Introduction
On 19–20 December 2018, as part of the 15th Global SME Business Summit in New Delhi, Confederation of Indian Industries (CII) and the Ministry of Micro Small and Medium Enterprises (MSME), Government of India, organized a session titled “Building Partnerships Through Global Value Chains”. Attended by leading industrialists and policymakers, including over 500 delegates, the focus of the summit and the global value chains (GVCs) session was on how Indian businesses, specifically small and medium enterprises (SMEs) , can become a part of GVCs and how can SMEs expand and grow their markets. The deliberations identified the need for Indian SMEs to recognize the changing landscape of global trade and to adapt and work around the challenges that presently restrict their growth (Dewan 2018). One of the critical factors identified for SMEs’ integration into GVCs was “compliance with standards”, which include technical and product parameters in addition to the imperative of “ethical trade” (CII and MoMSME 2018). This summit was one of the many recent developments in India whereby Indian government and industry are increasingly recognizing and acknowledging the growing importance of GVCs and that of voluntary sustainability standards (VSS) within it. However, relatively little is known about how these VSS play out across different countries, regions, commodities and sectors. Addressing this gap, this book aims to contribute to deepening this understanding. On the one hand, it offers the policymakers, industry and civil society a first of its kind compilation on VSS in India, bringing together the global scholarship with an India-based sectoral analysis. On the other hand, it contributes an in-depth analysis of select but representative VSS which highlight the operational complexities, alluding to the nuances involved in the interplay of global with the local. In this chapter, we introduce the concept of multi-stakeholder-based VSS and establish the case for the same in India. We conclude the chapter with a summary of all the chapters in the book and a short note on way forward.
Grand Challenges and Collective Action Imperative
The 2030 Agenda for Sustainable Development of the United Nations and the Paris Climate Accord represent collective and normative ambitions of signatory governments and political leaders worldwide. These new global development frameworks highlight and acknowledge the societal grand challenges (Ferraro et al. 2015) the contemporary world is facing—such as poverty, inequality, modern slavery, climate change, migration and sustainable consumption and production. Scholars refer to these grand challenges as “wicked problems ” (Reinecke and Ansari 2016). Non-state entities such as businesses and civil society organizations (CSOs) as key constituents and institutional actors in society too are expected to contribute towards tackling the grand challenges and wicked problems. While they do contribute, their role is becoming even more critical and important in the face of global, national and local grand challenges and related problems.
Business sustainability and business responsibility (or the globally prevalent and accepted term “corporate social responsibility ”—CSR) are now popular notions among policymakers, firms, CSOs and scholars. Among various facets of CSR and business sustainability, voluntary governance and private regulation of business conduct through norm development, international diffusion and institutional transfer—through multi-stakeholder-based sustainability standards—have become both a predominant theme and a dominant logic (Cashore et al. 2004; Draude 2017; Dunn and Jones 2010; Marx and Wouters 2018). Several forms and types of CSR and sustainability-related voluntary governance and steering have emerged in the last few decades, which some scholars have categorized in various ways (Gilbert et al. 2011; Lund-Thomsen and Lindgreen 2014; Nadvi and Wältring 2004; Rasche et al. 2013; Steurer 2013). Our interest and focus in this book is primarily on reviewing and analysing multi-stakeholder-based certifiable VSS covering selected industry sectors in a country context in India. We consider multi-stakeholder-based certifiable VSS different from several other forms of voluntary steering and governance, including from multi-stakeholder initiatives (MSIs) (not all MSIs are certifiable VSS), mandatory public regulations, and firm and industry-based CSR and supply chain codes of conduct (Haufler 2003). “Certification systems in particular have a kind of soft enforcement through market incentives”, as argued by Haufler (2003, 239).
There are multiple definitions for voluntary standards. In general, VSS are “voluntary predefined rules, procedures, and methods to systematically assess, measure, audit and/or communicate the social and environmental behaviour and/or performance of firms” (Gilbert et al. 2011, 24). Haufler (2003, 238) suggests that “These initiatives typically establish a set of standards and/or goals, a framework for decision-making, and a process for achieving the standards. These programs often include the development of certification systems, which are intended to provide market incentives for compliance. Consumers become the ultimate enforcers of the system, with independent certifiers playing a key role in providing information on corporate behaviour”.
While VSS attract huge policy, practitioner and scholarly interest, however, such interest, attention and wide usage do not imply a shared and universal perception and understanding. Citing David Levi-Faur (Levi-Faur 2011) on the conventional wisdom and understanding on regulation as “synonymous with government intervention and, indeed with all the efforts of the state, by whatever means, to control and guide economy and society”, Töller (2017) has summarized the intriguing aspects of voluntary regulation. “In light of such a Weberian conception of regulation, voluntary regulation provokes puzzlement. Here there are no binding rules, no role for the courts, no forcible implementation by the state and sometimes no public agency at all; yet we call it ‘regulation ’ and it obviously succeeds in obtaining desired outcomes, in enhancing public welfare, correcting market failures and reducing social risks, albeit certainly to different degrees” (Töller 2017, 48).
The origins, variety, logics, actors, arrangements, forms and architectures of CSR and sustainability-related VSS make them complex and often less amenable for effective policy and scholarly investigation, analysis and theoretical pursuits (Fransen and Conzelmann 2015; Fransen and Kolk 2007). Further, much of the international scholarship and literature on VSS pays relatively little attention to country-level analysis, barring a few exceptions such as Peña (2016) and Das (2014). We aim to fill this gap in the literature and knowledge with this book on country-level analysis of voluntary governance of business responsibility and sustainability, focusing on VSS in different industry sectors in India.
Evolution of CSR and Sustainability-Related Voluntary Governance and Regulations
Standards are neither new nor a new topic. Supported by engineering logics and discipline, technical standards across industry sectors and areas such as aviation, telecom, finance, chemicals, sports, and in several others have been around for a long time. There exist several long-established institutional structures, actors (state and non-state) and mechanisms—from local, regional and international—for standard setting (including global consensus building), diffusion, and processes for institutional transfers, enforcement and monitoring (Brunsson and Jacobsson 2000; Gulbrandsen 2010). The International Organization for Standardization (ISO) and International Electro-technical Commission (IEC) arguably are the world’s most widely known and long-standing international organizations for setting voluntary technical standards, with institutional mechanisms and linkages in every country sponsored and supported by nation-states (Mattli and Büthe 2003). Convenors of European Group for Organizational Studies (EGOS) 2012 sub-theme 15, “Multiplicity and plurality in the world of standards”, argued, “We live, it seems, in a ‘World of Standards’”, and “standards have come to impact most spheres of economic and social life, quite often with a transnational scope and reach” (Djelic and den Hond 2014). However, voluntary standards in the domain of CSR and sustainability, which emerged in the last few decades, with a new set of non-governmental actors playing active roles, are rather interesting because of their departure from the state-centric regulatory models and approaches (Coen and Pegram 2015, 2017, 2018; Hansen and Coenen 2015; Haufler 2003).
The evolution of CSR and sustainability-related voluntary governance and regulations has been spurred by several factors in the post-cold war era and on the backdrop of the momentum and movement around economic globalization (Levy and Kaplan 2008). Among others, these ...