Is it possible for firms to work together to tackle environmental challenges? In a recent paper, Professor Frances Bowen, Pro Vice-Chancellor for Social Science at the University of East Anglia and CBOS Associate and her co-authors examined the role of collaboration in managing environmental protection, and considered the factors which make collaboration successful.
In their paper ‘Scale matters: the scale of environmental issues in corporate collective action’, published in Strategic Management Journal, Professor Bowen and her colleagues Professor Pratima Bansal and Dr Natalie Slawinski explore how firms can collaborate to tackle issues of environmental protection and conservation. The global nature of the environmental crisis means that firm cooperation is essential if we are to make real progress on targets such as lowering CO2 emissions.
However, firms can find collaboration of this nature difficult, since they seek to balance the need between maintaining their competitive advantage with the need to respond to the climate crisis. In this article, the authors seek to understand how firms that collaborate and take collective action organise themselves to manage common natural resources.
This study is set in the Canadian oil sands, and focuses on the firms that make up Canada’s oil sands innovation alliance (COSIA). The vision of COSIA is to: “enable responsible and sustainable growth of Canada’s oil sands while delivering accelerated improvement in environmental performance through collaborative action and innovation.” Professor Bowen and her colleagues spent two years collecting data from the 12 companies that signed the COSIA charter to understand how this collective action materialised. The data they collected included over 50 interviews, extensive archival data as well as observational data from over a dozen meetings and retreats.
From their data emerged an interesting set of findings, which sheds light on how firms can best organise their collaboration, whilst also maintaining their individual competitive edge. This included developing some joint principles and organising rules, including modularity and boundary setting.
Modularity referred to effectively breaking bigger challenges down into bite sized chunks, which in turn made each issue more manageable. For example, one problem related to an issue known as tailings. Tailing ponds are man made ponds, which contain toxic waste as a by product of the oil extraction process. These ponds were responsible for the deaths of a number of birds, which mistook the pond for a lake. Because there was agreement across the firms as to what needed to be done, and the solutions were geographically limited in scope, they succeeded in developing solutions for the tailing ponds within a relatively short time period.
Governing the work on the tailing projects were also clear guidelines, or boundary setting, on how and where jointly developed technological solutions could be used, thus ensuring that all the companies that invested in the tailing project benefitted equally. For example, any technological solutions developed to tackle tailing issues could only be applied to the Canadian oil sands, thus ensuring that all the contributing parties were rewarded equally for their investment.
By comparison, collaborative efforts like those employed to tackle tailing, were less successful when it came to addressing bigger issues that were not geographically confined, such as greenhouse gas emissions. This is because enforcing geographical boundaries on where newly developed technologies could be deployed would not be effective and the problem was not easily divisible into smaller parts.
The multiparty collaboration among competitors examined in this research is, while becoming more common, still relatively rare. The authors argue that with the environmental challenges we face becoming more urgent, and traditional, coordinated collective action not appearing to slow rates of environmental damage, there is an urgent need to better understand how competitors can collaborate. Whereas prior research has acknowledged the importance of the size of the collaborative that draws from common pool resources, the authors’ key insight is that the scale of the issue also determines the effectiveness of collaborative, collective action.
Header image by Suncor Energy, under licence CC BY-NC-ND 2.0