University of Naples “L’Orientale,” Naples, Italy
Abstract
Collaboration, contamination, and wide participation are the common denominators of innovation and sustainability. This work aims at studying engagement as the basis for innovative projects that respond to an objective of social and environmental sustainability, and describes the multistakeholder committee as the ideal container for realizing the engagement.
The collaborative sustainability is defined as an effective and credible action for the creation and dissemination of sustainability of the supply chain. This chapter explores the experience of the Ethics Committee of Color Gemstones, by Assogemme, in Italy, analyzing its planning and operation activities. It is set up with the aim to produce a sustainable innovation process, aimed at the creation of “new” standards for traceability of jewelry products made with color gemstones, and at the definition of an ethical code for the companies of this business.
Keywords: co-sustainability, co-innovation, multistakeholder committee, jewelry business.
Innovation and Sustainability: Focusing on Stakeholder Engagement
Both in literature and in “laboratories,” innovation and sustainability are resorting more and more to models of collaborative involvement of resources for the exchange of skills, referring therefore to the perspective of stakeholder engagement. This perspective asserts a core value: the position of responsibility required of firms and stakeholders in order to engage in the sharing of information, in the construction of a dialogue, and in an ongoing commitment to solve problems together (Svendsen and Laberge 2005). The relational aspect is therefore a key element; the creation and subsequent consolidation of the social capital of the company is strategic, because it represents the “glue” that holds together the social relations (Burt 1997; Putman 2000; Ayios et al. 2013).
In other words, the key items that make this approach possible are as follows: participation, expanded participation, sharing (of information and dialogue), and engagement with the goal of building a relationship and solve a common problem.
In terms of innovation, open sources and open innovation are inspired by this perspective. The first emphasizes the exchange to innovate, and the second, which was formalized by Chesbrough in 2003 as opposed to the closed innovation concept, emphasizes the need for businesses to be open to buying or selling knowledge, assessing which information to gain and which one to sell out through the most appropriate forms (patents, license agreements, spin-offs, etc.).
The focus on the increased complexity of knowledge processes, which are the backbone of new technologies and innovation, leads firms to search beyond their own boundaries for valuable knowledge and skills in order to complement their own capabilities (Becker and Dietz 2004). Starting from this perspective, some studies have underlined the positive effects of accessing complementary technological resources (such as skill sharing). Such resources can contribute to a faster development of innovations, an improved market access, economies of scale and scope, cost sharing, and risk spreading (Ahuja 2000; Cassiman, Veugelers 2002; Hagedoorn 2002; López 2008), as higher overall performance levels (Abramovsky et al. 2008) and a higher R&D intensity (Becker and Dietz 2004; Sampson 2007) since they are able to share investment, costs, and may take advantage of partners’ resources and capabilities, an increase of the profitability of R&D (Belderbos et al. 2003).
Another theoretical path is the attention given to the collaboration among all types of companies, large and medium–small enterprises (Hagedoorn, Albert, and Vonortas 2000), or to the ability of large firms to manage spillovers. Firms involved in R&D cooperation tend to be relatively large and have a high share of R&D expenditures (Fritsch and Lukas 2001). This agrees with Negassi’s findings, where R&D increases with size and R&D intensity (Negassi 2004). Regarding the actors of the product line, some studies have underlined that vertical spillovers, associated with suppliers and customers, have a more significant effect on the R&D performance and welfare than horizontal spillovers, which are linked to universities, research institutes, and competitors (Atallah 2002). In addition, cooperation with customers and public sector institutions is positively related to the success of product innovations, and the cooperation with suppliers and universities has a more significant influence on the success of process innovations (Freel and Harrison 2006).
Other research paths examine innovation cooperation strategies, distinguishing those companies that follow an incremental path build on the firm’s existing internal knowledge from those that provide knowledge to aid defining trajectories that are new to the firm (Bercovitz and Feldman 2007); in the latter case, collaboration with universities and government labs is the most common examples.
Cooperative arrangements for innovation are more common among firms that introduced innovations that were new not only to the firm, but also to the market. Furthermore, the intensity of R&D activities tends to increase the likelihood of a firm having cooperative arrangements for innovation with external partners (Tether 2002). The search for external partners is normally associated with more complex innovation processes, e.g., those that combine both process and product innovation (Piga and Vivarelli 2004). Regarding the complexity of innovation process, Bayona, Garcia-Marco, and Huerta (2001) and Miotti and Sachwald (2003) provide evidence that the firms operating in more technology-intensive sectors have a greater propensity to establish cooperative R&D and innovation agreements. Dachs, Ebersberger, and Pyka (2008) also observe a relation with the speedier processes of knowledge generation and use.
