with sometimes detailed data reported at several levels of company operations although typically only according to what is legally required. By contrast, often only rudimentary, limited, or incomplete information is reported on ‘inputs’ (raw materials). Moreover, few companies make real efforts to quantify their impact across the lifecycle ('from cradle-to-grave') nor their contribution to known environmental effects like global climate change, ozone depletion, acidification, eutrophication, and nitrification (Miller, 1998).
The lack of standardisation is another common complaint among CER users. While the experimentation and innovations in reporting have been applauded, the absence of standards has led to an overwhelming diversity in reporting formats, the choice of units, boundaries for reporting the data (on both time and geographic variables), the use of metrics, methods for normalising data, the level of aggregation, and verification. Current verification practices are, in fact, quite controversial as the methods being used are fairly loose and verifiers rely mainly on voluntary disclosures from companies. By contrast, in the parallel world of corporate financial reporting, third party verification has evolved a universal terminology and follows rigidly prescribed practices. To date, there is no clear agreement on what environmental verification should consist of nor who should do the verifying. Verifiers have signed off variously on companies’ environmental management systems (Baxter’s 1997 CER), data collection and collation (the 1996 CERs of British Petroleum, GlaxoWellcome, Novo Nordisk), overall environmental performance (Neste’s 1997 CER), and even simply the methods used to calculate pollution indices (Rhone-Poulenc’s 1997 CER).
The traditional approaches to evaluating corporate environmental reporting efforts have resulted in numerous classifications, typologies, taxonomies, and comparisons of CERs. These approaches have also succeeded in identifying major areas of user dissatisfaction, motivating numerous efforts to make improvements. But in a world of stakeholders seen to be "simultaneously data-hungry and data-averse" (Birchard, 1994), companies seem destined to fall short.
My contention is that the focus on evaluating and improving CERs is obscuring a larger issue; namely, strategy and the extent to which a company must 'connect' with its stakeholders to support strategy.
Some companies have been more successful than others in building 'connectivity' with their stakeholders on environmental issues. I believe that this is related to the different discursive strategies that have been developed and evolved over time by companies. My proposition is that the constraints on the production of discourse flow from the partially conflicting aims and interests of the framers of the discourse (companies) and the users. (stakeholders). Companies that manage these tensions and gaps more successfully are expected to be perceived as producing more acceptable discourses, while those less skilled are expected to produce less acceptable discourses, exacerbating dissatisfaction levels.
In order to test out these assertions and come forward with more robust approaches for building 'connectivity' with stakeholders, my research will focus on the Life Sciences sector. Life Sciences companies were among the early experimenters with environmental reporting in response to stakeholder pressures for disclosure about corporate environmental performance and improvement efforts. The Life Sciences label refers to the convergence of chemicals, pharmaceuticals, agriculture, and biotechnology. A pioneer in embracing the life sciences banner, Monsanto’s strengthening of businesses in this sector has been emulated by other chemical powerhouses, including Bayer, DuPont, Hoechst, Novartis, and Rhône Poulenc, to name but a few. According to EuropaBio, total life science sales for all companies using biotech techniques to develop products and services in agriculture, healthcare, and food processing reached 2.7 billion ecus in Europe in 1997, compared to nearly 16 billion ecus in the US.
The Life Sciences sector is currently facing an enormous challenge in Europe to gain public acceptance of biotechnology and particularly the use of genetically-modified organisms (GMOs). Responding to citizen concerns about safety, risk, and liability, in 1997, Austria and Luxembourg banned the import and cultivation of Novartis’ genetically-modified maize, sparking fear throughout the industry of further offensives to curb the introduction of biotechnology, which would lay waste to mammoth corporate investments in R&D, product development, and marketing. In mid-1998, the French government announced a 2-year moratorium in advance of the revision of EU Directive 90/220, which concerns the deliberate release of GMOs into the environment. Other European Union member states have similarly justified putting on the brakes on the basis of the 'precautionary principle', calling for further research into the potential effects of biotechnology and risks to human health and the environment.
