Abstract
Do retailers and supermarkets hold power over third-party transnational sustainability standards? If so, what is the nature of their power, when and how do they use it and to what ends? Using the counterintuitive case of Walmart’s efforts to improve the Best Aquaculture Practices standard for sustainable aquaculture, I develop a conceptualization of business power that flows from the position of retailers and supermarkets as lead firms within buyer-driven global value chains (GVCs). This position affords them considerable leverage over transnational sustainability standards (TSS) through their ability to act as ‘gatekeepers’ to their networks of suppliers, thereby controlling the degree to which sustainability standards gain market uptake. However, this power can be constrained or redirected by value chain and sector-specific conditions that may shift the balance of power towards other actors in a production network. As a result, lead firms may sometimes counterintuitively advocate for TSS that are more inclusive, independent and demanding. This article brings together the literatures on GVCs, global production networks, transnational governance and business power in global governance to offer an initial framework for theorizing power dynamics between multinational corporations and the transnational standard setters that seek to govern them.
Notes
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1 This article mainly uses the shorthand ‘GVC’ to refer to the multinational sites of production that TSS seek to govern. It does so with the knowledge that there is an ongoing debate about whether ‘global production network’ (GPN) is a more appropriate conceptualization than GVC (Henderson, Dicken, Hess, Coe, & Yeung, Citation2002). Following the example of other authors (Mayer & Phillips, Citation2017), I use GVC here not to privilege one side of the debate over the other, but rather out of a concern for brevity and with the understanding that the differences between GVC and GPN approaches are arguably narrowing(Coe, Citation2012, p. 390). The rich contributions of the GPN literature feature prominently later in this article.
2 Lead firms are the businesses in GVCs that wield the most economic clout. They can be either buyers or sellers of goods, depending on whether a GVC is buyer or producer-driven (Gereffi & Korzeniewicz, Citation1994).
3 I use ‘downward pressure’ here to refer to processes through which third-party standard setters become less independent or impartial and more susceptible to influence from the businesses they seek to govern. Downward pressure can also refer to making standard criteria easier to achieve, and therefore, less costly for industry. Common sense dictates that the former strongly influences the latter.
4 Retailers and supermarkets have relatively less power in GVCs for processed foods, including high-value bean crops like coffee or cocoa. In such cases, manufacturers often play the role of lead firms and have more direct power over producers (Lee, Gereffi, & Beauvais, Citation2012).
5 The emergence of TSS is well documented elsewhere and does not require a full recounting here. Their origins have been documented using a diverse terminology, including: private governance (Auld Citation2014; Auld, Renckens, & Cashore Citation2015; Bernstein, Citation2014; Falkner, Citation2003; Fransen, Citation2011; Fransen & Conzelmann, Citation2015), private regulation (Bartley, Citation2003, Citation2007; Büthe, Citation2010), non-state market-driven (NSMD) governance (Bernstein, Citation2011; Bernstein & Cashore, Citation2007; Cashore, Citation2002; Cashore, Newsom, & Auld, Citation2004), experimental governance (Hoffmann, Citation2011), non-state certification (Auld & Gulbrandsen, Citation2010; Auld, Gulbrandsen, & McDermott, Citation2008; Gulbrandsen, Citation2014), standard-setting (Bartley, Koos, Samel, Setrini, & Summers, Citation2015; Büthe & Mattli, Citation2011; Mattli & Büthe, Citation2005), rule-setting transnational governance (Andonova, Betsill, & Bulkeley, Citation2009), transnational business-governance (Eberlein, Abbott, Black, Meidinger, & Wood, Citation2014), transnational new governance (Abbott, Genschel, Snidal, & Zangl, Citation2015; Abbott & Snidal, Citation2010), voluntary environmental programs (Potoski & Prakash, Citation2005, Citation2010), and voluntary sustainability standards (Bennett, Citation2017). I use TSS here to denote cross-national governing authority, broad sustainability focus, and a diversity of actors involved, including private and public organizations.
6 Interviews were conducted with the understanding that organizational affiliation would be included, but names would be omitted. This decision reflects a balance between encouraging candor in interviewees while still acknowledging background and role.
7 Interview, Global Aquaculture Alliance Employee, 8 December 2014.
8 Interview, Aquaculture Dialogues Convener, 8 December 2014.
9 Interview, Global Aquaculture Alliance Employee, 8 December 2014.
10 Interview, Global Aquaculture Alliance Employee, 8 December 2014.
11 Interview, Global Aquaculture Alliance Employee, 8 December 2014.
12 Interview, Global Aquaculture Alliance Employee, 8 December 2014.
13 Interview, Global Aquaculture Alliance Employee, 8 December 2014.
14 Coca-Cola has committed to sourcing 100% sustainable sugarcane by 2020, although its progress towards this goal remains unclear (Smedley, Citation2014).