A good review of these different perspectives is found in a study (de Faria, Lima, and Santos 2010), which analyzes the importance of cooperation partners for the development of innovation activities as well as the determinants of this development.
Even in relation to the issue of sustainability, there is a strong reminder in the literature, and not only there, of an action of engagement of stakeholders. Acting responsibly means supporting investments and costs, as well as forming appropriate skills, which are often unaffordable actions for a single actor, especially for a small- and medium-size firm. Many are the sources in which it is suggested to implement strategies for corporate social responsibility (CSR) based on a cooperation between companies and institutions, either local or national (Pulci and Valentini 2003; Del Baldo 2009), partly because the wide participation of more actors will enable the development of larger projects. This will allow these actors to enjoy the benefits deriving from them, both inside—for the companies belonging to them—and outside—for the beneficiaries of projects (Piciocchi, Vollero, and Palazzo 2009; Cesaretti and Annunziata 2011). The expanded involvement stimulates the exchange not only of skills, but also of instances and needs; it legitimates projects and provides them with the necessary conditions to be developed and effectively achieve the estimated results. They are the conditions that are defined by some authors as a relational state (Mendoza 1996; Albareda, Ysa, and Lozano 2004; Midttun 2005), or by others, from a different perspective, collaborative governance (Zadek 2006), or even corporate responsibility and responsible competitiveness clusters (Zadek et al. 2003; Sancassiani et al. 2007). Moreover, it was noted that the intensity of the “mechanism of contamination” between different actors belonging to the network and the “modalities of communication” affect the ability of the individual components to implement structured systems of sustainability and influence the degree of social responsibility of other actors in the network (Caroli and Tantalo 2011).
With particular reference to SMEs, the literature suggests to act through an approach based on the local network, where these actors can take advantage of the opportunity to act as a metaorganization, while institutions can play a key role as intermediary for the promotion of joint strategies inspired by social responsibility (Antoldi, Cerrato, and Todisco 2008; De Chiara 2012). Also the institutions, noting the lack of adoption of instruments for CSR, which was mainly motivated by the difficulties encountered by companies in relation to cultural and financial aspects, suggest to create a scenario for small business based on a dialogue with stakeholders (UNIDO 2007).
The creation of a network also seems to be an appropriate way to develop the necessary skills to help the interpenetration of social responsibility in defining business strategies, thereby making sustainability an integral part of the strategy also pursued by individual companies (Molteni, Pedrini, and Bertolini 2006). However, we must be aware that the direction given by the network is inevitably affected by the space–time contextualization of operational activities from the network, as well as by the technical and organizational aspects of the production processes, with the important consequence that no solution can be assumed as a standard that is replicable in all production chains and in any territorial context (Del Baldo and De Martini 2012). The network that develops active mechanisms of participation manages and governs the institutional socioeconomic fabric, and allows to recover and strengthen the identity elements of the territory in which it operates (Del Baldo and De Martini 2012).
A particular line of research analyzes the collaboration among the actors in the supply chain in terms of sustainability: logistics social responsibility, purchasing social responsibility (Carter and Jennings 2002), as well as sustainable supply chain management (Teuscher, Grüninger, and Ferdinand 2006) are some approaches that emphasize the effectiveness of the adoption of CSR practices in a collaborative approach to management, aimed at involvement of stakeholders at different stages of the implementation process (Maignan, Hillebrand, and McAlister 2002; Vurro, Russo, and Perrini 2009 ). The supplier plays a strategic role in the implementation and success of the strategy of CSR (Murphy and Poist 2002; Carter and Jennings 2004; Carter and Rogers 2005; Andersen and Skjoett-Larsen 2009; De Chiara and Russo Spena 2011); moreover, it is considered the best practice to develop CSR strategies in consultation with the main suppliers and other stakeholders in the community of a firm (Waddock and Boyle 1995).
The engagement appears to be functional to the creation of a climate of confidence, reduction of costs associated with trade, and improvement in the effectiveness of the actions (Cox 2004; van Tulder, van Wijk, and Kolk 2009; Russo Spena and De Chiara 2012).
