UPTEC F 20018
Examensarbete 30 hp
Juni 2020
Conversion to a fossil free
industry
Investigating certifications as motivators
for pro-environmental initiatives
Teknisk- naturvetenskaplig fakultet UTH-enheten Besöksadress: Ångströmlaboratoriet Lägerhyddsvägen 1 Hus 4, Plan 0 Postadress: Box 536 751 21 Uppsala Telefon: 018 – 471 30 03 Telefax: 018 – 471 30 00 Hemsida: http://www.teknat.uu.se/student
Abstract
Conversion to a fossil free industry
Jacob Vinnars, Johan Vinnars, Emma Buratovic
Climate awareness is growing every day and pressure and expectations of powerful measures from companies are increasing. At the same time, the incentives for many companies to address climate change are small due to limited economic benefits. This master thesis will therefore examine how external certificates that address carbon neutrality can act as a
motivator for more sustainable environmental initiatives. The work will also examine the important success factors that exist regarding the design of environmental certificates. The study was conducted through qualitative semi-structured interviews with representatives from several large companies and pro-environmental organizations. Through a detailed analysis, the results showed that an external certificate can strengthen a company's legitimacy and competitiveness, which in previous studies have proven to be motivators for increased environmental initiatives. The certificate itself cannot, however, be seen as a motivator. The conclusion further showed that a global standard is more sought after than a certificate. The study also resulted in the identification of three cornerstones for a successful certificate. These are: working with a credible NGO to achieve high credibility, base all criteria on
research, and take into account the views of the industry. Three separate in-depth technical advancement studies have also been carried out and are presented separately in the appendix.
ISSN: 1401-5757, UPTEC F 20018 Examinator: Tomas Nyberg
i
Populärvetenskaplig sammanfattning
I takt med en ökad klimatmedvetenhet har uppmärksamheten kring förhöjda CO2-nivåer
och global uppvärmning kraftigt stigit. Intresset för att lösa klimatkrisen blir allt större, samtidigt konsumerar vi mer än någonsin. Det ställer stora krav på dagens produktion som till stor del fortfarande är kraftigt fossilberoende. För att få bukt på den ständigt ökande globala uppvärmningen krävs åtgärder för att ställa om produktionsindustrin till fossilfritt. I dagsläget saknas det incitament att driva denna förändring från företagen då det ofta bedöms vara för riskfyllt, och man bedömer att det sällan ger tillräckligt stora ekonomiska fördelar. Den här uppsatsen kommer därför undersöka om ett externt certifikat kan agera som en motivator för hållbara miljöinitiativ och beslut. Vidare kommer uppsatsen undersöka vilka olika framgångsfaktorer som finns gällande design och utformning av externa certifikat. Studien inleds med en omfattande teori och litteraturstudie. Här presenteras tidigare forskning som gjorts inom området. Inledningsvis läggs stor fokus på en studie publicerad av Bansal and Roth som behandlar olika motivationsfaktorer för hållbara initiativ inom flertalet industrier. Vår studie grundar sig till stor del i deras motivationsmodell. Vidare tas studier gjorde av González‐ Benito och även Meyer & Rowan upp, som bland annat behandlar företagslegitimitet. Det empiriska materialet har samlats in genom en kvalitativ metod bestående av semistrukturerade intervjuer. Totalt har 10 intervjuer hållits, med representanter från 4 stora företag och 6 olika miljöorganisationer och certifieringsorgan. Samtliga intervjuer har spelats in och transkriberats. Därefter har så kallad kodning utförts för att underlätta analysarbetet.
Vår empiri och analys visade att även om en väletablerad certifiering skulle kunna förbättra ett företags legitimitet och konkurrenskraft, som har visat sig vara stora motivatorer för hållbart ansvar, sågs själva certifieringen inte som en motivator för hållbara miljöinitiativ. Intervjuerna visade också att ett certifikat som behandlar koldioxidneutralitet inte var specifikt efterfrågat, utan snarare en internationell standard för att mäta koldioxidutsläpp.
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Contributions
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Table of contents
1. Introduction ... 1 1.1. Background ... 2 1.1.1. Definition of concepts ... 3 1.2. Problem ... 3 1.3. Purpose ... 4 1.3.1. Research questions ... 5 1.4. Scope ... 5 1.5. Outline ... 5 2. Theory ... 7 2.1. Ecological responsiveness ... 7 2.1.1. Issue salience ... 8 2.1.2. Field cohesion ... 9 2.1.3. Individual concern ... 9 2.1.4. Legitimation ... 9 2.1.5. Competitiveness ... 11 2.1.6. Social responsibility ... 132.2. Rational choice theory ... 14
2.2.1. Decision-making under time pressure ... 15
2.2.2. Norm-activation theory ... 15
2.3. Value in decision-making & risk ... 16
2.3.1. Evaluating timing and irreversibility in investments ... 17
2.3.2. Financial risk and investments ... 18
2.4. Environmental, instrumental and symbolic motives ... 19
2.5. How to build credibility ... 19
2.6. Global standards ... 20
3. Method ... 22
3.1. Ontological consideration ... 22
3.2. Epistemological consideration ... 22
3.3. Scientific approach ... 23
3.4. Choice of research strategy ... 23
3.5. Interviews ... 24
3.5.1. Interview guide ... 24
3.6. Selection of study objects ... 25
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3.7. Data sampling and analysis of data ... 27
3.8. Method criticism ... 28
3.9. Reliability & validity ... 28
3.10. Ethical aspects ... 29
3.11. Limitations ... 29
4. Empirical study ... 31
4.1. Certification organizations ... 31
4.1.1. Incentives & motivators ... 31
4.1.2. Design ... 34
4.1.3. Geography ... 37
4.1.4. Success factors ... 37
4.1.5. Problems ... 38
4.1.6. Sales and financial benefits ... 42
4.1.7. Focus on climate impact ... 43
4.2. Industry ... 43
4.2.1. Motivators ... 44
4.2.2. Innovation ... 45
4.2.3. Standards ... 47
4.2.4. Legitimation ... 48
4.2.5. Added value and sales ... 49
4.2.6. Problems, issues & complications ... 51
5. Analysis ... 53
5.1. Environmental work as means for differentiation and added value ... 53
5.1.1. Environmental work as means of competition ... 53
5.2. Engaging in new innovations and environmental efficiency projects ... 56
5.3. Catalysts and big corporations ... 58
5.4. The geographical aspect ... 58
5.5. Building credibility ... 59
5.5.1. Legitimation within corporations ... 59
5.6. Impact value versus symbolic value ... 61
5.7. Importance of standards ... 61
5.8. Politics ... 62
6. Discussion ... 64
6.1. Financial risk ... 64
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6.3. The relationship of actual impact and symbolic actions ... 65
6.3.1. The knowledge gap between consumers and industries ... 66
6.4. Certifications as a mediator for change ... 66
6.5. Certification width or niche ... 67
6.6. Model for development of environmental certificate ... 69
6.7. Limitations ... 70
6.8. Future research ... 70
6.9. Conclusion ... 71
7. References ... 73
1
1. Introduction
The attention regarding climate change, high CO2-levels and increasing global
temperatures has risen to the surface in the last couple of years. It has sparked several global movements trying to address this problem, where some well-known actions including the Paris Agreement, the 17 Sustainable Development Goals and the Greta Thunberg movement (CBBC, 2019; UN, 2020; UNFCCC, 2015). The interest of solving the problem have increased continuously, where the global investments in renewable energy sources have grown with $2.6 trillion dollars between 2010 and 2019. Statistics show however that investments decreased with 12% globally between 2017 and 2018 (UNEP, 2019).
