Drawing Big Lessons from Small Labels

After reviewing the book’s thesis and the evidence in support of it, this chapter outlines a number of key implications for transnational governance scholarship and practice. It suggests a fundamental rethinking of the sources of rigor and credibility in transnational governance, moving away from a focus on the owners or sponsors of governance and toward an emphasis on the interaction between the governors and the governed community. It then offers practical solutions for making eco-labels more impactful by encouraging them to defy the small is beautiful ethos and expand aggressively outward. The chapter ends by considering the ability of eco-labels to address mounting environmental crises. It concludes that they are inadequate as a freestanding solution given that they do not address rising levels of consumption and are plagued by implementation problems. However, they can, and should, form part of the broader toolbox of governance instruments for addressing transnational environmental problems.

Credibility in Carbon Neutral Eco-Labeling

This chapter further tests the aiming big hypothesis by tracing the origin and evolution of four ELOs that certify carbon neutrality or carbon reduction efforts: The Carbon Trust, The CarbonNeutral Company, Enviro-Mark Solutions, and Carbonfund.org. Through comparative case studies and careful process tracing, illuminated by both interviews and primary document research, the chapter demonstrates that the decision to target large firms in global markets explains superior adherence to best practices in The CarbonNeutral Company and Enviro-Mark Solutions. Conversely, the narrow regional focus of The Carbon Trust and Carbonfund.org explains their comparative lack of best practice adherence. The cross-case comparison proves that a focus on the targets of governance offers more explanatory leverage than a focus on public versus private ownership or for-profit versus not-for-profit structure. The chapter concludes with implications for strengthening the credibility of carbon labels in the future.

Credibility in Sustainable Aquaculture Eco-Labeling

This chapter tests the aiming big hypothesis by tracing the origin and evolution of four eco-labeling organizations in sustainable aquaculture: the Aquaculture Stewardship Council (ASC), Best Aquaculture Practices (BAP), Friend of the Sea (FOS), and Naturland. The chapter argues that stronger adherence to best practices in the ASC and BAP programs is a direct result of their decision to target large multinational retailers for certification. Conversely, the comparatively poor performance of the other two eco-labeling organizations can be traced to their decisions to target smaller firms in domestic markets. The chapter uses comparative case studies and within-case process tracing to reveal how decisions about who to target for certification impacted best practice adherence through the causal mechanisms outlined in chapter 3. The four cases analyzed in this chapter cast further doubt on alternate theories of credibility, such as the relevance of ownership or geographic location to credibility.

Eco-Labels and the Credibility Puzzle in Transnational Governance

This chapter introduces eco-labels, explains where and how they differ, and establishes their empirical and theoretical importance. The book’s central puzzle is set up through an example of how two well-known eco-labeling schemes vary in credibility. The chapter then argues that variation in the credibility of eco-labels can be partly explained by the types of firms and markets eco-labeling organizations choose to target for governance. After briefly previewing the book’s thesis, the chapter summarizes why eco-labels matter, offering empirical examples of their impact on global value chains and situating them in the broader context of transnational new governance. It then introduces the dependent variable for the study—the Index of Best Practice in eco-labeling—which serves as a proxy measure of credibility. It concludes by describing the book’s methodology and offering a roadmap for the remaining chapters.

A Targets-of-Governance Approach to Explaining Procedural Credibility

This chapter argues that the targets of governance condition the procedural credibility of eco-labeling organizations. Eco-labeling organizations that target large firms and seek global market presence—those that aim big—are more likely to follow best practices than those with narrower ambitions. The chapter details three causal mechanisms through which this relationship occurs. First, the heightened critical scrutiny that accompanies aiming big leads ELOs to demonstrate concern for procedural credibility out of a fear of reputational damages from negative media or NGO attention. Second, as ELOs expand their market presence, they seek legitimacy by including a growing community of stakeholders in decision-making. This heightened inclusiveness socializes key decision-makers in a way that reinforces a commitment to procedural credibility. Third, the increased revenues derived from targeting large firms helps ELOs competently perform the various dimensions of best practice. The chapter outlines a number of testable implications.

The Correlates of Procedural Credibility in Transnational Eco-Labeling

`This chapter uses an original dataset comprising information on 123 transnational eco-labeling organizations to probe a series of hypotheses on the conditions for procedurally credible eco-labeling. The hypotheses are divided into three categories that focus on who is governing, where the governance takes place, and what sector or issue area the governance targets. The dataset includes information on best practice adherence across the full population of transnational eco-labeling organizations in 2013. The ensuing statistical analysis casts doubt on neo-Gramscian and rationalist arguments that ownership or sectoral competition are the primary determinants of procedural credibility in eco-labeling. Instead, the regression analyses show eco-labels that are industry sponsored or operating in highly competitive sectors are just as likely to craft credible eco-labels as their independently owned or less competitive counterparts. The statistical results also present a new puzzle, namely, that an eco-label’s presence in multiple markets is strongly and positively correlated with credibility.