Mapping unchartered territory: Ecuador’s journey to sustainable palm oil

By Mathilde Birn, Sanne Qvarfordh, & Dr. Kristjan Jespersen

◦ 3 min read 

Sustainability certifications have become a widely used mechanism to signal to consumers that a product was ostensibly produced sustainably. Nevertheless, such certifications typically fail to scale beyond at most a fifth of global production. Within the palm oil sector, widely known as a major deforestation driver, the Roundtable for Sustainable Palm Oil (RSPO)’s Jurisdictional Approach is one of a growing number of examples of upscaling strategies. Under the Jurisdictional Approach, all value-chain actors within a province or even an entire country would be certified simultaneously. Ecuador is piloting the initiative at the national scale and is currently developing a national commitment.

The research is informed by 21 interviews with a variety of actors in the Ecuadorian palm oil sector. After qualitatively coding these interviews and looking for common patterns, we identified four main motivations behind Ecuadorian interest in jurisdictional palm oil certification. First, interviewees reported a concern that Ecuador risked losing market access due to sustainability-related import restrictions and consumer preferences in certain markets. Second, 90% of Ecuador’s palm oil producers are smallholders, whose resource limitations make it difficult to achieve RSPO certification on their own. Under the Jurisdictional Approach, smallholders would be grouped together, allowing them to pool resources and share costs. Third, the Jurisdictional Approach facilitates governmental sponsorship for smallholder capacity building. Fourth, previous experience and institution-building around sustainability in general and anti-deforestation in particular produced forward momentum on the part of the civil society and the Ecuadorian government that has led to an institutional infrastructure favourable to ideas like the Jurisdictional Approach.

In the most optimistic scenario, the Ecuadorian government’s commitment to the Jurisdictional Approach, strengthened by multi-stakeholder support, could encourage more sustainable production practices. However, we also identified certain risks associated with the implementation of the initiative. These risks especially significant given the Jurisdictional Approach’s relative novelty. As one interviewee put it: “we have been flying the plane while we’re building the plane”.

We have identified six key risks to Ecuador’s implementation of the RSPO Jurisdictional Approach and paired them with mitigation recommendations. This list is certainly not exhaustive and ought to be further assessed and developed by local stakeholders equipped with relevant expertise.

The Jurisdictional Approach affects several different stakeholder groups with diverse interests that must be actively engaged in the process to achieve success. To this end, efforts should be made to include representatives of stakeholders that are currently missing (or insufficiently represented) in the governance structure of the RSPO Jurisdictional Approach in Ecuador. These stakeholders include academia (which was involved in the beginning of the process but no longer is), domestic civil society organizations, local communities (including Afro-Ecuadorian and indigenous peoples), local governments, and representatives of the global palm oil industry.


About the Authors

Mathilde Birn graduated from CBS with a BSc and MSc degree in International Business and Politics. Academically, her main interest is within the field of sustainable development and the impact of stakeholder dynamics on such development, with a focus on emerging economies.

Sanne Qvarfordh graduated from CBS with a BSc. and a MSc. degree in International Business and Politics. Her main academic interest is sustainable development in emerging economies, with a focus on multi-stakeholder initiatives in Latin America.

Kristjan Jespersen is an Associate Professor at the Copenhagen Business School. He studies on the growing development and management of Ecosystem Services in developing countries. Within the field, Kristjan focuses his attention on the institutional legitimacy of such initiatives and the overall compensation tools used to ensure compliance.


Photo by Andrés Medina on Unsplash

Unaccounted Risk: The Case of Sulfur Hexafluoride (SF6) in Offshore Wind Energy

By Esben Holst & Dr. Kristjan Jespersen

◦ 5 min read 

Carbon accounting provides a science-based measurement of greenhouse gas (GHG) emissions, achieving greater accountability of companies’ emissions causing global warming. GHGs are reported in CO2 equivalents (CO2e), meaning GHGs with widely different chemical qualities and environmental impact can be presented in a single understandable metric. However, the underlying methodology is debatable. This article questions whether the CO2e of Sulfur Hexafluoride (SF6) is misreported.

What is SF6 and why is it a hurdle for a green energy transition?

SF6 is used as an insulator in a wide variety of electrical equipment, mainly to prevent fires in incidents of short circuits. It is found in transformers inside windmills, offshore and onshore substations, and in power cables.


