An Analysis of FSC and BCI Governance Initiatives for Businesses

This essay provides a comprehensive comparison of the governance initiatives undertaken by the Forest Stewardship Council (FSC) and the Better Cotton Initiative (BCI), two non-governmental organizations (NGOs) focused on addressing social and economic challenges. The introduction highlights the increasing role of governance initiatives in the modern economy and sets the stage for an analysis of the effectiveness of these NGOs as regulatory actors. The essay delves into the missions, visions, and operational frameworks of both FSC and BCI, including their certification processes (chain of custody and forest management for FSC, and the BCI's cotton production standards). It explores the broader context of NGOs and their roles in various sectors, particularly in sustainable forest management and cotton farming. The main body of the essay examines how FSC and BCI contribute to addressing key issues such as deforestation, sustainable agriculture, and corporate social responsibility. It further discusses FSC's role in relation to the European Union Timber Regulation (EUTR) and BCI's impact on global cotton production. The conclusion summarizes the comparative analysis, emphasizing the strengths and weaknesses of each initiative in regulating companies and sectors and solving environmental and social problems. The essay utilizes multiple sources to support its arguments and provide a thorough understanding of the two NGOs' governance approaches.

ESSAY

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
INTRODUCTION TO FSC AND BCI...........................................................................................3
MAIN BODY..................................................................................................................................4
CONCLUSION...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
In today’s modern economy, governance initiatives have been taking the power of new
regulatory functions within the global economy. In this regard, various initiatives have had very
different levels of success (Sneyd, 2014). The present report is based upon the governance
initiatives undertaken by two specific NGOs in order to deal with the social and economic
problems being faced by the society. These NGOs are, namely, Forest Stewardship Council
(FSC) and Better Cotton Initiative (BCI). The comparison between both these governance
initiatives have been given in terms of the extent to which NGOs are empowered as regulatory
actors as well as the effectiveness of initiative for regulating the companies and/or sector to
solve the environmental and/or social issues.
INTRODUCTION TO FSC AND BCI
Forest Stewardship Council (FSC) is an international not-for-profit, mission driven,
multi stakeholder company which was found in 1994. This non-governmental organisation is
responsible for setting standards in relation to responsible management of forest in a social and
environmental manner. The mission of this organisation is to encourage promotion of socially
meritorious, environmentally appropriate and economically viable management and preservation
of forests situated within the world. This not-for-profit enterprise holds the vision to ensure that
all the forests situated across various parts of the world fulfil the social, economical and
ecological needs as well as rights of present generations without compromising in any way with
the needs of future generations. Responsibly managed forests strive to render social,
environmental and economic benefits inclusive of adequate, safe and appropriate conditions for
workforce, maintenance and increment of biodiversity as well as environmental amenities
rendered by forests, respect for rights of indigenous people and the well-being of community.
The economic benefits here majorly arise from supply as well as sale of forest products which
are guaranteed to have been responsibly acquired. The Forest Stewardship Council (FSC)
system gives two types of certifications in order to ensure that their core values are maintained
from forest to consumers, namely, chain of custody and forest management (Moog, Spicer, and
Böhm, 2015). Multi Stakeholder Initiative (MSI) of this entity can be referred to as those multi-
sectoral initiatives which aim at bringing together a wide variety of stakeholders in order to
generate governance solutions that can provide assistance in combating with the social as well as
environmental issues. The stakeholders here are inclusive of participants of labour unions,

