Corporate responsibility development paths in the US forest sector

Abstract

In the past two decades, a growing public interest in environmental and social issues has led to intensified pressures on forest industry companies to gain social license to operate (SLO) by meeting often conflicting stakeholder expectations at both the global and local levels. The integration of social and environmental concerns into business operations vis-à-vis corporate responsibility (CR) practices has become an essential step in obtaining SLO. In the global forest industry, the adoption and development of CR practices within a company is likely to be path-dependent, requiring the incorporation of basic sustainability practices prior to successfully implementing more refined ones. In this exploratory study, we use a leading sustainability rating measure, namely the Kinder, Lydenberg and Domini index, to capture the multi-dimensionality of CR and to empirically study the development paths of corporate social performance (CSP) among large US companies. We then apply trajectory analysis based on mixture modelling, which helps to identify the possible CR leaders and laggards, to identify different groups of US forest companies that follow similar CR developmental trajectories. The use of trajectory analysis also facilitates exploring the shapes of the particular trajectories. According to the results, forest companies in the sample can be classified into four trajectories, all of which show consistent progress in the level of CSP between 1991 and 2009. Based on the differences between groups, we further discuss potential areas, which may contribute to gaining and maintaining corporate SLO.