Escaping the “Teenage” Years: The Politics of Rigor and the Evolution of Private Environmental Standards

Abstract

While there is considerable literature on firms' motivations to form and join private environmental standards, less has been written on motivations to strengthen standards, once created. Using the Roundtable on Sustainable Palm Oil (RSPO) as a case, our study examines the politics of rigor, understood as value-chain traceability and on-the-ground requirements, within private environmental standards. We use polytomous variable latent class analysis to cluster RSPO members' reported challenges in sustainable palm oil and model the membership in clusters expressing concerns that the standard is either insufficiently rigorous or too difficult using random effects panel logistic regression. We find that more brand-exposed members are more likely to request greater rigor. Members in the middle of the value chain are more likely to voice concerns about the standard being excessively difficult, particularly noting costs and the challenge of securing supplies. We argue that avoiding reputational risk is a primary motivator for standards adherence, and, as a result, demands for increased rigor come primarily from firms with higher brand exposure. We conclude that the distribution of standard members across the supply chain can be a significant determinant of the way private environmental standards evolve and the level of rigor they achieve.