representatives of corporations as well as NGOs, trade associations, scientists, academicians,
ethnic or community organisations and at times may even include sometimes representatives of
governmental or inter-governmental organizations. Over years, MSIs have been utilised by
practitioners belonging to a vast variety of fields. These initiatives were earlier developed to
address the governance issues associated with regional or local common property resources like
forests, fisheries, water catchments. Now these initiatives strive to address challenges such as
transnational environmental governance, management of global aid, climatic change mitigation
and wider issues such as Corporate Social Responsibility (CSR).
BCI (Better Cotton Initiative) is a not-for-profit organisation aimed at promotion of
optimal standards within cotton farming and associated practices in 21 nations across the globe.
By way of cooperation and coordination with a number of multi-stakeholder group of
organisations, this enterprise aims at defining as well as establishing a better and more
sustainable manner of cotton production across the world. Members who are a part of the global
cotton supply chain have now indulged in collaboratively addressing the adverse impacts of
mainstream cotton manufacturing by providing support to this globally recognised manner of
cotton production, generation of market demand for Better Cotton and sharing information as
well as knowledge to allow continuous improvement on everyone’s part. With 2017, BCI
accounted for 14% of the overall cotton production within the world. During the 2016-17 cotton
season, over 1.3 million licensed BCI farmers succeeded in manufacturing 3.3 million metric
tonnes of Better Cotton lint allowing a record breaking level of cotton production achieved in a
sustainable manner with a view to gain entry into global supply chain. The retail organisations
who have partnered with BCI are Gap, IKEA, H&M, Levi Strauss and comprise of funding
associates from United States Agency for International Development (USAID) (Sneyd, 2014).
By the closure of 2017, Better Cotton Initiative had approximately 1,197 members inclusive of
1039 suppliers and manufacturer members; 85 retailers as well as brand members; 31 civil
society members; 32 producer organisation members and 12 associate members. BCI fulfils the
goals of UN in order to attain a better water sustainability at global level along with sustainable
agriculture
MAIN BODY
Non-governmental organisations or commonly regarded as NGOs, are defined as not-for-
profit organisations which are often funded by way of government and are found to be active in

fields such as educational, healthcare, social, humanitarian, human rights, public policy,
environmental and other such key areas. These can be said to be a subgroup of all the entities
that are found by citizens inclusive of clubs and other such associations which render benefits,
services and premises only to the specific members of these organisations. Sometimes, the term
“NGO” is regarded as a synonym of "civil society organisation" which implies that it is
considered as an association founded by citizens. As per the definition of NGO given upon
NGO.org, it is a not-for-profit as well as voluntary group of citizens that is organised on various
levels such as local, national or global level (Shen, 2014). It further proposes that such
organisations are largely task-oriented and are usually run, managed and controlled by people
who possess a common interest within society. NGOs are ascertained to be performing a vast
range of services as well as humanitarian operations such as bringing the concerns and/or
appeals of citizens to the concerned government, administration and monitoring of the policies
and encouraging the political participation by way of stipulation of data.
NGOs are in general funded by way of donations but some of these associations stay
away from official funding on the whole and are found to be primarily run by way of volunteers.
NGOs can be said to be an extremely diverse groups of organisations which are indulged in a
vast variety of processes and activities and take several forms across various parts of the globe.
Some of these NGOs may be registered for the purpose of tax exemption while other may have a
charitable status based on determination of social purpose (Pattberg, 2005). Other purposes may
include religious, political or other such interests. Post the closure of World War II, NGOs have
an increasing role within international development by way of taking control over the fields of
poverty alleviation and/or humanitarian assistance. In this regard, the quantum of NGOs situated
across the globe is estimated to be approximately 10 million.
Sustainable forest management (SFM) is widely regarded as one of the key global social
and environmental issues in context of future with regards to both, protection of biodiversity as
well as mitigation of climatic change. The FAO (Food and Agriculture Organisation) of the
United Nations considers Sustainable forest management as an effective approach which strive
to strike a balance between the socio-cultural, environmental and economic objectives of the
management in association with the “Forest Principles” adopted at United Nations Conference
on Environment and Development (UNCED) in 1992. One of the key issues that are a part of
SFM is ascertained to be halting deforestation. The sustainable and responsible management of