“Co-sustainability”
The engagement is an essential activity for a company that more and more expresses a social function. There are many theoretical positions that emphasize how the company today can only be seen as a “social process in which an economic process is realized” (Bartels 1967); therefore, it must be founded on the combination of “sociality and economy” (Sciarelli 2007), and the social responsibility is a fundamental component of “being and of doing business” (Caselli 1998).
Regardless of the definition of a company that one wants to adopt (collection of resources, open system of socio-technical type, and set of tasks addressed to the satisfaction of human needs), there is no doubt that a company finds its reason of being in the bundle of relations that it must activate, internally and externally, to perform its function (De Chiara and Delli Carpini 2009).
Collaborating with stakeholders to pursue sustainable behavior triggers the participatory process that allows it to reach the formulation of shared objectives and actions, so that—first of all with regard to the actors of the supply chain—liabilities, costs, and benefits are well balanced throughout the production chain. Also by expanding the range to include in the participatory process the market, the institutions, and the entire community, a joint and shared action can be achieved by all stakeholders with the aim to pursue sustainability projects directed to a common goal, which could be defined as system sustainability.
By collaborative sustainability, co-sustainability, it is meant therefore:
1. A pattern of behavior common to most economic actors, inspired by sustainability, that is to say to those cardinal principles of environmental protection and human rights, as well as declined in the international codes of conduct (Green Paper of EC, Guidelines of OECD) designed and implemented within B2B relationships, or network of companies belonging to the same chain or chains that are intertwined in the production of semifinished and/or finished products.
Among the participating actors, this model is supported by the exchange of knowledge and skills, which not only stimulates the members of the network to the research and implementation of better solutions, but it will especially avoid dystonias in actors’ behaviors that would undermine the effectiveness of the project and achievement of the goal of sustainability.
In fact, the credibility of a sustainability project in relation to a product/service or process regards its impact in terms of an actual effect on the whole community. Therefore, a wide participation, such as those involved in the supply chain, will prevent the reduction or cancellation of a company’s impactful actions by the unethical behavior of other actors belonging to the same chain.
2. The collaborative behavior addressed to a sustainable project, which allows a wide participation of stakeholders—including also the institutions and the community—will really foster high-impact initiatives; it will allow to share objectives and actions to be implemented with the ultimate aim of achieving a really common good.
The importance of engagement of stakeholders is supported by a wide literature and, in the perspective of a shared sustainability project, many studies emphasize the importance of moving to a systematic management of the supply chain based on trust, safety, traceability, and strong partnerships with stakeholders, from suppliers to distributors and, finally, to the end customers (Perrini, Pogutz, and Tencati 2006; Perrini, Russo, and Tencati 2007; Russo and Tencati 2009). In many cases, however, the collaboration, even if enlarged, is not sufficient and, as it has been pointed out from the perspective of Collective Impact, “large-scale social change requires broad cross-sector coordination a commitment of a group of important actors from different sectors to a common agenda for solving a specific social problem” (Kania and Kramer 2011, 36).
Participation, sharing, organization, and coordination are essential to accomplish an act of collaborative sustainability. The aim is creating a “learning alliance,” in which a range of stakeholders—typically located at different levels and within different domains but connected by a common interest in promoting inclusion—come together as a group to optimize relations and break down barriers to learning. It is an opportunity to create new relationships and networks in which a group takes collective action to address an issue, to solve a problem, or to assess new opportunities in the field of sustainability.
This alliance may be structured as a multistakeholder committee, a container that is used to exchange skills, share experiences, and start a process of participation in decision-making processes that already appears as a first important result, since it represents a learning experience for all, which can then affect the action planning. The process of participating in a multistakeholder committee, sharing experiences and taking part in decision-making processes, and debating on the selection of good practices and the direction of the project will be an empowering process and a learning experience for all members. The committee, going through the process of working together and of identifying change and solutions, will increase its ability to work together. This kind of collective action is based on dialogue, participation, and empowerment.
The processes of setting up and running a multistakeholder group should have as its starting point the definition of the purpose, or rather of the project, identifying the objectives on the short and medium term. This base is needed to start a process not only of discovery, but also of imagination and of the type of knowledge and expertise that the committee needs. This knowledge leads to identifying organizations or persons in possession of the necessary skills, and it should also take into account both the research institutions and civil society groups that have expertise on the project.