Even with large investments in renewable energy sources, the energy related carbon emissions are still at an all-time high, and has increased with 1.6% in 2017 from the year before, 2.7% in 2018 and 0.6% in 2019 (Carbon Brief, 2019, 2018). The International Renewable Energy Agency stated in a report from 2019 that the conversion from using fossil fuels to renewable fuels need to accelerate tremendously to be able to meet the global carbon emission goals and restrictions of not exceeding a 2°C global temperature increase (IRENA, 2019a). Today’s actions are not sufficient to reach the goals, where trajectories show that the carbon emissions will keep on rising well above allowed and manageable limits (ibid.).
The manufacturing industry is still to a large extent almost entirely dependent on fossil fuels and raw materials. It consumes about 30% of all energy and also account for one third of all carbon dioxide emissions (EIA, 2019). Previously, renewable energy sources were difficult to justify from an economic perspective due to risk, cost and insufficient technologies. But with advances in research in a variety of environmental technical alternatives, there are now several renewable energy sources that are cost competitive, some even cheaper, than fossil fuels (IRENA, 2019b). Despite the shorter repayment periods, industrial companies do not invest enough to significantly reduce their carbon emission. To reach the global environmental goals, the shift from fossil fuels to renewable energy sources becomes essential, which in practice is more complicated than what meets the eye.
2 “competent to practice” within a specific area (Cambridge Dictionary, 2020; NCME, 2017). Today there are several certifications resulting in ecolabels that are displayed towards customers. From Fair Trade coffee to FSC certified wood, certifications can offer positive changes within industries, where the certification can be seen as a competitive advantage or as a tool to increase legitimacy (Bansal and Roth, 2000; González‐Benito and González‐Benito, 2005; Walenta, 2015). Certifications addressing carbon neutrality or carbon reduction are on the rise, but have also been a subject of mistrust and lacking incentives (Birkenberg and Birner, 2018). With the development of carbon emission awareness, climate protection ecolabels are thought to have a growing importance for the future (ibid.), offering improvements in business performance (Walenta, 2015). And while certifications addressing other problematic areas, showing sales increases, higher revenues and more stable markets (Dragusanu and Nunn, 2018; Ruben and Fort, 2012; Walenta, 2015), there is still a lack of understanding for how a carbon neutrality certificate could potentially motivate and affect companies and whole industries.
1.1. Background
The thesis was carried out in collaboration with the company Absolicon Solar Collector AB (hereafter referred to as Absolicon). Absolicon manufactures concentrated solar collectors specially adapted for industries requiring heat with temperatures up to 160°C. The solar collector Absolicon T160 has been tested by the State Testing Agency in Borås, patented and covered by guarantees that are specially adapted for each business. The T160 has also been tested by SPF in Switzerland and has since February 2019 as the first concentrating, solar-powered solar collector in the world, the quality certification Solar Keymark. The T160 has the highest measured optical efficiency at 76% ever achieved for a small parabolic trough in commercial production (Absolicon, 2020). The company was founded in 2007 and started work on full-scale prototypes, with the support of the Swedish Energy Agency. At present, Absolicon has about 20 employees and was listed on the stock exchange spotlight in 2016. The company has grown in recent years and established itself in several new world markets, covering Africa, Asia, South America and Europe.
3 not the case. The situation they now face is that industries seem to lack incentives for investments in renewable energy sources. The problem is speculated to be based on that industrial companies experience a lack of credibility and transparency in sustainable decisions vis-à-vis end consumers. Absolicon wants to investigate what motivators can influence firms for sustainable environmental initiatives. In the long term, they want to explore the possibilities for a carbon neutrality certification and thus want to identify different success factors for pro-environmental certification.
1.1.1. Definition of concepts
To better understand the content and usage of terminology, some clarifications regarding definitions follow.
1.1.1.1. Environmental certification, certificates and labels
An environmental certificate is a standardized proof of attestation, demonstrating that a company, product or event follows regulations and protocols for a specific certification. The certification organ or services have predefined parameters and regulations for obtaining such certification that are voluntary for companies to obey. Certification services commonly use a logo, often referred to as an ecolabel, that can be displayed on products towards the end consumer, demonstrating that regulated standards are met. To be able to receive an ecolabel on a product, the product must comply with the certification standards. Thus, labels are more commonly used on a Business-to-Consumer setting, and certifications in Business-to-Business relations (Nebel et al., 2005; Thompson et al., 2010).
1.1.1.2. Carbon neutrality
Carbon neutrality refers to the when companies, products, services, actions or events have a net zero amount of carbon-dioxide emission into the atmosphere. In other words, the global greenhouse gas emissions must be offset by the corresponding amount of carbon being tied up. This can be achieved by lowering the release of carbon-dioxide, or by balancing the emissions with carbon offsetting; removing carbon-dioxide from the atmosphere (European Parliament, 2019).
1.2. Problem
4 not profitable (Antoniou and Strausz, 2017). Without government subsidies, the repayment period becomes too long for companies to justify that these investments are profitable for the business (ibid.). However, today’s case is different. In 2018 the renewable alternatives for energy became cheaper than fossil alternatives (IRENA, 2019b). At the same time, many studies indicate that more and more people want to see renewable alternatives and value it in their daily consumption (ibid.)
It is therefore interesting to investigate how firms respond to environmental issues and what different factors that can trigger this behaviour. This understanding is important for mainly two reasons. First, this knowledge could assist the development of new pro-environmental standards and certificates. The understanding could also benefit the certification organs to adopt the regulations in order the meet the industries requirement. Secondly, understanding the underlaying mechanism of pro-environmental behaviour and decisions could potentially help developers of sustainable innovations to adopt their technology to meet the desired requirements for the market. Previous research has examined why companies chose to embrace ecological responsiveness. It has also been investigated which different motivators can trigger pro-environmental behaviour (Bansal and Roth, 2000; González‐Benito and González‐Benito, 2005). However, little research has been done on how external motivator can influence firm’s initiative for ecological responsiveness. With this study, we want to focus on how external motivators in the form of environmental certification could trigger initiatives for environmental sustainability. In order to gain this understanding, important success factors linked to environmental certificates are also of great importance.