(Illustration to the left shows a sideview of a windmill turbine – Source: CAT-Engines. Right: an offshore wind energy system – Source: Nordsee One GmbH)


SF6 is a synthetic man-made GHG and cannot be reabsorbed naturally like CO2, meaning once emitted, it does irreversible damage. Most GHGs remain in the atmosphere around 100 years – SF6 remains for 3,200 years. These numbers are given by the Greenhouse Gas Protocol (GGP) based on calculations by the Intergovernmental Panel on Climate Change (IPCC). 

The IPCC’s metric Global Warming Potential (GWP), reveals environmental harm of a given GHG in CO2e. What then, makes SF6 problematic when converted into CO2e? SF6 has a GWP 23,500 times higher than CO2 – a value that is difficult to comprehend. The GWP metric is calculated using a 100-year timeframe based on GHG’s environmental harm. Yet, SF6 has an atmospheric lifetime of 3,200 years, essentially leaving 3,100 years of environmental harm unaccounted for. Using a simple logarithmic function incorporating IPCC data accounting for the missing 3,100 years, the GWP almost doubles. As illustrated below, this indicates how SF6 may be misrepresented in terms of environmental harm in CO2e emissions reporting.



As found by AGAGE – MIT & NASA, other worrying trends are observed. The atmospheric concentration of SF6 has more than doubled in the past 20 years. Luckily, its current concentration in the atmosphere remains low relative to other GHGs such as Methane or Nitrous Oxide.


Source: AGAGE


Regardless, the GWP of these two GHGs pales in comparison to the mindboggling detrimental effect of SF6 on the environment. Emitting this gas should therefore be strictly regulated.

Greenhouse Gas Emissions Reporting – Diverging Approaches

It only takes a little digging into offshore wind energy players to uncover diverging conversion methods of SF6 into CO2 equivalents (CO2e). The GHG emissions reporting methodologies of industry leaders use different emissions factors to convert SF6 into CO2e. An example of underreporting is illustrated by Vattenfall in their 2019 sustainability report, reporting SF6 as 15,000 times more potent than CO2. The emissions factor given by the GGP is 23,500. Ørsted uses a GGP emissions factor for the same gas in their 2019 ESG report. Yet, while Energinet also states it uses the GGP reporting framework in their 2020 CSR report, it uses an emissions factor of 22,800. The ownership distribution between Vattenfall and Ørsted in the Danish wind farm Horns Rev 1 of 40% and 60% respectively, thus blurs accountability and severity of reported emissions. As highlighted by the BBC, atmospheric concentration of SF6 is ten times the reported amount by countries. The IPCC and GGP are also aware of this.

During the past decade…actual SF6 emissions from developed countries are at least twice the reported values. (Fifth Assessment Report of the IPPC)

Measuring Impact of SF6 Leaks by Offshore Wind Players

SF6 emissions will rise exponentially alongside expanding electrified energy infrastructure using equipment containing this gas. This, together with repeated SF6 leaks, perpetuates the worryingly steep upward trend in atmospheric content of SF6 shown above. In 2020, Energinet reported a leak of 763.84kg SF6, or 17,950,240kg CO2e. The environmental impact of this leak is about the same as the emissions of 53 SpaceX rocket launches. Energinet has since admitted to years of underreporting of SF6, leading to amended SF6 emissions related to normal operations doubling.

Leaks of SF6 are too common. In Ørsted’s 2020 ESG report, a major leak at Asnæs Power Station was mentioned without disclosing the actual amount – withholding important risk-related data from investors. However, Energinet disclosed an SF6 leak of 527kg at that same facility in their 2020 CSR report. The leak for which Ørsted is responsible, yet feels is not material to disclose, is therefore potentially around 12,384,500kg CO2e. Indicating light at the end of the tunnel, Vestas has included SF6 on their Restricted Materials list since 2017, as well as introducing a take-back scheme for infrastructure containing this gas – setting a better example for business models of our green energy transition leaders.

Strengthening the Global Response to Climate Change Risk

It is vital that we understand SF6 is so detrimental to fighting climate change beyond 2100 that it has no place in sustainable business models today. Even if CO2 emissions are reduced in alignment with 2100 Paris Agreement goals, reporting in a 100-year timeframe will not save a planet billions of years old. GHG reporting must be better regulated and scrutinised in order to deliver a truly green energy transition. Releasing a gas causing irreversible damage cannot be an acceptable trade-off for a short-term “green” transition. While most company reports claim no alternatives exist, this is not true. Therefore, SF6-free equipment must be mandatorily installed.