The next step involves the definition of the role of the group that has formed, by distinguishing task support and supervisor processes role (advisory committee) from a more complex task of defining the decision and approval of proposals brought to the discussion (Steering Committee). Finally, the roles and responsibilities of the individual participants in the group would be defined by answering the question on how each member can contribute, in order to outline the governance structure. This has the important task of the government of the committee; it must define the rules and processes by which decisions are made, but first it has to define the principles that inspired the components, which ensure an effective collaboration. Moreover, the activities to be carried out by the committee should be defined, as well as its mode of operation. Therefore, for a multistakeholder committee to function effectively, there are key steps that should be taken in order to engage all members of the committee and to provide the base for an effective participatory body (Figure 12.1).1
Figure 12.1 Several steps for the establishment of a multistakeholder committee
Why the Jewelry Business?
The decision to investigate the co-sustainability and also describe the operation of the multistakeholder committee for the resolution of the best practices in the context of sustainability is attributed to the experiences that are taking place in gold and jewelry business. This business presents high ethical issues, which in part go back to the structural characteristics of the jewelry industry, such as: (1) a strong dispersion of the activities of the value chain—from the goldmines, mines of diamonds and platinum situated in Africa, Canada, Australia, and Russia, cleaning and processing activities in India, China, and Turkey, to distribution in the United States, European Union, Japan, and the emerging markets of China and India; (2) a strong separation between the decision-making activities that, especially in diamonds industry, are concentrated in the hands of a few large firms of developed countries, and the operations/production activities, in which prevails a strong fragmentation with a localization of production sites especially in emerging countries and in the developing ones. In addition to fragmentation of activities and dislocation of the same in strongly contrasting areas, there are two more kinds of problems: the presence of operators belonging to different cultural value systems, which, therefore, affects the interpretation of the significance of the principle of social and environmental sustainability; and the heterogeneity in the composition of the operators, which generates a diversity of patterns of behavior, as well as the risk of establishing a breeding ground for the onset of action of power by large corporations against small operators of the supply chain.
The sector of the jewelry is exposed to strong ethical risks, in the dual role of environmental pollution and human rights violations,2 which has requested several proposals to achieve a responsible chain of gold, diamond jewelry, and other precious stones. In these initiatives, it is possible to find examples of co-sustainability and multistakeholder committees, which are designed and developed envisaging the enlarged participation of stakeholders and the sharing of objectives and actions for the development of standards/certification systems of gold and diamonds.
So is the experience of the Kimberley Process, the agreement finalized and approved by the joint efforts of the governments of many countries involved in the extraction of diamonds, multinational manufacturers of diamonds, and civil society. Institutionalized in November 2002, following the approval of the United Nations (13 March 2002), the Kimberley Process Certification Scheme (KPCS), which takes its name from the town of Kimberley in South Africa where, in May 2000, the representative members of the different categories of stakeholder met, is a certification system to trace diamonds and to ensure that they come from legitimate mining equipment. Currently, this certification system is the most effective tool to protect the diamond industry and above all to ensure that the profits generated by this activity can also benefit local communities and the individuals who work there, assuming that the diamond is a natural resource and should bring benefits to all stakeholders. The system also allows to avoid that the extraction can finance the purchase of weapons and fuel conflicts as well as civil wars, and can cause serious human rights violations, which was a rather common situations, prior to the agreement, so much so to coin the definition of blood diamond or conflict diamonds (UN 2001).
Even the experience of the Responsible Jewellery Council—the international nonprofit organization founded in 2005 that contains a growing number of companies operating in the sector of jewelry (diamonds, gold, and platinum group metals)—has the aim to build a responsible supply chain for diamonds, gold, and platinum group metals, “from the mine to the consumer.” The organization has developed a reference framework for the sector by creating a series of standard Code of Practices and Chain of Custody to promote responsible business practices and standards. These results have been achieved through the work of the RJC Standards Committee, a committee with 14 members, so composed: “elected RJC Member representatives, two from each Member Forum, and up to 12 external participants from NGOs, related standards organizations and other experts.”3
The committee designs, implements, and continuously improves the RJC Certification, as well as “provides policy advice on the consultation and engagement of stakeholders during standards development activities” (Figure 12.2).