forests as well as the halting deforestation pose a substantial threat for the regulatory
governance. Some authors and academicians have been highly skeptical of the capabilities of
states as well as global organisations to deal with the challenge of deforestation. The initiative of
protection of forests across the world is gradually more being taken up by the non-state market
governance mechanisms and private actors. One of the most well-known of these non-state
market governance mechanisms is the third-party certifications which are independently
accredited organisations which give certificates to companies for giving their contribution
towards promotion of SFM. Over the last two-three decades, many of such certification schemes
have become effective. To address social and environmental issues like SFM across the globe, a
number of national, multilateral and private policy initiatives are continuously being taken up
and developed. The most well renowned and well established private initiatives over years has
been the forest certification which is accredited as “one of the most innovative and startling
institutional designs of the past 50 years” for taking up the initiative to address as well as
promote Sustainable Forest Management at specific level and global environmental governance
at general level. In this regard, FSC is a multi-stakeholder membership-based organisation that is
a wholly governance structure comprising of a general assembly where the members are
represented, a board of directors and an executive director (Klassen, Romero and Putz, 2014).
The certification initiative started by this organisation is in relation to responsible management
and preservation of forests within the world. In general, the certification initiatives strive at
setting and implementing the standards for the sustainable and responsible management of
forests and further communicating this initiative to the external world so that citizens across the
globe take up measures to give their contribution towards it. Forest management (FM)
certification lays the foundation stone of the Forest Stewardship Council scheme and can be
referred to as the certification of forests. Chain-of-Custody certification (CoC) is a system that
tracks supply chain: a product that possesses a CoC certificate has been developed out of the
ingredients that originate from a FM-certified forest. Certified forest area is expanded by 61%
during 2008-2015 with the Forest Stewardship Council (FSC) area constantly growing by 81%
to 186 million hectares in 2015 and that of the Programme for the Endorsement of Forest
Certification (PEFC) increasing by 25% to 272 million hectares during the same time period
(Blackman, Goff and Rivera-Planter, 2015).

Further, FSC works to ensure that all the forests across the globe are managed
responsibly. In this regard, this organisation has also been actively working as a part of EUTR.
The European Union Timber Regulation (EUTR) came into effect during March 2013 with the
sole motive of prevention of sale of illegal timber as well as timber products within the EU
market place. Any market player which tries to place timber products in market for the very first
time has to mandatorily ensure that the timber used to make the goods has been harvested in a
legal manner as well as exported in a legal manner from the nation of harvest. This regulation is
applicable on companies belonging to diverse sizes which are either manufacturing timber
domestically or importing timber into European Union. This tends to comprise of a variety of
timber products inclusive of veneer, plywood, furniture and paper (excluding its recycled
elements and printed media) and constitutes of three main obligations.
The first is Timber accompanied by a Forest Law Enforcement, Governance and Trade
(FLEGT) or Convention on International Trade in Endangered Species (CITES) licence will be
bound to be accepted as legal. In all the other instances, operators have got to apply ‘due
diligence’ when they bring in imported and/or domestic timber or timber products in EU market.
The second one is that it restrains the placing of illegitimately harvested timber and goods
developed from unlawfully harvested timber within European Union market (irrespective of the
fact that such timber is of imported or domestic origin). The third one is that the traders (those
after operators in relation to supply chain) need to maintain accounts of their suppliers and
clients (excluding the end consumers). In this manner, operators can be traced any time. FSC has
functioned to make sure that all the elements of FSC certification and their standards are in
alignment with the EUTR (Angelstam and et. al., 2013). Actors practicing due diligence can
make use of FSC certification as a key ingredient of risk assessment as well as mitigation. To
assist this, FSC has formed guidance material upon EU Timber Regulations and FSC national
offices have provided assistance to actors as well as authorities to understand the manner in
which FSC certification can be utilised as a tool for fulfilling the requirements. Forest
Stewardship Council has also given an active participation within the first EUTR review process
and is in close touch with the European Commission and the EUTR/FLEGT Committee of EU
Member States. This demonstrates the authority and power that this NGO possesses to play as a
regulatory actor within society to ensure responsible management of forests across the globe by
companies and key players within corporate world. However, over years, it has been noticed that

