New Tools for Environmental Protection Education, Information, and Voluntary Measures (2002) / Chapter Skim
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14. Industry Codes of Practices: Emergence and Evolution
14. Industry Codes of Practices: Emergence and Evolution
Pages 235-252
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From page 235... ...
Trade association codes call on firms to move beyond regulatory minimums and to continually improve their efforts in community involvement, pollution prevention, and product stewardship. Until recently, however, most trade associations had done little to monitor the extent to which members actually were putting codes into practice or to sanction those who failed to implement required practices.
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In the past, trade association codes served primarily as defensive measures to improve public opinion and forestall public regulation. Now, however, trade associations are imposing codes on their suppliers and distributors as a condition for doing business.
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From page 237... ...
American Textile Manufacturers Institute (ATMI) Responsible Care, 1989 Responsible Distribution Process (RDP)
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From page 238... ...
Members may choose whether or not to adopt this code, and about onethird of the trade association's members participate. The firms that take part tend to supply customers such as The Gap, Eddie Bauer, and Levi's, which have established codes of conduct of their own (Islam, 1999~.
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The problems of one company color public perception of the industry as a whole. Firms in commodity industries are therefore more likely to develop environmental codes, which are intended to improve the public image of the industry as a whole.
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EFFECTIVENESS OF TRADE ASSOCIATION ENVIRONMENTAL CODES IN IMPROVING ENVIRONMENTAL PERFORMANCE Can trade association codes actually lead to improvements in the environmental performance of members? Firms that belong to the trade associations that have developed codes have a common interest in fostering public approval and a favorable regulatory climate for their industry.
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Establishing Environmental Objectives for Managers A key mechanism by which trade association codes of practice could change environmental performance is by changing the values of managers. Trade association codes could change values by establishing new environmental objectives for member firms.
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At a minimum, trade associations simply require that managers declare their commitment to code objectives. The textile industry' s Encouraging Environmental Excellence code requires only that members describe how they have "worked with suppliers and customers to address environmental concerns" (American Textile Manufacturers Institute, 2002~.
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ACC's position is that it has not expelled any members. In 1998, the ACC began to require firms to establish at least one performance goal and to publicly report progress toward meeting it (American Chemistry Council, 2002c)
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, although all of these companies later fulfilled NACD's requirements and rejoined the trade association (Morris, 1995~. In October 1994, NACD began to require companies to mail their environmental policies to Underwriter Laboratories, a third-party verifier, to ensure compliance with RDP.
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SCVs, unlike MSVs, are not required by NACD as a condition of membership because not all distributors do business with this group of chemical manufacturers. The programs trade associations are using to monitor and sanction code performance are depicted in Figure 14-2.
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(E3=Encouraging Environmental Excellence; RC=Responsible Care; RDP=Responsible Distribution Process; SFI=Sustainable Forestry Initiative.) Source: Lenox (1999~.
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Studies suggest that firms adopt Responsible Care in their own way, at their own pace, and that results in terms of environmental performance vary substantially. This discussion of the effectiveness of trade association codes in improving environmental performance suggests two hypotheses.
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CONCLUSION: WHERE CODES MAY BE ACHIEVING RESULTS Trade associations have developed environmental codes to demonstrate to critical public audiences that members are voluntarily controlling their environmental behavior. Empirical studies of Responsible Care suggest that this codethe most highly developed of all U.S.
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From page 249... ...
Although in the past trade association codes served primarily as defensive measures to improve public opinion and forestall public regulation, codes are now assuming a role in business. Trade associations are adding measures to observe the environmental practices of their business partners, and to sanction, with a decision to do business elsewhere, those who do not live up to their codes.
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Such studies might be helpful to environmental regulators as they consider the role of trade association codes in public policy. Trade associations that require their trading partners to implement code practices are assuming the role of environmental regulators of their supply chain.
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1965 The Role of Trade Associations and Professional Business Societies. University Park: Pennsylvania State University Press.
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From page 252... ...
1999 The Emergence of Trade Associations as Agents of Environmental Improvement. Report prepared for U.S.
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