A green transition goes beyond 2100, yet poor regulation enables energy companies to present SF6-CO2e favourably by using lower emission factors. Offshore wind energy players have not provided comparable, accountable, and transparent reporting – indicating stricter regulations on GHG reporting are necessary.

The Way Forward: Better Regulation

In 2014, an EU regulation banned the use of SF6 in all applications except energy after lobbyists argued no alternatives exist. The EU acknowledges the environmental harm of SF6, yet EU action has been described as inadequate. Asset managers, institutional and retail investors are exposed to hidden environmental risks related to SF6 in terms of double materiality. Double materiality referring to the financial costs related to management of SF6 incurred once completely banned. Non-financial reporting of GHG emissions and CO2e needs to be regulated far more than current global regulations. Investors, society, and most of all our environment deserves better protection.


NOTE: This article is based on a Copenhagen Business School (CBS) research paper in the course ‘ESG, Sustainable & Impact Investment’ taught by Kristjan Jespersen – Associate Professor at CBS – as part of the newly introduced Minor in ESG. The paper questions the greenness of wind energy by using the case of three large offshore wind energy farms in Denmark: Horns Rev 1 & 2 and Kriegers Flak. The findings are based on ESG, sustainability & annual reports from 2015-2019 of all involved OEMs, manufacturers, operators, and energy grid providers. Implications of the findings point to a coming hurdle within the electrification of a global green energy infrastructure transition. 


About the Authors

Esben Holst, an SDG and CSR research intern at Sustainify, is a Danish-Luxembourgish masters student at Copenhagen Business School. Besides attending the newly introduced Minor in ESG at CBS, his past studies focus on international business in Asia and business development studies.

Kristjan Jespersen is an Associate Professor at the Copenhagen Business School. He studies on the growing development and management of Ecosystem Services in developing countries. Within the field, Kristjan focuses his attention on the institutional legitimacy of such initiatives and the overall compensation tools used to ensure compliance.


Photo by Karyatid on Unsplash

Portfolios at risk of Deforestation

How can financial investors better understand underlying risks and act accordingly

By Amanda Wildhaber, Dominik Wingeier, Jessica Brügger, Nico Meier, and Dr. Kristjan Jespersen

◦ 4 min read ◦

Forests play a crucial role in tackling climate change and protecting biodiversity. Around 12 million hectares of tropical forest worldwide were lost in 2018 and approximately 17% of the loss stem from the Amazon alone. The main drivers of deforestations are soy, palm oil, cattle and timber production. As deforestation may harm a company’s reputation, directly affect its supply chains and increase regulatory risks, many institutional investors are concerned about the impact deforestation can have on their portfolio companies.

How can deforestation be measured?

The definition of deforestation risk from an investor’s perspective is difficult to lock-in because different frameworks and approaches focus on different aspects of the risks. The amount of information and the lack of transparency can be overwhelming to financial investors. Therefore, a helpful framework for financial institutions to systematically evaluate the deforestation risk management of portfolio companies has been developed. The framework is divided into two parts, an internal assessment of a company’s commitments and achievements regarding deforestation and an external assessment of outside policies related to deforestation, namely binding laws and private sector initiatives. The framework may serve to complete a scorecard which gives an overview of how well prepared a specific portfolio company is and if it is able to deal with deforestation risks and future regulatory changes. The final scorecard reflects the deforestation risk of financial institution’s portfolio companies.

Is voluntary support sufficient?

Many companies voluntarily support sustainability initiatives and follow zero deforestation commitments (ZDCs) to signal their intention to reduce deforestation associated with the commodities in their supply chain. The reasons behind their commitments include demonstrating corporate social responsibility (CSR), reducing the risk of potential reputational harm and supply chain disruptions. To understand the value of these commitments in mitigating deforestation and associated risks, it is important to critically analyse them in terms of their scope, effectiveness, monitoring and achievements. This includes for example, assessing how companies define deforestation and whether they systematically measure the compliance with their commitments.

External pressure to facilitate internal commitments

It is valuable to see companies implementing robust internal policies and commitments to manage and monitor their deforestation risk. However, it is also important to have external policies in place to hold companies accountable. There are two types of external policies the proposed framework is based on.

  1. The first type are binding laws which apply for portfolio companies and thus represent a regulatory risk. The EU Timber Regulation (EUTR) of 2010, which prohibits the sale of illegally logged wood in the EU, is one example for such a binding law.
  2. The second type are initiatives by third parties, which are of a non-binding nature and complement the binding law. One such initiative is the Roundtable for Sustainable Palm Oil (RSPO), which is an initiative by private companies as well as external parties targeted to eliminate unsustainable palm oil production.
How do the companies score?