To date, public acceptance of GMOs tends to be restricted to healthcare (Milmo, 1999) and to the application of biotechnology to develop enzymes for a new generation of cleaning products "because the contribution of these new products to reduce the usage of chemicals, energy, and water is evident" (Verrips, 1999). Acceptance of genetically-modified agricultural products, on the other hand, remains extremely low in Europe, on the heels of the BSE controversy and growing public concerns about the safety of the food supply. Following the lead of Sainsbury, the UK’s largest supermarket chain, major fast-food outlets McDonalds and Burger King promised the British public in April 1999 that they would eliminate genetically-modified foods and ingredients from their product lines. This move sounded alarm throughout the Life Sciences industry and its value chain.
In addition to the possibility for bringing increased economic growth to Europe, the industry points to the potential of biotechnology for enhancing agricultural productivity and the "contributions to meeting future world food demand while preserving biodiversity, the sustainability of the world’s land and water resources, and improving standards of living" (Bamelis, 1999:53). Seeds endowed with genes from bacteria and other organisms can be resistant to insects and chemical weed killers, reducing the need for insecticides, herbicides, and erosion-promoting tilling. Friends of the Earth, one of many environmental groups opposed to genetically-modified crops (GM crops), says their fears are related to "cross-fertilisation with wild relatives, increased use of broad-spectrum total herbicides, toxicity of insect-resistant GM crops to beneficial insects, loss of biodiversity, [and] health risks of antibiotic-resistant marker genes" (Lacroix, 1999:52).
Ammann describes the context in which the current debate between industry and its critics is taking place:
…every new technology provokes questions, which can only be answered on a long term basis… It is unfortunate that the debate often lacks scientific argumentation based on the facts which are already known today. There are too many people participating in the debate who do not follow these principles: On the industry side, there are those shareholder representatives, who bluntly declare the technology to be safe, without caring too much about facts. And even worse: they do not take serious the fears of a broad public. And on the side of the protest industry, too many representatives do not pay attention enough on scientific facts, which have already been found and published. And even worse: some tend to abuse scientific language by distorting the facts, omitting positive messages built on scientific data… (1999).
The Life Sciences sector has come under increasing pressure to disclose information about the risks associated with the use of biotechnology and genetically-modified organisms. In this respect, the development and use of discursive strategies has been particularly profound.
To investigate this phenomenon in more depth, I aim to develop three case studies on companies that have adopted certain strategies and approaches for reporting to and dealing with their stakeholders:
Novo Nordisk - As the world’s leading producer of industrial enzymes, this Danish company has been reporting since 1994 and has been highly commended (and recognised through numerous awards) for its environmental leadership, reporting, openness, and stakeholder dialogue.
Novartis - Reporting since 1997 (following the merger of Ciba and Sandoz, each with a long history of stakeholder engagement and reporting), this Swiss company has developed an extensive internal information system to provide managers with support on Issues, Crises, and Advocacy. Recently, its Seeds Division has been at the heart of the controversy regarding biotechnology and GMOs, and is leading the company in its approach for dealing with stakeholders on these issues.
Monsanto - Reporting since 1991 and guided by seven sustainability teams of external advisors, this American company sparked controversy in Europe with an ill-advised US$1.6 million communications campaign in 1998 to alter the perceptions of a public grossly opposed to GMOs in foodstuffs. Numerous environmental pressure groups, like Greenpeace, Friends of the Earth, and Corporate Europe Observatory, have since launched vigorous campaigns to block Monsanto’s marketing of genetically-modified products in Europe. In the US, Monsanto’s strategies and activities in this area have been less scrutinised.
I have chosen to develop multiple case studies (as opposed to a single case study) because I believe that understanding these will "lead to a better understanding, and possibly better theorizing, about a still larger collection of cases" (Stake, 1998:89). The three cases are drawn from the same industry sector, and the three companies are each dealing with similar stakeholder issues related to biotechnology, GMOs, and risk. During the Eighth International Greening of Industry Conference, I will report on initial work in developing these case studies and any preliminary findings.
