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

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

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

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

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

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

Methods Current understanding of CR Recent evolution of CR ObjectivesMethod Framework explaining the diffusion of CR Content Analysis Grounded Theory

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

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

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

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

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

Sum of frequencies Understanding of CR (cont’d)

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

Evolution of CR (cont’d) Environmental Report133 Annual Report75 Sustainability Report010 Accountability Report01 CR Report pages in 2000 to 746 pages in 2005 Types of report:

Frequency Evolution of CR (cont’d)

% Change

Evolution of CR (cont’d) Words that appeared only in 2005: WordFrequency CSR92 Union(s)50 Competitiveness26 Charitable21 Sponsorship(s)16 Volunteers15 Ethic(s)14 Charity(ies)13 Fraud12 Scholarship(s)12

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

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

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

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

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

References Responsible Conduct of Research (RCR), Data Management Glossary. Northern Illinois University, DeKalb, IL. nois_u/datamanagement/dmglossary.html nois_u/datamanagement/dmglossary.html Glaser, B.G. and Strauss, A.L., The Discovery of Grounded Theory: Strategies for Qualitative Research. Aldine de Gruyter, New York.