1.3. Purpose
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1.3.1. Research questions
The current transition from fossil fuels to renewable energy sources is not sufficient enough to meet the global emission goals for 2030 and there needs to be an acceleration of investments in renewable energy sources to meet the climate goals (IEA, 2016; IRENA, 2019a; Roeben, 2020; UNFCCC, 2018). While it is known that implementation of certifications can lead to competitive advantage, better company image and communication with clients (González‐Benito and González‐Benito, 2005; Lourenco et al., 2012), there is limited information about pressure from certifications relation to the possibility of a carbon neutral certification. This leads the report to address the following research questions:
i) How could a carbon neutrality certification act as a motivator for sustainable environmental initiatives within the business-to-consumer market?
ii) What are important success factors related to the design of pro-environmental certificates?
1.4. Scope
We have chosen to focus on Swedish companies working with direct sales of products either manufactured by the company itself or produced specifically for the company by a subcontractor. This research is limited to study environmental and climate effects and does not analyse the social effects on sustainability. We have further chosen to only investigate larger well-known companies with a clear environmental focus since they are thought to be the large game-changers when it comes to carbon emission amounts.
1.5. Outline
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2. Theory
In the following chapter, the theoretical framework for the report will be presented. Operationalization of environmental sustainability can be divided into the three pillars of the triple bottom line which consist of environmental, sociological or cultural and economic performances (Gimenez et al., 2012; Thangavel and Sridevi, 2015). Diving deeper into the role of certifications and environmental sustainability, a framework of ecological responsiveness will be examined, followed by theory niched within areas such as value, credibility, timing and risk addressing different parts within ecological responsiveness.
2.1. Ecological responsiveness
Bansal and Roth (2000) have in their paper “Why companies go green: A model of ecological responsiveness” developed a model describing different motivational factors behind why companies work with green investments and initiatives. They call this
ecological responsiveness, which is defines as “a set of corporate initiatives aimed at
mitigating a firm’s impact on the natural environment.” (Bansal and Roth, 2000, p. 717). What was found in the study was three categorial contexts that influence three main motivational categories affecting company’s ecological responsiveness (see figure 1). The contexts were defined as ecological, organizational field and individual context, while the firm motivations were divided into competitiveness, legitimation and ecological responsibility (also referred to as social responsibility). Through these three factors, companies gain sustainable advantage on the market which thus improves their long-term profitability.
8 The study included a variance of firms working in different industries such as oil companies and food retailers. Throughout the different contexts and firm motivations, emphasis and stronger evidence of the importance of the relationship between the contexts and motivations varied between the industries. For example: 7 interviews demonstrated strong evidence for competitiveness as a motivational factor for firm, including 3 food retailers and 0 oil companies. 24 interviews demonstrated strong signs for legitimation to be of importance, whereas there was 1 food retailer and 4 oil companies. Lastly, only 4 respondents emphasized social responsibility, including 3 food retailers and 0 oil companies (Bansal and Roth, 2000). The emphasis from these two industries are presented in the table 1 below.
Table 1: Summary of strong evidence for firm motivators to ecological responsiveness.
Firm Motivator Industrial Sector Amount
Competitiveness Food Retailer 3
Oil Company 0
Legitimacy Food Retailer 1
Oil Company 4
Environmental Responsibility Food Retailer 3
Oil Company 0
2.1.1. Issue salience
9 and Roth, 2000, p. 729). In general, limited knowledge and science within an area make actions more difficult to pursue resulting in low issue salience, while problems with high issue salience are commonly pushed as a result of either competitiveness or legitimation.
2.1.2. Field cohesion
Field cohesion is expressed as the intensity of informal network within specific industries (Bansal and Roth, 2000). Generally, fields considered to be heavy pollutants such as the forestry industry and oil companies have stronger field cohesion, partially due to intense scrutiny. These industries have a stronger tendency to either form different kinds of associations or monitor their competitors’ ecological choices more thoroughly. A form of “best practice actions” and lobbying towards governments are more commonly observed, where the associations collectively try to affect legislation and regulations. These stronger field cohesions showed attitudes of a specific group belonging behaviour. Problems addressing the industry as a whole would be tackled better by the specific organizational field but would also show complications of deviating from the group. While this puts limitations on innovative practices since it affects the industry standard, companies still mimicked other firms’ initiatives. The focus on competitiveness is thus less important for industries with high field cohesion, whilst legitimation and credibility becomes significant and central (Bansal and Roth, 2000).
2.1.3. Individual concern
The individual concern lifts to what extent environmental actions and results are valued. These individual and personal values can affect a firm in three different ways: help in decision-making, some organizational members will champion ecological responses, and teams with higher power will be more inclined to make changes if it corresponds to their personal values (Bansal and Roth, 2000). By associating values with options, priorities of actions will be affected by the individual concerns.
2.1.4. Legitimation
10 developing networks and committees where local community represents are part of, environmental audits, aligning the organization with eco-friendly advocates. Several prominent characteristics differentiated this motivation from the other two motivations. A firm´s long-term survival or license to operate is believed to be undermined by threats to the firm´s legitimacy. If firms don’t get accepted by the society, they run risk of going out of business. The emphasize on survival, long-term sustainability and license to operate supports Meyer and Rowan (1977) theory of the relationship between organizational survival and legitimacy. According to Bansal and Roth´s (2000) data, legitimation was suggested to be directed towards obeying with institutional regulations and norms. Their research also showed that respondents focused to avoid sanctions through external constraint, also predicted by Hart (1997). Often environmental regulations were aimed to be kept up by corporate environmental policies within the firm (Bansal and Roth, 2000).
Companies that are driven by legitimation, chose to focus on stakeholders that were significant in prescribing legitimacy issues. Bansal and Roth (2000) study focused rather on what would happen if the stakeholder’s conditions were not met. Many respondents were concerned about potential sanctions, penalties and other forms om fines, but they were also concerned about bad publicity, discontented employees and other risks. This was also demonstrated by companies’ willingness to reduce risks instead of publishing their ecological responsiveness. Since many of these companies’ goal was to minimize risks and costs, they rather sought to make sure that their ecological responses met the standard norms.
11 González‐Benito and González‐Benito (2005) predicted in their study that, if a firm highly believe that environmental management could potentially improve the relationship with stakeholders, they will more likely seek an environmental certification. The firms may also see a potential to improve their institutional relationship with for example banks, governments etc. by adopting a certification. Their result however showed that a certification does not aspire to improve the firm’s relationships with institutions and social groups surrounding them. This is thought to be due to lack of socio-economic pressure.