Figure 12.2 Responsible jewellery council characteristics
Source: Responsible Jewellery Council
Another important experience of co-sustainability is that of the Organization for Economic Cooperation and Development (OECD), which drafted the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-affected and High-risk Areas, a guide that offers suggestions for the responsible management of global supply chains of minerals, in order to help companies to respect human rights and do not contribute to conflict through their activities. The OECD has developed a specific supplement to the mining activity in the gold sector and, also in this case, it works in the form of a working group, formed to “OECD, ICGLR and other partner countries, international organizations, industry at several levels of the gold supply chain, international and local civil society organizations, expert consultancy groups and other independent experts” (OECD 2011). In the official documents it is declared: “This work is the first example of a collaborative government-backed multi-stakeholder initiative on responsible supply chain management of minerals from conflict-affected areas” (ibidiem, p. 1).
The multistakeholder committee had the task to discuss the first draft of the Supplement on Gold and has received great appreciation from the participants for its mode of constitution. The importance of a broad participation for the success of the project has been repeatedly reaffirmed by the same committee that has declared: “(. . .) some stakeholders that would be vital to the success of due diligence efforts for conflict-free gold supply chains should be invited to participate in the OECD-hosted working group on gold. Participants considered it a priority to invite key non-member countries and companies in the gold supply chain based in those countries. It was clarified that relevant non-OECD countries had been invited. (. . .) such as customs authorities, finance ministries and central banks, should participate to share their relevant expertise” (ibidiem, p. 5).
Empirical research has therefore focused on this sector, choosing to analyze the experience of the Ethics Committee of Color Gemstones, of Assogemme, in Italy, through the study of documents (regulation, verbal) made available by the committee and carrying out talks with the president of the committee.
The Experience of the Ethics Committee of Color Gemstones, Assogemme
The market for colored gemstones is worth U.S. $10–12 billion a year and 80 percent of it comes from small-scale mines: the supply chain from the mine to the market is highly fragmented with a high degree of opacity. The high value of the gems makes illegal activities likely, which are often characterized by the involvement of criminal groups (UNICRI 2013).
In order to contain this risk in Italy, Assogemme (at Confindustria Rimini) has launched the Ethics Committee of the Color Gemstones (Figure 12.3) whose main objective is “(. . .) to prevent that in the supply chain occur exploitation of minors and workers in general, while ensuring fair wages and healthy workplaces. These objectives are only apparently simple, because their achievement is made very complex by the immense extension of the supply chain and production areas” (Paolo Cesare, president of Assogemme).
Figure 12.3 Features of the ethics committee of the color gemstones of assogemme
Established on July 17, 2013, the committee is promoted by Assogemme, in the person of its president, and in its initial composition it is an expression almost exclusively of the jewelry industry. Among its participants, there are testimonials from leading companies such as Bulgari, Gucci, Pomellato, and Bruni, some members of the SMEs for the production of jewelry, members of the scientific world, which represent the scientific committee within the ethics committee, made up of gemologists, and finally the representative exponents of the major industry associations, Assogemme, Responsible Jewellery Council, Federorafi.
In the setting phase, these expertise can be classified into three types: the specific business, gemological scientific research, and business institutions with characterizing features of the jewelry industry.
The committee has adopted a “Regulation for the operation of the Ethics Committee of the Color Gemstones,” which in section 1 (Scope of the Rules) defines that “The present rules govern the activities of the Ethics Committee for the Color Gemstones as part of the Italian Association of precious stones and similar ‘Assogemme.’”
The purpose of the committee, set in section 3 (Purpose), is the “Drafting of a procedural code related to the production and marketing of the color gemstones according to the principles of ethical conduct.” It is therefore a committee with a role of steering committee, namely, the definition of the decisions and approval of proposals brought to discussion by the working groups. Section 9 (commissions and working groups) defines that “In carrying out its activities, the Committee can work in committees or working groups (. . .) the President, after consultation with the Committee, may designate a person responsible for individual components or areas of expertise of the Committee.”
At its establishment, the governance of the committee consists of the president of the ethics committee, the secretariat, and two subcommittees: one called “scientific committee,” with a president, a vice chairman, and members who belong to it, and another that includes the major brands of jewelry, also organized with a chairman and a vice president.
In the regulation of the professional relationship between all participating members, research has shown that the presidency is determined to build on existing basic principles of the OECD on corporate governance; principles that have already informally animated the constitution of the same committee in the invitation to members to participate.