Ammann, K. (1999) The Way Ahead, Director of the Bern University Botanical Gardens, paper presented in the European Voice Conference on Genetically-Modified Organisms: Striking the Right Balance (18 March 1999, Brussels)
Bamelis, P. (1999) 'Making Europe a World Leader',
The European Union in 1999,
Brussels: European Voice
Birchard, B. (1994) 'The Latest and Greatest
Environmental Measures', Tomorrow,
Vol. VI, No. 3, Stockholm: Tomorrow
Brundtland, G. (1987) Our Common Future, World Commission on Environment and Development, Oxford University Press
Carroll, A.B. (1993) Business and Society: Ethics and Stakeholder Management, Cincinatti: South-Western
Clarkson, M. (1994) A Risk-Based Model of Stakeholder Theory, Proceedings of the Second Toronto Conference on Stakeholder Theory, Toronto: Centre for Corporate Social Performance and Ethics, University of Toronto
Deloitte Touche Tohmatsu International, International
Institute for Sustainable Development, and SustainAbility (1993) Coming
Clean: Corporate Environmental Reporting, Opening up for Sustainable
London: Deloitte Touche Tohmatsu International
Donaldson, T. and L. Preston (1995) 'The Stakeholder
Theory of the Corporation: Concepts, Evidence, and Implications', Academy of
Vol. 20, No 1, pp. 65-91
Elkington, J. (1994) 'Towards the Sustainable Corporation: Win-Win-Win Business Strategies for Sustainable Development', California Management Review, Winter, pp. 90-100
Elkington, J., N. Kreander, and S. Fennell (1998) 'Targeting the Non-Reporters', Tomorrow, Vol. VIII, No. 5, Stockholm: Tomorrow
Elkington, J. (1998) Cannibals with Forks: The Triple Bottom Line of 21st Century Business, Gabriola Island: New Society
Frankel, C. (1993) 'Environmental Communications Without the Tears', Tomorrow, Vol. III, No. 4, Stockholm: Tomorrow
Freeman, R. E. (1984) Strategic Management: A Stakeholder Approach, Boston: Pitman
Gladwin, T., T.S. Klause, and J.K. Kennelly (1995) 'Shifting Paradigms for Sustainable Development: Implications for Management Theory and Research', Academy of Management Review, Vol. 20, No. 4, pp. 874-907
Grafé-Buckens, A. and A. Hinton (1998) 'Engaging the Stakeholders: Corporate Views and Current Trends', Business Strategy and the Environment, Vol. 7, pp. 124-33
Gray, R. (1996) 'Corporate Reporting for Sustainable Development: Accounting for Sustainability in AD2000', in R. Welford, R and R. Starkey, eds. The Earthscan Reader in Business and the Environment, London: Earthscan, pp. 173-196
Hart, S. (1997) 'Beyond Greening: Strategies for a Sustainable World', Harvard Business Review, January-February, pp. 67-76
Hunt, C.B. and E.R. Auster (1990) 'Pro-active Environmental Management: Avoiding the Toxic Trap', Sloan Management Review, Winter, pp. 7-18
Krut, R. and K. Munis (1998) 'Sustainable Industrial
Development: Benchmarking Environmental Policies and Reports', Greener
Spring, No. 21, Sheffield: Interleaf
Lacroix, G. (1999) 'Risking a Return to the Silent
Spring', The European Union in 1999,
Brussels: European Voice
Mauser, A. (1996) The Integration Process of Environmental Issues in Company Strategies, paper presented in the Fifth International Research Conference of the Greening of Industry Network, 25-27 November 1996, Heidelberg, Germany
Miller, J. (1998) The Application of Sustainable Development Concepts and Eco-Efficiency Metrics in Corporate Environmental Reporting: Report on Current Practice. Prepared for the World Business Council for Sustainable Development. Geneva: WBCSD
Miller, J. and F. Szekely (1995) 'What is ‘Green?', Environmental Impact Assessment, Vol. 15, No. 5, New York: Elsevier Science
Milmo, S. (1999) 'German Biotech Comes of Age', CMR Focus, 10 May 1999
Mitchell, R., B. Agle, and D. Wood (1997) 'Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts', Academy of Management Review, Vol. 22, No. 4, pp. 853-86
Molenkamp, G. (1995) De Verzakelijking van het Milieu: Onomkeerbare Ontwikkelingen in het Bedrifsleven, Den Haag: Institute for Environmental Management, University of Amsterdam and KPMG
Naimon, J. (1994) 'Lifting the Veil', Tomorrow, Vol. IV, No. 1, Stockholm: Tomorrow Publishing
Naimon, J. (1995) 'Corporate Reporting Picks Up Speed', Tomorrow, Vol. V, No. 1, Stockholm: Tomorrow Publishing
Roome, N. (1992) 'Developing Environmental Management Strategies', Business Strategy and the Environment, Vol. 1, pp. 11-24
Schaefer, A. and B. Harvey (1998) 'Stage Models of Corporate Greening: A Critical Evaluation', Business Strategy and the Environment, Vol. 7, pp. 109-23