2.1.5. Competitiveness
Competitiveness is according to Bansal and Roth defined as “the potential for ecological responsiveness to improve long-term profitability.” (Bansal and Roth, 2000, p. 724). Some factors that affect a company’s competitiveness are how they work with waste and energy management, process intensification, ecolabeling and green marketing as well as development of eco-products. These factors are discussed about in two manners, either through direct investments into new equipment, higher efficiencies and cost reductions, or as profitability of good reputation and product reliability. Gonzáles-Benito and Gonzáles-Benito (2005) argues that the first factor related to more direct cost reduction and increase in production effectivity is considered to be an operational motivation, whilst improved marked position and increased sales is defined as commercial
motivation.
2.1.5.1. Commercial motivation
12 quality employees (Bansal and Roth, 2000), as well as a positive correlation between green marketing and reputation has been observed (Miles and Covin, 2000). Empirical studies have further shown a correlation between companies environmental performance and stronger financial returns when compared with less environmentally sustainable aware firms (Murphy, 2002).
Being able to display positive environmental performance through a third party certification has shown to enhance credibility for ecolabels towards consumers (Darnall et al., 2018). Certifications generally also give a perception of better quality, allowing for price premiums associated with ecolabels (Lallemand et al., 2016). Studies on fisheries, have shown a positive relationship between price premiums and ecolabeling (Blomquist et al., 2015; Roheim et al., 2011). Similarly, some studies have shown price premiums and economic benefits within the forestry industry (Nguyen Hoang et al., 2015; Yamamoto et al., 2014). However, unity of consumer willingness to pay more for certified products has not been homogenous (e.g. (Anderson et al., 2005; Yamamoto et al., 2014)). When observing commercial motivations, EMS such as the ISO 14000-series standard emerges. ISO 14000 is a global standardized approaches for how companies can implement internal changes to reach their environmental objectives and goals, and also serves as a certificate (ISO, 2009). Over 300,000 organizations in 171 countries have adopted the standard in early 2020 (ISO, 2020). The certificate is voluntary for companies to obtain, but has served as a valuable differentiating factor within both industrial and financial markets, indicating environmental proactivity (González‐Benito and González‐ Benito, 2005). An ISO publication further mentions the potential of improved productivity, better customer satisfaction and a more creative innovation atmosphere related to the implementation of the certification standard (ISO, 2009). González‐Benito and González‐Benito (2005) however concluded in their research that there is no guarantee that implementing the ISO14001 standard would increase the environmental performance or give competitive advantage, but instead suggests that the standard rather performs as a catalyst for competitive advantage.
2.1.5.2. Operational motivation
13 technology. Companies can use their inputs more productively - from raw materials and energy production to consumption. Bansal and Roth (2000) characterize that firms tend to base their decisions mainly on the option that secured the highest return. Hence, the operational benefits had a greater direct impact than the commercial motivations, thus greater attention to cost benefits than other motivations. An example from the respondents from the study stated that "Once you have the investment, then maybe the benefit versus the payment costs may be of economic value over the long term". These companies focus on improving financial performance, where social initiatives were only performed if they could serve that purpose. Some meta-analyses do however show a positive correlation between financial performance and corporate social performance (Margolis and Walsh, 2003; Orlitzky et al., 2003). And while many researchers debate the true knowledge and correlation in the area, Surroca et. al. (2010) claims that corporate responsibility performances stimulates intangible assets such as innovation, reputation and culture, acting as a mediator for a better financial performance. They state that a direct relationship between corporate responsible performance and corporate financial performance is non-existent, and that a company’s intangibles mediates this relationship.
Distinguishing concerns are higher profits, lower costs, market differentiation, higher share price, and larger market share. Porter and Linde (1995) claim that pollution and greenhouse gases if often an economic waste because it indicates inefficiency and incomplete usage of resources. By looking at resource productivity, this opens up a new way of looking at the full system costs and to both production and commercial benefits. It’s not about having the resources, it’s about using them in an efficient way. Companies operational competitiveness could in fact be dependent on how they respond to environmental problems. Companies that innovate successfully will come out as winners. Innovative companies respond to new regulations as challenges and might even be in front of the regulation while an uncompetitive company may not be as innovative and will most probably work against regulations.
2.1.6. Social responsibility
14 obligations and responsibility, resulting in “feel-good factors”, higher employee morale and individual satisfaction (Bansal and Roth, 2000).
2.2. Rational choice theory
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2.2.1. Decision-making under time pressure
Young et al. (2012) states that the aim of any decision maker is to make the optimum decisions based on the least amount of cognitive strain or effort. One could argue that this is not a very daunting mission when given limitless time to assess the problem with the decision, but there are many situations that require the individual to make a decision within a given deadline. Earlier research has shown that it can occur a speed-accuracy trade-off with time constraints, and that individuals use many non-compensatory handling strategies, that includes filtration as well as acceleration of information (Payne et al., 1996).
Young et al. (2012) concluded in their paper that prior research provided diverging results, where one side found that time pressure led to reduced risk-taking and the other side concluding that time pressure led to increased risk-taking. Young´s research showed that multiple cognitive processes where involved in the process of decision-making with influences of time pressure. The research also highlighted that the influence of time pressure led to an increasing attractiveness of risk in the domain of gain (risk aversion) and decreased discriminability in the domain of losses (risk seeking). Payne et al. (1996) argues that there are three major ways in which people react to different decision problems when they are influenced by time. Firstly, peoples processing accelerates, i.e. less time is spent on processing relevant item of information. Secondly, under time stress the processing tends to be more selective, where majority of the focus is on important and/or negative information about alternatives. Thirdly, strategies regarding the decision may change as a function of augmented time stress.
2.2.2. Norm-activation theory
Schwartz (1977) published an advanced theory about moral decision-making to further explain altruistic behaviour of individuals. The theory is widely known as the norm-activation theory and was originally used to explain helping behaviour. It has since then been extended to explain many different forms of behaviour (Liere and Dunlap, 1978). According to Schwartz (1970) research, two preconditions was proposed for personal norm activation:
16 2. Ascription of responsibility, meaning that the individual must undertake that
action by feeling a personal responsibility.
However, the activation of personal norms cannot be seen as a sufficient condition for pro-social behaviour according to this theory. Activation of the norms can be neutralized by either denial of consequences for the individual’s actions or denial to take responsibility to act.
Through specific action situations the personal moral norms are constructed as well as reflections of expectations that people hold for themselves. In the study Schwartz recognizes that socially shared norms derive these self-expectations. Shared expectations in social interaction give rise and teach individual expectations, and in the singular interaction history they are modified for each person (Schwartz, 1977).