The activities of the committee (section 9—Duties of the Committee) are broad and diversified. They include the formulation of a code of ethics and the statement of the purpose and objectives. Fields of application, the materials, and actors (subjects and objects of the code of ethics) have been preliminarily defined together with the guiding principles, and the mode of assessment and verification of conditions: (1) sociopolitical ones in the countries of origin of color gemstones, (2) socioeconomic ones in the sites/countries of origin and transformation of color gemstones, and (3) of legality and transparency in the countries of the chain (producers, processors, and exporters importers). Finally, the committee shall define the detailed procedural rules for investigations of the aforementioned conditions, considering the feasibility and the operability, and the manner of presentation of the finished product to the customer.
A committee operates for three years, and its components continue to perform their functions until the appointment of the new organization (section 4); the committee members meet in an ordinary session, usually at least once a year (section 6). The president convenes and chairs the meetings, establishing the agenda on the basis of the indications of the components, and coordinates the work (section 5); the committee establishes, for each year, a report on the situation of projects carried out for the previous year, which will be presented to the board of directors of Assogemme at the final statement of the association (section 10); it deals with the association in a consistent and effective cooperation; it can request data, documents, and information related to matters of competence; and it provides information and/or projects that are useful to the bodies of the association, who have the task of formulating proposals and implement interventions related to topics and subjects including those pertaining to the same committee (section 11).
The committee is the only body at a national and international level, among recognized associations, that was set up and is working to develop innovative solutions, which are based on ethical principles, in the process of procurement and supply chain management of color gemstones. The extent and fragmentation of the supply chain, from mining areas located almost always in poor areas of the world, make difficult and complex the predefined objective. In this regard, research has shown the full awareness of the committee, in the person of its president, of developing a path of experimentation, which has no other examples. Therefore, the result of this project is not obvious, but rather it must be built in an attempt to find a satisfactory solution for all participants. The implemented process and the committee’s works are already leading to redefine conditions, procedures, and working goals. The research has showed that some changes are already been made to the structure of subcommittees: the one, represented by jewelry companies, has added new members following the line of specialization, “to ensure better operational organization,” while the scientific subcommittee, which already conferred more competences, has further enhanced the diversity of skills, “whose contribution in scientific research is considered a prerequisite for the implementation of the code of ethics.”
In addition, there is a tendency to further enrich the team of participants for a possible enlargement of the representativeness of the committee: it is stressed the need to make contact with “the institution UNICRI (United Nations Research Institute on Crime and Justice) that is currently working on a protocol to trace the paths of gems, suspected to incite crime,” and with Save the Children and the Responsible Jewellery Council.
The working groups, which are identified with the subcommittees, currently meet two specific needs for knowledge and research: the scientific committee works on the technical aspects related to the traceability of the stones, with respect to the scientific characteristics of the same; the subcommittee of jewelry companies has its objective in the identification of a traceability system that ensures the end customer in the purchase of an ethical gemstones. The attention of the latest subcommittee focuses on this stakeholder, drawing inspiration from the standard Code of Practices of the Responsible Jewellery Council.
Although the field of action of the two subcommittees takes its origin from different stakeholders—the first, firms extraction/mining, for studying the characteristics of the stones and then back to the origins of the same; the other, the customer, for satisfying the consumers’ need for purchasing an ethical product—the integration between the two groups is strongly encouraged by the bureau of the committee. The presidents of the two subcommittees should define business ad hoc meetings, they must support the exchange of ideas, materials, and results, for which it has been created a digital platform, and they must engage in the construction of a shared dialogue.
At the moment the digital platform consist of a mailbox and a structure, established in Assogemme, which deals with the collection, management, and dissemination of all documentation (memos of meetings, working in progress) among the members of the committee. In a short term, a repository will be created that will serve as a digital archive for the collection of all documentation relating to the work of the committee, or otherwise considered useful, to which all members will be able to access, with a special password; it is also planned to create a community, within the committee, in order to facilitate the communication and the sharing of works.