Schmidt-Bleek, F. (1993) 'MIPS Revisited', Fresenius Environmental Bulletin, Vol. 2, No. 8, pp. 407-12
Stake, R. E., (1998) 'Case Studies' in N. Denzin and Y. Lincoln (1998) Collecting and Interpreting Qualitative Materials, Thousand Oaks: Sage Publications
Starik, M., G. Throop, J. Doody, and M.E. Joyce (1996) 'Growing an Environmental Strategy', Business Strategy and the Environment, Vol. 5, pp. 12-21
SustainAbility and UNEP (1998) Engaging Stakeholders: The Non-Reporting Report
SustainAbility and UNEP (1997) Engaging Stakeholders: The 1997 Benchmark Survey (3rd International Progress Report on Company Environmental Reporting)
SustainAbility and UNEP (1996) Engaging
Stakeholders: The Benchmark Survey
(2nd International Progress Report on Company Environmental Reporting)
SustainAbility and UNEP (1994) Company Environmental Reporting: A Measure of the Progress of Business and Industry Towards Sustainable Development
Van Dijk, F. and J. Elkington (1998) Social Reporting: Sustainability’s Final Ascent or a Slippery Slope?, Abstract of paper to be presented in the Seventh International Research Conference of the Greening of Industry Network, 15-18 November 1998, Rome, Italy
Verrips, C.T. (1999) A View of the Foods Industry
on Genetically-Modified Food Products, Unilever Research Group, paper
presented in the European Voice Conference on Genetically-Modified Organisms: Striking
the Right Balance
(18 March 1999, Brussels)
Wackernagel, M. and W. E. Rees (1998) Our Ecological Footprint: Reducing Human Impact on the Earth, Gabriola Island: New Society
Welford, R. (1997) Hijacking Environmentalism, London: Earthscan
Winsemius, P. and U. Guntram (1992) 'Responding to the Environmental Challenge', Business Horizons, March/April, pp. 12-20
World Business Council for Sustainable Development (1998) Eco-Efficiency Metrics and Reporting, Eco-Efficiency Brief, No. 1, June, Geneva: WBCSD
Zadek, S., P. Pruzan, and R. Evans, eds. (1997) Building Corporate Accountability: Emerging Practices in Social and Ethical Accounting, Auditing and Reporting, London: Earthscan
 Bovine spongiform encephalopathy, a bizarre brain disease that began killing cattle in the UK in 1986, was subsequently linked to a human form of 'mad cow' disease, Creutzfeldt-Jakob disease. The UK government’s inept handling of the episode led to a trade ban on British beef exports in 1998, punitive duties and retaliatory measures by major trading partners, and a severe loss of public confidence in the safety of the food supply in Europe.
 As most people are not yet skilled Internet users and many countries are still building up their Internet infrastructures, it is expected that companies will continue to produce printed CERs for the foreseeable future.
 Hart (1997) defined an ecological footprint as the amount of land (referring to resource consumption and energy used and the industrial, toxic, and other waste created) involved in meeting a typical consumer’s needs—asserting that the developed economies have significantly larger ecological footprints than undeveloped economies. The concept of an ecological footprint is further elaborated by Wackernagel and Rees (1998). Alternatively, Schmidt-Bleek (1994) of the Wuppertal Institute uses the concept of 'ecological rucksack' to reflect all materials used and moved for the production of products over the entire value chain from cradle to the finished product.
 In 1997, the model was revised because "too many companies were beginning to bunch together in Stage 4". A minor emphasis on Report Design and Accessibility was added to the five main clusters. Of the 194 points available under the ranking system, The Body Shop, the recognised front-runner in environmental and social reporting, was awarded 131 points under the evaluative scheme in 1997, followed by Baxter at 102 points (SustainAbility and UNEP, 1994, 1996, 1997).
 The notion of 'connectivity' and the link to supporting a company’s strategic objectives was exposed through discussion in December 1998 with Robert Abbott, President of Abbott Strategies and PhD Candidate at Simon Fraser University (Vancouver, Canada).
 Based in Brussels, the European Association for BioIndustries represents 45 multinational corporate members and 14 national associations (including some 600 small- and medium-sized enterprises) and is one of the industry’s most active lobbying bodies in Europe.