Responsible behaviour regarding the environment can be viewed as a form of altruistic behaviour. With this in mind, norm activation theory can be used to explain a variety of pro-environmental behaviour (PEB). Two different types of behaviours have been studied in the empirical research on norm-activation as an application to PEB. Firstly, is the household behaviour, such as energy household conservation. Secondly, is environmental protection support, for example tougher environmental regulations (Turaga et al., 2010).
2.3. Value in decision-making & risk
When looking at the definition of value, a wide range of explanations and theories addresses the concept. Value is defined from a psychological perspective in form of ethics, where the importance of different actions or things are emphasized on either a personal level, or a cultural level. Value can also be seen from an economical perspective in terms of monetary worth or the exchange benefit of goods or services. However, even within economics the value does not simply need to correlate to price and cost: “… the value of an item must not be based on its price, but rather on the utility it yields” (Bernoulli, 1954, p. 23).
17 𝑉𝑎𝑙𝑢𝑒 = 𝐵𝑒𝑛𝑒𝑓𝑖𝑡𝑠 − 𝑆𝑎𝑐𝑟𝑖𝑓𝑖𝑐𝑒
𝑅𝑒𝑠𝑜𝑢𝑟𝑐𝑒𝑠
In the equation, benefits are described as desired consequences, sacrifice as undesired consequences, and resources as “a further attribute representing the effort expended to accrue value” (Thomson and Austin, 2006, p. 6).
The differences between the earlier adoption of value with function over cost, compared to value expressed by Thomson et al., is the focus of stakeholders that are accounted for in the latter. Thomson and Austin’s stakeholder value model distinguishes between objective and subjective value in economics and enhances the role of subjectivity in relation to value definition. An objective view consists of qualities, such as physical, monetary or function characters, that are observed separately from the person. When examining the stakeholders, the focus shifts towards subjective value. This means that there is a correlation between the product and person that is accounted for, instead of looking at these factors separately as for objective views. The stakeholder value equation thus entails a flexibility in the perception of value that is dependent on each unique stakeholder (Thomson and Austin, 2006).
When looking into value with a sustainability perspective, value reaches into the philosophical spectra, observing ethics rather than economics. It becomes relevant to talk about values rather than value. Values denotes a human aspect in subjective judgement of what is of importance, creating a range of perceptions based on different outcomes and perspectives.
2.3.1. Evaluating timing and irreversibility in investments
18 McDonald and Siegel (1986) stresses the importance of investment timing, arguing that the zero net present value model can cause a project value loss of 10 to 20 percent. Instead, when the value parameters are reasonable, they recommend waiting until the benefit over cost relation is above a factor of two. Delaying investment processes offers companies to gain more information about costs, prices and market conditions, reducing the uncertainties and risk associated with new investments (Dixit et al., 1994; Pindyck, 1991). Waiting to invest is thus an important option affecting the decision-making. However, there will never be completely non-risky investments regardless of the amount of waiting time.
Investments irreversibility are specially sensitive to risk, where thus stability and credibility could be of more importance than factors such as interest rates (Pindyck, 1991). Cortazar et al. (1998) states that the output price for environmental investments needs to be at a high level rather than just a net present value of zero, mainly due to risks of a price fall making an irreversible investment non-profitable. Industries where the price volatility is high thus also tend to be more reluctant to make environmental investments. Carbon emission quotas, who are designed to promote investments, might in practice rather just limit production. Companies have shown to cut back on production to reduce their emissions rather than engaging in environmental investment. What needs to be considered is the closing and timing options firms stand before, putting pressure on the price and cost of investments (Cortazar et al., 1998). There is also a limit to the minimization of uncertainties, where the uncertainties become neglectant on moderate to low levels, putting more emphasize of the importance of price (Fouilloux et al., 2015). Fouilloux et al. (2015) further states that the higher the carbon emission prices, the investments within carbon emission reduction programs will accelerate.
2.3.2. Financial risk and investments
19 other is the continuous financing risk. Others suggest three risks associated with investments in renewable energy: technology risk, market risk and policy risk (Liu and Zeng, 2017). Technology risk refers to maturity and progresses in technological innovations, market risk is the uncertainties associated with the future market position, and policy risk refers to the possibility of changes in political regulations (such as subsidies, tax breaks, R&D funding and emission quotas). In the early stage of investment, the policy risk is the dominant risk factor. With continuous activity, this relationship shifts making the market risk to be of a higher degree. The market risk is further described to become lesser as the installation cost decreases.
2.4. Environmental, instrumental and symbolic motives
When looking at attributes and motives for innovations addressing sustainable development and adaptation, both towards customers and within an organization, literature show three main categories affecting the perception and adaptation the innovations. These aspects are denoted as: instrumental, environmental (also referred to as substantive) and symbolic (Berrone et al., 2009; Noppers et al., 2016, 2014; Rodrigue et al., 2013). Instrumental attributes are the results of utilizing and owning a sustainable innovation, environmental (or substantive) attributes are the outcomes of sustainable innovations that bring change to the environment, and symbolic motives or policies of sustainable innovations or practices effects ones social status, without making substantial effect on the environment or operations (Berrone et al., 2009; Dittmar, 1992; Noppers et al., 2014; Rodrigue et al., 2013; Schuitema et al., 2013).
For adaption of pro-environmental innovations, symbolic and environmental attributes have shown to be the most effective (Noppers et al., 2014). Some research have shown that symbolic motives commonly are underestimated and drives adaptation for sustainable innovations (Noppers et al., 2016, 2014). However, it is also shown that symbolic actions have a lesser of an impact than substantive actions when looking at legitimacy (Berrone et al., 2009).
2.5. How to build credibility
20 used to constitute the FAM; principles, criteria and indicators of principle. MSC is built on three different principles: firstly; the capacity of fish stocks should be maintained, secondly; structure, productivity, function and diversity within the ecosystem which the fishery works within should be maintained, and lastly that required laws and regulations regarding responsible use of fish stocks are met through effective management (MSC, 2020). These principles are the foundation for further criteria which specifies the requirements that has to be met in order to get a certification. Conclusively, Principle Indicators which is an interpretation of above criteria are translated and tailored by certification bodies to meet the specific local conditions, a particularly important element of a global system aimed at adapting and being accepted at the local level (Bush et al., 2013).
The governance structure of MSC also derives their credibility. Third-party certification has been adopted within the organization whereby examiners that are independent from the producers are in charge of evaluating obedience of the absorbed party. Through this arrangement, objectiveness and transparency are achieved. Through a stakeholder committee and several working groups on areas of thematic character raise concerns that in a technical advisory body are taken up. Strategic decisions within MSC are taken through this governance structure (MSC, 2020).