Based on the assessment of the two pillars of the framework – internal and external – a scorecard is derived which assists investors to better understand how a portfolio company or a new potential investment is managing its deforestation risk. Answering questions with scores from 1 to 3, whereby 1 is the best score and 3 the worst, the proposed scorecard allows the quantification of the deforestation risk management of a company. While the distinction between 1, 2 or 3 is not always straightforward, the final score gives a tangible assessment of how well a company is positioned to manage its deforestation risks and associated future regulatory changes. The following scorecard provides an overview of the assessment and indicates how well Nestlé is managing deforestation risks.

Having such a scorecard allows investors to manage and mitigate the deforestation risks they face in their portfolios. In addition, the final scorecard enables investment analysts to directly compare potential investments with other companies and can be used as a parameter in the investment process.

The call for action is getting louder

New regulatory requirements, growing public scrutiny and extended private sector initiatives (such as the investor-led initiative Climate Action 100+), mean that it is becoming increasingly important to properly manage deforestation risks. This is also becoming a key concern for financial investors and it is time to think about systematic approaches on how to include deforestation into the investment process. The proposed framework is intended to serve as a starting point for just that. It allows a quantification of deforestation risk and the identification of critical factors. Building the basis upon which investors can engage with companies. This is a first step to support the mitigating of not only financial but also ecological risks.


About the Authors

Amanda Wildhaber is completing her masters in Economics at the University of St. Gallen. She works as a Junior Consultant in the Strategy team of Implement Consulting. Her interest in ESG and sustainable investments developed when she wrote her bachelor thesis on social enterprises in India.

Dominik Wingeier is studying master’s in Banking and Finance at University of St. Gallen. Dominik has been working for BlackRock where he was responsible for executing and monitoring primary, secondary and direct investments in infrastructure projects.

Jessica Brügger is studying master’s in Business Innovation at the University of St. Gallen. Jessica is currently a board member of the Private Equity & Venture Capital Club of the University of St. Gallen and is particularly interested in making the financial industry more attractive to women.

Nico Meier is studying master’s in Accounting an Finance at the University of St. Gallen. Nico has been working at BLR&Partners where he is responsible for private equity investments. Additionally, he has experience providing M&A, ECM and DCM services.

Kristjan Jespersen is an Associate Professor at the Copenhagen Business School. He studies on the growing development and management of Ecosystem Services in developing countries. Within the field, Kristjan focuses his attention on the institutional legitimacy of such initiatives and the overall compensation tools used to ensure compliance.


Source: photo by Justus Menke on Unsplash

Counting Trees in the Hopes of Managing Forests – Technological solutions to palm oil deforestation?

By Isaac Caiger-Smith, Izabela Delabre and Kristjan Jespersen

In recent years, companies dealing in global commodities – such as palm oil, soy and timber – have faced increasing criticism for failing to meet zero deforestation targets in their supply chains. In response to these concerns, the use of innovative technological solutions, such as satellite monitoring systems to monitor deforestation in supply chains, are becoming increasingly commonplace.

Companies such as Global Forest Watch, Satelligence and MapHubs provide such platforms, though many large companies also choose to create their own monitoring systems in-house. It is in the palm oil sector that adoption of satellite monitoring has (so far) been most widespread. The palm oil sector is commonly characterised as being ‘hourglass’ in shape, with hundreds of thousands of growers/producers, mostly in Indonesia and Malaysia, being connected to hundreds of thousands of end users all around the world by a handful of powerful traders and refiners. Previously, single companies aiming to monitor their supply chains for deforestation risk would thus be faced with the impossible task of keeping track of (potentially) thousands of suppliers simultaneously.

In principle, satellite technology platforms signify a ground-breaking shift in possibilities for those concerned with monitoring deforestation risk.

By making it possible to map out suppliers’ concessions and monitor in ‘near real-time’ for deforestation events, consumer goods manufacturers and palm oil traders are able to cheaply and accurately ensure suppliers’ compliance with their commitments to zero deforestation, punishing non-compliant suppliers, encouraging and incentivising good environmental practice (Global Forest Watch, 2020). The clear promise such technology brings has led to their rapid uptake by the majority of the world’s largest palm oil traders and refiners, as well as many influential consumer goods manufacturers and non-governmental organisations. The hope of companies and non-governmental organisations is that such technological initiatives will play an important role in supporting zero deforestation efforts. As such, many of these actors are investing significant capital to increase their monitoring capabilities, and are highly vocal about doing so, speaking of the positive environmental impacts they claim will flow from their use. 