The investment decisions around the implementation of this digital platform contain elements of complexity. In fact, research has found that if, on the one hand, it is manifested the need to implement these instruments, in order to make communication pervasive and flexible, and to facilitate the sharing of information among all members, also considering their different origin; on the other hand, there is the presence of a “cultural barrier,” explained by the president, related to the lack of predisposition to the use of information and communication technologies (ICT) in most of the members of the Committee. Researchers, accustomed to using microscopes, entrepreneurs of handmade products and with a strong crafted content, typical of jewelry productions, but that characterizes even more jewels with colored stones, are, in the words of the president, the features that make unwilling the participants in the use of technology, hence requiring a big cultural effort.
Among the tasks of the committee have then been identified a number of new initiatives that could be implemented within the code: “actions of information given to the audience of operators, program implementation of ethical criteria for correct naming of gemological materials, dissemination of fundamentals of gemology, supervision of the sources and agencies engaged in the correct nomenclature, a brief guide to best practice in order to comply with the principles of fair disclosure, a FAQ and a phone line for answers to questions.”
Multistakeholder Committee for Developing Innovative Sustainable Solutions: Managerial Implications
The experience of the Ethics Committee of the Color Gemstones is still at an early stage and it is a start-up. This fact explains the composition of the committee, which is still firmly entrenched on the representativeness of the only jewelry business, even if it is clear tendency of presidency to give the committee a heterogeneous identity, opening to the participation of members holding of different instances.
The implementation of a participatory process to achieve a goal of sustainability requires, without any doubt, an enlarged representation of different components/activities of the production chain. This representation makes it possible to meet the demands and concerns from each stage of production and distribution, and therefore to collect the specific skills related to each phase of operation and harvest the specific contribution of the different actors to the “solution” of the problem. But, above all, it makes feasible solutions proposed and gives credibility to the project. The participation of the actors in the supply chain, on the one hand, should minimize the risk of seeing thwarted the efforts made by an operator because of the unethical behavior of other actors in the supply chain, and the on other, it should maximize the impact of a sustainable project in terms of an actual effect on the whole community.
Co-sustainability involves broad participation of stakeholders, including also the institutions and the community, where the sharing of objectives and actions can really enable to implement projects with a high environmental and/or social impact, with the ultimate aim of achieving really a common good.
If the sharing of ideas, skills, and experiences occurs within a multistakeholder committee, and if this committee is credited a decision making and guiding role, then it is even more necessary to ensure a broader representation in it.
It is also important that the governance of committee should develop a governance model in line with some of OECD principles on corporate governance. With particular reference to the multistakeholder committees that are constituted within industry associations, it is believed that at least it should be insured: “Distribution of duties and responsibilities among different supervisory; regulatory and enforcement authorities; (. . .) Ensuring equitable treatment of all shareholders (. . .); Recognition of the rights of stakeholders established by law or through mutual agreements; Encouraging active co-operation between corporations and stakeholders (. . .).”4 Many of these principles refer to a concept of social responsibility that should animate the behavior of the members of the multistakeholder committee. Literature has defined CSR as one of the pillars on which to build corporate governance (Ahmad and Yusuf 2005), or a model of extended corporate governance (Sacconi 2004), and vice versa corporate governance has been considered theory concerned with the alignment of management and shareholder interests.5 Therefore, if the governance model, like OECD shows, covers a range of issues for the protection of the interests of shareholders and stakeholders, it embraces the principles of CSR, ergo the committee must and can operate not only in the interests of the business community but also for those of the whole community.
The multistakeholder committee, even if not established within a company but as part of an institution/association, as in the case study, must absorb these principles for being guaranteed to operate not only in the interests of the business world but also of the whole community.
From a functional point of view contamination, sharing of guiding principles, coordination of activities can be ensured by different instruments, technological and nontechnological ones, i.e., under an organizational point of view, the creation of subgroups working with specific “work packages” in which the projects can be divided assures, as also seen in the case study, the participation and the exchange.
The value of this statement founds even more confirmation if the committee’s work focuses on the design of new sustainable solutions, of product or of process, without having to recall the established concepts of the richness of diversity in innovation processes, of the value of the exchange of complementary skills, and of the importance stakeholder engagement.
The outlined path for the constitution and the functioning of the multistakeholder committee does not have in itself a deterministic nature, and therefore its outcome is not obvious, but it is believed that the outlined characteristics can be considered as preconditions that can facilitate the investigation of a solution in relation to a predefined goal.
Complementary expertise in different professional fields and behaviors that are inspired by the principles of mutual respect and commitment to the project, honesty, open mindedness, and responsibility, should ensure to the multistakeholder committee to reach an objective of common interest (see Figure 12.4).