Regardless of MSC built up credibility through in dept science and governance, the organization continually faces different issues and pressure, Even though continues resource investments are being done and effort to overcome these issues; specifically access for world fishery development and environmental performance demonstrations (Bush et al., 2013).
According to Darnall et al. (2012) consumers appear to have a stronger trust towards ecolabels developed by sponsors with a more classic credibility, such as environmental NGO´s our governments. Their findings showed that consumers tend to prefer this over ecolabels with heavy initiatives and sponsorship from business associations.
2.6. Global standards
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3. Method
In this chapter we describe the approach and method that we have chosen to use during our thesis work. We first describe our view of reality and our view of knowledge. We also present our choice of method, strategy and approach, and then we go over how the interviews was conducted. Finally, we discuss the credibility and ethical aspects of our investigation and lastly the limitations we faced during the thesis.
3.1. Ontological consideration
The term ontology derives from Greek and means "the doctrine of being". Ontology is thus the doctrine of what the world looks like. Issues related to ontology can be divided into two approaches; objectivism and constructionism, respectively. Objectivism is an ontological position that means that social phenomena and their meaning have an existence that is independent of social actors. Objectivism thus means that we encounter social phenomena in the form of external facts that we cannot influence. Reality is regarded as an external and objective phenomenon. The second ontological point of view, constructionism, is that social phenomena and their significance are something that social actors continuously create. Social phenomena and categories are created by social interaction and constitute constructions. These are in a state that is constantly changing and can therefore never be considered definitive. The reality of social construction is subjectively given and re-created in every context of everyday life. Our view of reality is consistent with the latter view. We believe that social entities, such as organizations and companies, should be regarded as constructions, which are based on actors' perceptions and actions. These must thus be seen as socially constructed continuous processes (Bryman and Bell, 2011).
3.2. Epistemological consideration
23 The hermeneutic approach criticizes the positivist scientific view of social reality and believes that knowledge perception is based on understanding and interpretation, which is something has been applied to this research. The point of departure is that the study of how people think, and act is something quite different from science. Social reality is perceived differently by different people, that is, it is not the same for everyone, and therefore cannot be regarded as objective (Bryman and Bell, 2011). Since there is a variety of different ways to interpret and make sense of social phenomena, it is not possible to build cumulative knowledge in the way that positivism advocates (ibid.).
3.3. Scientific approach
Bryman and Bell (2011) define two different types of research approaches, the deductive and the inductive approaches. In practice, the deductive approach represents the most common form of understanding of how social science research is structured. Here, the researcher starts from existing theory and then develops hypotheses and later collect data through different forms of observations. The results of the empirical data collection are then compiled, and either confirm or reject the hypothesis. Finally, the theory is reformulated based on the new observations. The inductive approach goes the opposite way from deduction. Here the researcher starts with observations, to later form a theoretical framework through generalisations. This study primarily aims to apply a deductive approach as it, based on previous theory either confirms or rejects the developed hypotheses by compilation of the collected data.
3.4. Choice of research strategy
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3.5. Interviews
Interviews are a qualitative method and are of structured type in this study. A semi-structured interview is described by Bryman and Bell (2011) as an interview with open questions about a certain theme, and thus differs from structured interviews in that the questions asked are not completely decided in advance. In this way, the respondent can be allowed to move the conversation more freely and follow-up questions can be asked to provide further in-depth answers. The length of the interviews varied between 40-60 minutes and the majority of the interviews were conducted over video-link due to current restrains related to virus spreading in society. In total, 10 interviews were conducted.
3.5.1. Interview guide
As mentioned above, the interviews were conducted in a structured manner. A semi-structured interview is typically made up of an interview guide covering specific predetermined topics (Bryman and Bell, 2011). The interview questions were based on the early literature review, where two separate interview guides were designed. This division was based on the two focus groups from the selection of study objects, which is discussed further in 3.6. Selection of Study Objects. The need for two separate interview guides was discussed to be of importance due to the interviewee’s different perspective of the same subject, creating incentives for different perspective of questions as well. Bryman and Bell (2011) states that interview guides in semi-structured interviews could consist of only support words or visual prompts. However, the interview questions were designed as full predefined questions to reduce interviewer bias, even though the exact wording was not utilized during the interviews. This was to ensure the flexibility of the interviews. The interview questions were designed with a structural order, but not limited to the sequence during the interview. They were also designed to help answer the research questions with focus on the early literature study. The interview guides can be found in the appendix.
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3.6. Selection of study objects
According to Bryman and Bell (2011), selection is the process of choosing people within a population as respondents in a study. When it comes to qualitative selection methods, Bryman & Bell argue (2011) that researchers often use convenience selection - easily accessible respondents – as the sample does not need to be representative of the entire population. However, according to Trost (2010) it is important for the researcher to find samples with different types of people within the given population homogeneity. Bryman and Bell (2011) also argue that researchers can end up with convenience selection as organizations in case studies may require themselves to select people for interviews. The selection could also be seen as a purposive sampling as expert sampling. Expert sampling is referred to as when the researcher seeks a specific form of expertise and by that choose respondent with a position that fits the expertise area (Crossman, 2020). Both convenience sampling and purposive sampling was used depending on the availability of the expert people and the company’s willingness to participate. Many of the interviewed companies did not have contact information to any specific persons in the company, hence we had to contact an info e-mail and be assigned a person to interview from the company. In the cases where we could find information to a person with a sustainability position, we chose a purposive sampling, otherwise convenience sampling.
26 interviews were selling companies. The interviewed people, their position, company, time of interview is demonstrated in table 2 below.
Table 2: Information of all interviewed persons, their position, company and time of the interview.
Company/ organization
Name Position Time of
interview
platform for interview
Svanen Ragnar Unge CEO 2020-03-17 Skype
KRAV Anita Falkenek CEO 2020-03-31 Phone
MSC Linnea
Engström
Director of MSC Baltic sea region, Scandinavia
2020-04-14 Skype
FSC Eva Mattsson Quality and certification manager 2020-04-06 Teams Windmade/ Vestas Rasmus Schophuus Director, Business
Innovation & Optimization
2020-03-25 Phone
WWF/ Windmade
Stefan Henningsson
Senior Advisor Climate, Energy and Innovation
2020-04-07 Zoom
H&M Kim Hellström Strategy lead, CSR 2020-04-08 Teams
Carlsberg Sverige
Anna Anderberg Head of sustainability 2020-05-07 Zoom
Max burgers Frida Sjödin Sustainable brand experience manager
2020-03-25 Cisco Meeting App
Preem Jens Bruno Head of Sustainability Management
2020-04-03 Teams
3.6.1. Background of interview objects
To gain an understanding of the empirical data presented in this study, basic knowledge of the interviewed organizations is of importance to understand nuances and diversities within answers. Table 3 presents the certification organizations and table 4 the Business-to-consumer corporations.