Through a series of in-depth interviews, it quickly became clear that despite the far-reaching functions these actors claim satellite monitoring can serve, its impact on the palm oil sector thus far has been far more limited in scope (both in terms of impact on supply chain relations and environmental outcomes) than the PR teams of the world’s palm oil giants seem to suggest.

Despite some positive developments in the realm of certified palm oil, the widespread adoption of satellite monitoring schemes across the palm oil sector has thus far failed to significantly reduce the rates of tropical deforestation associated with the industry.

Lyons-White and Knight, 2018.

Although satellites provide timely data on exactly where and when deforestation is occurring, traders and refiners have thus far been largely unable to use the data to influence the behaviour of offending firms. There are numerous reasons why this is the case. 

Decontextualised data

Knowing where deforestation is occurring does not necessarily tell you who is responsible. In many instances, palm oil traders simply do not know who their third-tier suppliers are – if the alerts provided by remote sensing data cannot be combined with full knowledge of a firm’s supply chain (‘traceability to plantation’), they will often be unable to act on them. Achieving 100% traceability to plantation is a task all of the major traders are currently engaged in, yet it is a long and difficult process – as previously mentioned, the structure of the palm oil sector is complex, with numerous tiers of suppliers separating those engaging in monitoring from those being monitored.

In addition, the difficulty of the task is further exacerbated by inaccurate data on land ownership, competing claims, and unofficial occupation. Until these systemic issues are addressed, the situation regarding monitoring will remain much as it is today – satellite monitoring systems will continue to provide accurate alerts, but in the vast majority of cases (approximately 90%, according to interviewee from palm oil trader) traders will be unable to attribute it with certainty to actors from their supply chain, and thus will not be able to meaningfully respond. 

Leverage issues

In instances where technology users are able attribute a deforestation alert to an actor from within their supply chain, firms often lack the leverage to change suppliers’ behaviour and ensure compliance with their sustainability standards. Buyers have two options: negotiate with producers or blacklist them.

Given that buyers are unwilling to pay a premium for deforestation-free products (Delabre et al, 2020), providing incentives for non-compliant suppliers to stop harmful behaviours is challenging – expecting growers to bear all the costs associated with non-expansion without any reward is not a sustainable system. Furthermore, the threat of being blacklisted from a company’s supply base is also unlikely to have the desired impact; suppliers will likely have no trouble finding other buyers, in markets where sustainability credentials are generally seen as less of a priority (Schleifer & Sun, 2018).

In this context, it is clear that thus far, satellite monitoring has not been capable of producing the far-reaching effects, which may have been desired.

Despite this, satellite monitoring has certainly contributed to several interesting developments in the palm oil sector. For example, interviewees emphasised the positive impacts of environmental non-governmental organisations armed with satellite monitoring technologies, acting as unofficial but powerful ‘watchdogs’, ‘naming and shaming’ consumer brands and traders associated with deforestation events.

It seems the ever-present risk of exposure (and subsequent brand damage) posed by non-governmental organisations’ use of satellite monitoring is a significant driver of new norms and practices within the industry.

These norms emphasise that it is necessary for powerful actors, such as traders and consumer goods manufacturers to be proactive in effectively addressing deforestation, both within and outside their supply chains. Interviewees also emphasised increasing levels of dialogue/cooperation across actor types, through for example, the creation of focus groups made up of producers, traders, local governments and community leaders, for the purpose of discussing the data provided by satellite monitoring, and working together to create solutions. In light of the ever-increasing levels of transparency that satellite monitoring brings, such institutions seem an inevitable and positive consequence of implementation.

However, given the severity of the contextual constraints hindering the industry’s sustainability, it is unlikely that such noble intentions (or even significant capital investments) will be capable of truly addressing the problem. 

Satellite monitoring technology has dramatically expanded the realms of possibility for forest governance, yet its implementation in the palm oil sector remains hindered by the structures, institutions and political and legal realities of palm oil production, and producing countries more broadly, dramatically reducing its ability to create positive change. Whilst they are clearly useful tools for environmentally conscious actors aiming to reduce their deforestation risks, they are only one small piece in a very complex puzzle. The problem of tropical deforestation caused by palm oil expansion is at once an economic, political, social and historical problem. As such, ‘technological fixes’ or the actions of individual firms (or even groups of firms) are themselves unlikely to lead to significant environmental improvements. In order to address such a vast problem, the underlying context must shift. Nothing less than large-scale international public and private sector cooperation is required. 