FSC has been working in a positive direction yet the scope of forest certification initiated by this
enterprise is limited to some context and can be further enhanced to promote SFM in a better
manner.
On the other hand, Better Cotton Initiative (BCI) has been regarded as one of the largest
cotton sustainability programmes that have been running across the globe. This initiative is
focussed upon promotion of cotton production in a sustainable manner with a view to promote
sustainable cotton manufacturing across the globe. BCI stewards the Better Cotton Standard
System which is aimed at enhancing the reach of this not-for-profit organisation to companies
and fashion industry so that sustainability within cotton production can be promoted at all levels
and across all nations of the globe. Last year, this organisation along with its partners rendered
training to over 1.6 million farmers across the globe on employing effective and sustainable
agricultural practices (Fayet and Vermeulen, 2014). As a consequence of this, BCI was able to
mobilise €8.9 million in field-level investment. BCI is a joint effort which focuses upon
encompassing companies of all the sizes all the way from farms to fashion and textile brands
with a view to drive the overall cotton sector towards sustainability approach. Through their
partners, BCI trained over 1.6 million farmers of whom 1.5 million received licenses during the
year 2015-16. BCI Farmers manufactured 2.5 million metric tonnes of Better Cotton lint. This
was enough cotton to make 2.5 billion pairs of jeans (Roos and et. al., 2015). Further, they
produced Better Cotton on 3.5 million hectares, which is more than the land mass of Belgium.
This significantly demonstrates the scale and level of operations of company.
By 2016, BCI possessed 986 members (inclusive of 846 suppliers and manufacturers, 66
retailers and brands, 33 civil society members, 31 producer organisations and 10 associate
members). Out of these, Retailer and brand members sourced out 461,000 metric tonnes of
Better Cotton while the Spinner members sourced 807,000 metric tonnes of Better Cotton
(Kozlowski, Searcy and Bardecki, 2015). Also, BCI worked with 66 strategic and
implementation partners who were from the private and public sectors, and civil society with a
view to promote cotton sustainability across the globe. Besides this, various organisations have
partnered to be a part of this significant social and environmental concern. Some of the most
significant and well renowned examples of these are ASOS, House of Fraser, Adidas, A-
Z, Burberry, Burton Snowboards, Carlings, BikBOk, Coyuchi, H&M, Cubus, Days like This,
Dressmann, EILEEN FISHER, Sainsbury’s, Mantis World, F&F at Tesco, Greenfibres, Hanky

Panky, MetaWear, IKEA, KappAhl, Kathmandu, SkunkFunk, Indigenous Designs, Volt,
Levi’s, Kering, Lindex, M&S, Otto Group, Nike, prAna, Timberland, Woolworths, Urban and
Wow (Zulfiqar and Thapa, 2018). Thus, it can be seen that the power that BCI possesses and the
initiatives that have been undertaken by this organisation are superior to those taken by Forest
Stewardship Council.
CONCLUSION
From the above discussion it has been concluded that non-governmental organisations in
today’s modern era are not just working for the mere purpose of meeting societal needs but
some of them have even started taking part in the governance structures and serving as
regulatory actors. In this regard, Forest Stewardship Council and Better Cotton Initiative are two
initiative-taking NGOs which have actively been working as regulatory actors and taking
initiatives to deal with the social and environmental issues being faced by society as a whole
across the globe. However, from the above analysis, it has been analyse that FSC has been
working in a positive direction yet the scope of forest certification initiated by this enterprise is
limited to some context. Thus, it can be gained that BCI has an edge over FSC in case of serving
as regulatory actors and taking initiatives in relation to corporation and sectors so as to ensure
fulfilment of the objectives for which they had been setup years ago.

REFERENCES
Books and Journals
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