Table 3: Information regarding the interviewed certification organs.
Organization Founded Field of operation Market Svanen 1989 Fast-moving consumer goods Sweden
Krav 1985 Ecological sustainable agriculture
Sweden
FSC 1993 Sustainable forestry Global
MSC 1997 Sustainable fishery Global
Windmade 2011 Consumer label for renewable energy
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Table 4: Information regarding the interviewed B2C corporations.
Company Founded Industry Market
H&M 1947 Fashion Global
Max Burgers 1968 Fast-food retailer Sweden (mostly)
Preem 1996 Oil and gas Global
Carlsberg Sverige 1847 Beverages Global
3.7. Data sampling and analysis of data
All the interviews were recorded after gaining approval from the interviewees, and later transcribed for better data analysis. Transcription of interviews are time consuming, but comes with several other advantages according to Bryman and Bell (2011), such as:
• Helps to correct errors related to human memory limitations.
• Offers repeated and more thorough analysis of interviewees answers.
• Opens for scrutiny from other researchers, both possibly acting as secondary data for other research and enhances credibility in case there are accusations of researcher bias.
When the transcribing was completed it acted as data for the empirical background and analysis. Coding was used on combination with the grounded theory gained from the interviews to examine the empirical data. The coding was done manually starting off with separately designed codes made individually between the research group. The codes were later discussed jointly in the group where 25 codes were generated for the certification organizations and 27 for the firms. 7 categories were used for certification organizations, and 6 categories for the firms. Similarly to recommendations by Bryman and Bell (2011), the texts were first read though, codes were designed, and then reviewed once again to detect errors and similarities or differences in the designed codes. When coding, there is a risk of pulling information away from its context, resulting in inaccurate representation of data (Bryman and Bell, 2011). This issue was minimized through discussion and review of the texts between the researchers. It was though this process it was reassured that the information was not misleading and taken out of context.
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3.8. Method criticism
The disadvantage with doing interviews is that it is a subjective technique and the risk of "bias" is critic. It also takes a lot of time and the answers can be difficult to analyse. Banaka and Johnsson (1981) writes about the inexperienced interviewer. He believes that the concern of losing the grip is expressed by using:
• Lead questions - The interviewer asks questions that he already seems to know the answer to.
• "Shooting Iron Issues" - The interviewer asks several questions before the respondent have been able to answer the first one.
• Interruptive approach - The interviewer interrupts the respondent's answer and lead him on another track or take the answer out of his mouth.
• Echo - The interviewer repeats exactly what the respondent has just said.
• Anticipations - The interviewer draws conclusions about something that the respondent has already said.
Lead questions was a phenomenon we quite often fell into; we corrected some questions after the first interviews to avoid lead questions. Iron Issues came up as a problem due to the fact that all interviews were over video link and the silence between the questions due to the delay makes the interviewer asking more questions before the respondents have started to answer. Interruptive approach did not often occur due to the video link. To interrupt the respondent, the delay caused the interview to lose the flow. Sometimes echo happened to clarify that we understood the respondent correctly and was not thought to influence the interviews negatively.
3.9. Reliability & validity
The concept of reliability relates to whether the results of the study are feasible again or if the result is affected by random conditions. Validity is basically about the relevance of measurements, that is, whether the study's result is associated with the purpose of the study or not. To create a convincing validity, one must examine what is intended to be investigated (Bryman and Bell, 2011).
29 process. Furthermore, Bryman and Bell (2011) consider what potentially can affect the empirical end result of the analysis is the reliability problem. This means that it can create an ambiguity in the readers' perception of how we as researchers have analysed our empirical materials. For example, what concepts, categorizations used and what types of interpretations that were common and uncommon (Bryman and Bell, 2011). Furthermore, we chose to solve the reliability problem by adding our questionnaire as an appendix, to convince the reader that the quotes from the focus group interviews are relevant in connection with the master thesis.
3.10. Ethical aspects
During the interviews, we have taken into account the different ethical principles of Bryman and Bell (2011). Ethical issues concern voluntariness, integrity, confidentiality and anonymity regarding the respondents included in the study. The ethical principles are divided into four different main areas: that the respondents are not harmed, lack of consent from respondents, does not interfere with privacy, and does not hide any important information for the respondents. These principles are included within the framework: the information requirement, the consent requirement, the confidentiality requirement and the utilization requirement. We started from the ethical issues when we contacted the respondents; we explained the respondents' right to voluntarily participate, described the purpose of the study, their right to be anonymous and the recording material would only be used for research purposes (Bryman, 2018)
3.11. Limitations
For both quantitative and qualitative research, a larger sampling size offers a higher likelihood of precision in answers (Bryman and Bell, 2011; Sachdeva, 2008). It is lifted that there is no definition or guidelines for the perfect sample amount, and even though a larger sample size offers more accurate answers in regard to population, there are limitations that had to be considered as the study had finite resources. Sachdeva (2008) discusses three questions that will affects the sample size of each individual study, which are:
1. How accurate you wish to be?
30 Further, Bryman and Bell (2011) points out the sample size to be dependent on two specific resources: cost and time. The research was conducted with a limited and time frame, affecting the possibility for more interviews. While the sample size could be considered low, a focus on generalizability to obtain representational data for a wider population was of importance (D O’Gorman and MacIntosh, 2014). Since two of the research questions focused on future possibilities of carbon neutral certifications based on present and former events, it is not definite that more samples would have given more accurate answers of the industries and certification organs perspectives. Even though that would have been of interest.
The sample size was strictly limited by two factors which varied between the interview subcategory groups. When contacting industrial companies, there was a large number of both non-responses as well as declined interviews. One specific reason behind this is thought to be due to the Covid-19 pandemic. When interviewing, several of the respondents pointed out that sustainability departments were strongly affected by the virus, where majority of the staff had been denounced. Several companies had also stopped their production completely, and a general perception of non-ordinary work was observed in society, further affecting the response rate.
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4. Empirical study
The following chapter presents data from the interviews. The data aims to represent what was emerged in the interviews, which is done through summaries and quotes. All citations and quotes are a result from interviews with the certification organisations and companies with no other data sources. To better understand the empirical data, the results have been divided between answers from the certification organizations and the firms, still with similar but not exact divisions of area subjects.
4.1. Certification organizations
In this chapter the empirics gained from interviews with the certification organs will be presented. To cover an overall perception of certifications, several different areas are lifted. Incentives and motivators have enhanced aspects such as driving attributes to why the certification organizations started and their perception of how companies view their certification and ecolabel. The design is also lifted, followed by the main success factors and problems that are associated with designing a certification.