Figure 12.4 Sets of assets and principles of a multistakeholders committee
Conclusions
To have a real effect, innovative paths, which are often very complex as is the case for devising systems for traceability of precious stones and the creation of a code of ethics, must be designed within multistakeholder committees in which it is ensured a broad and representative participation of the different instances of the actors.
Innovation and sustainability appear to be two paths that are increasingly obliged to build the competitiveness of enterprises in developed countries. Strategic pathways, not only as suggested by the literature but also as evidenced by managerial practice, require collaborative models for the participation of complementary skills. The multistakeholder committee can be a container in which to realize the exchange and integration of different types of knowledge, but at the same time the representation of the different skills among the participants, it is necessary to ensure a sharing of the principles that govern individual behavior. It is believed that these principles should be guided by the concept of social responsibility and values that it supports: mutual respect, openness, honesty, trust, and commitment to society. It is therefore important that the presidency of the committee develops a model of governance that aligns the values of the various participants to share these principles, doing a periodic check of the efficiency of the model.
The experience of the Ethics Committee of the Color Gemstones is crucial because, as already mentioned, it is not only experienced in Italy, but also on an international level, which manifests the willingness of firms, even before the intervention of the legislature, to regulate the behavior of the economic actors to give rise to a sustainable supply chain for colored gemstones. Being a complex objective—as stated by its proponent, president of Assogemme—and ambitious objective—as stated by the president of the committee—it is undoubtedly to praise the interest, the willingness, and the commitment of the committee to investigate the definition of a code of ethics related to the production and marketing of colored gemstones. Finally, the author expresses a point of reflection to address the committee’s work concerning the evaluation of other experiences that are taking place in other sectors,6 such as for businesses that deal with tantalum, tin, and tungsten—mineral placed by the U.S. SEC (Securities Exchange Commission) in the list of minerals from conflict (defined conflict mineral)—for which these businesses are probably working on the definition of due diligence in order to ensure ethical principles in the production and marketing processes of these minerals.
Acknowledgments
A heartfelt thanks to Dr. Luisa La Via, chairman of the Ethics Committee of the Color Gemstones of Assogemme.
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Additional Reading
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1. Are there advantages in stakeholder engagement for sustainable innovation?
2. Which are the basic elements of the concept of collaborative sustainability?
3. Which are the characteristics of a multistakeholder committee?
4. Which are the tools for facilitating the integration and the participation in the issues of a multistakeholder committee?
5. Which are the characteristics of the jewelery business that justify a collaborative sustainability approach?
Author’s Biography
Alessandra De Chiara, is an Associate Professor of Business Management at the University of Naples “L’Orientale,” Italy. She is a Professor of Ethics and Market and of International Management. She received her PhD in Management in 1990/1991 at the University of Venezia, Italy. Her scientific activity is mainly dedicated to study the themes of corporate social responsibility, international processes and management of the international enterprises, stakeholder engagement, knowledge management, and social mechanism; small and medium-size enterprises, with focus on learning, innovation, and flexibility. She has written several articles in Italian and International journals, including Journal of Small Business Management, Journal of Global Responsibility, International Journal of Technology Management, Journal of Business Market Management, Journal of Science and Technology Policy in China. She has participated in many International Conferences.
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1 For deeper details, see: Making it Work. “Facilitating multi-stakeholder involvement,” www.makingitwork-crpd.org (January 2014); Revit. 2006. Stakeholder Engagement—A Toolkit, www.revit-nweurope.org (January 2014).
2 Columbite-tantalite, also known as coltan (from which tantalum is derived), cassiterite (tin), gold, wolframite (tungsten), or their derivatives, are conflict minerals; minerals mined in conditions of armed conflict and human rights abuses, and are regulated by U.S. Conflict Minerals Law.
3 Responsible Jewellery Council. “RJC Standards Committee”. www.responsiblejewellery.com (January 2014).
4 OECD. 2004. Principles of Corporate Governance. www.oecd.org/dataoecd/32/18/31557724 (May 5, 2007).
5 For a wide review, see: G. Aras and D. Crowther. 2009. Global Perspectives on Corporate Governance and CSR. Aldershot, UK: Gower Publisher.
6 An extensive review of business cases can be found on the website: http://supply-chain.unglobalcompact.org/.