Bibliography

Delabre, I., Alexander, A. & Rodrigues, C. (2020) Strategies for tropical forest protection and sustainable supply chains: challenges and opportunities for alignment with the UN sustainable development goalsSustain Sci 15, pages 1637–1651

Global Forest Watch (2020) Global Forest Watch Pro: Securely Manage Deforestation Risk in Commodity Supply Chains.

Lyons-White, J., Knight, A. (2018) Palm oil supply chain complexity impedes implementation of corporate no-deforestation commitments, Global Environmental Change 50, pages 303–313 

Schleifer, P., Sun, Y. (2018) Emerging markets and private governance: the political economy of sustainable palm oil in China and India, Review of International Political Economy Volume 25 Issue 2, pages 190-214


About the Authors

Isaac Caiger-Smith is a Junior Research Associate and undergraduate at the University of Sussex, studying philosophy politics and economics. His current research project focuses on the use of satellite monitoring technologies for addressing deforestation risks. 

Izabela Delabre is a Research Fellow at the University of Sussex, examining sustainable forest governance, sustainable production and consumption of food, and sustainability transformations. Izabela worked for the Business and Biodiversity Conservation Programme at the Zoological Society of London (ZSL) managing ZSL’s global oil palm work. Her PhD (Human Geography) examined the political ecology of participatory impact assessment practices in the context of the Roundtable on Sustainable Palm Oil (RSPO) in Indonesia and Malaysia.

Kristjan Jespersen is an Associate Professor at the Copenhagen Business School. He studies the growing development and management of Ecosystem Services in developing countries. Within the field, Kristjan focuses his attention on the institutional legitimacy of such initiatives and the overall compensation tools used to ensure compliance.


Photo by Carles Rabada on Unsplash

Where is the Space for Ethics in Rule Governed Organizations?

By Anna Kirkebæk Gosovic.

Imagine that you work in an organization where your choices, your knowledge and your thoroughness in your work could potentially impact the lives and health of people; for the better, yes, but also for the worse, if you make a mistake. Imagine then, that at any moment, someone could come and go through all your work, ask for all the details of your choices and demand proof that you made the right decision according to all the rules that you need to know. And then imagine that large investments are at stake and that the failure or success of these investments depend, partly, on the thoroughness of your work.

Strict rules and procedures
This is the reality that many employees in pharmaceutical companies operate in. Many organizations today are governed by policies and procedures to make things run smoothly but some organizations are – to a larger extent – characterized by strict monitoring and reporting procedures, high preoccupation with failure and commitment to organizational resilience. Weick and Sutcliffe name such organizations “High Reliability Organizations” (HRO) (Weick & Sutcliffe, 2007). HROs are organizations working in fields where mistakes can have severe consequences and which, as a result of this, have strict procedures for ensuring compliance with processes and policies.

Studying HROs, scholars have focused on organizations such as air craft carriers (Weick & Roberts, 1993), nuclear power plants (Schulman, 1993), hospitals (Chassin & Loeb, 2013) and military units (Bierly & Spender, 1995; Demchak, 1996); all of which operate in environments rich with potential for error but where the consequences of such are too severe to allow them to happen (Cf. Weick, Sutcliffe, & Obstfeld, 1999, p. 32).

With their close attention to monitoring, following procedures and regimes for registering data, actions and decisions, pharmaceutical companies can be defined as HROs.

Is following the rules enough?
Organizations preoccupied with reliability may spend more time and effort organizing for controlled information processing, mindful attention and action than other organizations. Weick and Roberts call this “mindful organizing” (Weick & Roberts, 1993, p. 357). But with such elaborate legislative frameworks in place as in the pharmaceutical industry, how do employees experience their room for maneuvering and for acting ethically? And how do staff and managers perceive the ethical dilemmas they meet? Is it enough to have followed the rules? And what happens in situations when there is a wider space for interpretation of such rules? How does moral reasoning take place at the intersection between legislative frameworks, financial considerations, scientific possibilities and human lives? And what domain outweighs the others at which points in time?

These are the questions that I hope to answer by studying within – and in partnership with – a pharmaceutical company. The project only started in January, so if you are interested in the answers to this, be patient, and stay tuned!


Anna Kirkebæk Gosovic is a PhD student at the Department for Management, Society and Communication at Copenhagen Business School. She is working on business ethics within a multinational pharmaceutical corporation.

Pic by G. Crescoli, Unsplash.