4.1.1. Incentives & motivators
Based on the information from the interviews, we found that the main motivators for starting a certification organization or ecolabel was either irresponsible use of resource or lack of common ground within an industry. Communication, competitive tool or credibility
4.1.1.1. Driving the initiatives
According to the interviewees, there was a variation of underlying events and incentives for the start of the different certification organs. For FSC and MSC the founding reasons were based on excessive and heavy consumption of natural resources that lacked regulations. The rapid deforestation of rainforest in South America sparked awareness and actions to save and protect the forests, and the FSC initiative was later picked up by Swedish forestry companies. MSC’s history is similar, where Linnea Engström expressed:
32 The formation of Svanen and KRAV, both founded in the 1980’s, were also expressed to be a result of non-regulated or standard-less manufacturing and production:
“In connection with when environment was on everybody slips, companies also began to use environmental arguments in their marketing campaigns, which was more or less serious. Some lies and misconceptions. They freely used expressions such as environmentally friendly, gentle, degradable and stuff like that. And the consumer representatives thought it was difficult to be a consumer during this time, it was easy to be fooled by these things. They were wondering if they could in any way protect consumers so that they get credible information instead” – Ragnar Unge
Similarly, KRAV stated that organizations and farmers wanted to enhance the advantages of ecological farming, but “many companies talked about it in different ways, which is why they decided to create KRAV as a common regulatory framework for what you mean by ecological farming”.
Whilst FSC, MSC, Svanen and KRAV were outcomes of lack of standards or regulations within specific industries, the initiative for Windmade came from the corporate side and was established by Vestas (a Danish based producer of windmills) with co-founders such as WWF and Bloomberg. They wanted to enhance which products were made in a “CO2-
friendly matter. It was hard to tell which products are made that way. Vestas saw an opportunity to start a customer label for products that were produced with wind energy”. Vestas ambition was further “to start selling to non-traditional customer segments, selling directly to larger non-energy corporations”.
The wind energy industry had an upswing with an increased market interest, but along with the attention also came critique for windmills. As a response,
“The wind power industry wanted to show the world that that the critique was relative. All energy production has an environmental impact, but wind power has a significantly lower environmental impact than other technologies”.
33 wind energy industry forward, whilst the co-founders saw the positive outcomes of greener energy use within industries.
4.1.1.2. Motivators for using ecolabelling and certificates
Ragnar Unge, CEO of Svanen expressed that
”The main idea is that we will help people to choose the right way by having a clear and simple symbol you can go for when you want to act as environmentally friendly as possible, it’s a basic function. The second basic function is aimed at companies […] with the help of ecolabeling, we will try to help companies use environment as a means of competition. Those companies that are good at environmental issues and want to compete with the performance they have in their product or service, we can help by getting a brand that they can easily communicate and that is more credible than their own reasoning”.
However, the customer and company views were lifted differently by the organizations. Svanen talked about the use of the certification as a means of competition enhancement and communicative tool. FSC had a similar view highlighting the communication related to certifications: “you want to be able to show the work you do in the forest or in the supply chain. There are always a number of happy idealists saying I want to show that I
am great, but most also have a view of I need to be able to sell this”. Windmade also
enhanced the competitiveness of certifications, where they made a “survey that customers would be happy to pay more for production in a CO2-friendly matter”. MSC brought out
several factors such as “pressure from consumers to some extent” and for larges companies that “perhaps you see in the horizon that things are getting close”. KRAV on the other hand talked about the credibility of certifications as the main motivator: “The largest added value, I think, is that a third party has looked into their businesses and said that yes, this looks good”.
The certification organizations understanding of the company’s perspectives partially followed the relation to consumers, whether it was due to pressure as for MSC or as a competitive advantage. FSC lifted an overall environmental interest, where companies thought that selling unsustainable wood from rainforests would harm their business: “I think there were many selling companies that saw that no, we can’t sell products from
34 gained from a third-party investigator was mentioned as a motivator by 4/5 certification organs, where through the certification a third party could confirm good producing practices and thus showing off that the company is doing something of good. One respondent did not enhance this relationship during the interviews.
4.1.1.3. Certification vision and goals
When asked about vision and goals regarding the respective ecolabel in relation to the market and companies, the respondents would either take a wider perspective or a more niched one. While MSC expressed a specific goal of gaining more certified bodies in the system, ranging from current 15% to the goal of 30% in 2030, the emphasis lies on making the label more widely adopted by the market. Similarly, FSC expresses a will to certify as much as possible. Svanen and KRAV both talked about the environmental benefits of mass adoption of the certificates, but this was not a goal for either of the organisations. While KRAV mentioned their small market cap and the practical and technical limitations of making all supplies KRAV certified, there is a will to increase KRAV certified products. Svanen on the other hand aims to have about 30% of the producers in each industry certified, which is said to vary between certification groups, and does not want more than 50% Svanen-certified. Windmade did not mention their market share goals.
4.1.2. Design
Two of the respondents focused on additionality when talking about design of an environmental certification. “Additionality is key. For it to be credible, the way you procure green energy, it has to have additionality” was expressed by Rasmus Schophuus from Windmade. He continued by saying:
35 Both respondents discussed if buying green electricity should be enough to receive an ecolabel since there is no additionality and also the market for buying green electricity is not as developed in the rest of the world as in Sweden which makes it difficult to buy those in for example India.
Three of the respondents expressed a concern during design, which one respondent referred to as burden shift. When you set requirements for one parameter it can cause deterioration on another parameter. One respondent explained a scenario when companies replaces fossil fuel with bioenergy which is better in a CO2 point of view but not for
biodiversity. Anita from KRAV discussed replacements of diesel in agriculture were farmers replaced it with HVO which is largely based on palm oil fuel and we know that the cultivation of palm oil is not completely free from complications. “If it is a fossil-free source based on pine oil from Swedish agriculture, then it is great but there is a difference between fossil-free and fossil-free” - Anita Falkenek. “When designing detergents, we want the laundry to be clean in the lowest possible temperature to save energy and thereby reduce our CO2 emissions but at the same time, we want to reduce the amount of toxic
chemicals in the detergent” explains Ragnar Unge from Svanen. He expresses the importance of burden shift when designing the criteria’s in the standard.
All of the certification organs we interviewed expressed great emphasis on standards. To design a creditable certification or ecolabel, it’s important to base the criteria’s on global standards. Anita from KRAV expressed that:
“There isn’t definite how it should be calculated. It’s a long way to go as research must set the framework for how it is calculated otherwise, we will have companies arguing about it. Do we count this way you would have a good outcome but do we count like this you would have a bad outcome. And that’s something we can’t have”.
