«PROACTIVE ENVIRONMENTAL STRATEGIES IN SMALL BUSINESSES: RESOURCES, INSTITUTIONS AND DYNAMIC CAPABILITIES Jan Lepoutre Promotor: Prof. Dr. Aimé Heene ...»
History of MPS in a nutshell MPS began as a regional project in the Westland region in 1993. Various pilot groups consisting of growers, information providers and researchers laid the foundations for the current MPS system. They developed a certification scheme to reduce the environmental impact of the floricultural sector and to improve the image of the sector. The founders looked at the registration method and the standards in order to give shape to the scheme. This led to the creation of a registration system based on everyday horticultural practice. At the end of 1994, around a thousand growers were already registering their environmental data. As of 1 January 1995, points were awarded regarding the use of crop protection agents, fertilizers, energy and the way in which waste is dealt with. These points were processed according to a calculation formula to convert them into a company qualification, namely MPS-A, -B or -C. In February 1995, MPS was transformed into a national foundation comprising all the Dutch flower auctions, LTO Nederland (the Dutch Organization for Agriculture and Horticulture) and LTO Glastuinbouw (the LTO branch for greenhouse horticulture). From that point, the number of participants outside the Westland region began to increase rapidly. Growers therefore played an important role right from the start of MPS, particularly due to their role in the pilot groups which served to set the standards per crop.
(MPS, 2006: 18) Two years later, in 1997, the Belgian traders association NAVEX, together with a number of proactive growers, realised that the Belgian market could not lag behind in this new initiative and founded VMS as a sister organization of MPS. VMS decided to use the administrative backing of MPS and use the same methodology as was designed by MPS.
Since then, growers from all over the world have joined MPS, mostly as a result of their trade with Dutch auctions or traders. Table 5.6 displays the distribution of certificates per country and qualification within the MPS system. As is instantly visible, the Dutch membership figures exceed those of other countries by far. Although several explanations are possible, the
most important one is a covenant between the Dutch government and the greenhouse horticultural sector in 1997, which set a number of target objectives with regards to the impact of the sector on the natural environment. All Dutch horticultural growers are required to register their use of energy, fertilizer and pesticides and report them to the government. The registration requirements were designed such that growers could use MPS as a reporting tool.
This is in contrast with the situation in Belgium and all other countries that have members in MPS, where such a registration is entirely voluntary.
Table 5.6 - MPS certificates per country and qualification in 2005.
Source: MPS, 2006
At the heart of MPS is the MPS-ABC certification. Firms that become a member of VMS/MPS are granted an A, B, or C label based on their relative performance with regards to environmental impacts (see below). Over time, MPS has created a number of additional labels that allow for more advanced criteria to be included in the registration and further develop
new market segments. These labels include:
- MPS-GAP (a worldwide scheme for compliance with demands from the retail sector)
- MPS Socially Qualified (a scheme including social aspects, such as safety, health and working conditions)
- MPS Quality and ISO9001:2000 (quality focused certificates)
- MPS-Florimark (“a top certificate for top companies with top products”) In this dissertation, my focus remains with the MPS-ABC label. Given that only three Belgian firms had an MPS-GAP certificate and none of the other, I decided to focus only on environmental performance.
188.8.131.52. The MPS system In order to assess firm specific environmental performance, each firm is required to collect information with regards to four elements: its waste treatment, energy use, fertilizer use and crop protection products use. Every four weeks, this information is to be submitted to MPS, who then apply specific calculation rules to attach a score to the products used and waste treated by the firm. The label is awarded every 4 weeks and takes the last 13 registration periods into account in its calculation. A minimum of 13 registration periods is thus needed in order to receive a label.
The calculation rules follow a scheme that compares the firm data with a firm-specific norm. This firm-specific norm is one of the most interesting characteristics of the MPS system, since it takes a number of contextual variables into account when assessing the firm’s
impact on the environment, which are the following:
- the environmental hazard of the product used (toxicity, degradation speed, …);
- the spatial characteristics of the firm (distance to open surface water, depth of groundwater, soil type, annual rainfall, geographical location in the world…);
- the structural characteristics of the firm (greenhouse or open ground);
- the type of production cluster of which it is a part (potplants, azalea, …).
The firm-specific norm serves as a benchmark of what can be expected from the best and the worst production methods (in environmental terms) within a specific production cluster and geographical location. The best production methods are indicated by a lower bound of product use, the worst production methods with an upper bound of product use.
These upper and lower bounds are determined by a careful follow-up of a pilotgroup, an expert committee and a subsequent investigation of the best available practices. The environmental hazard of pesticides is determined by acute and chronic toxicity for both human and animal life, its decomposition rate and the mobility in terms of spreading by air and water. Based on the simultaneous assessment of these factors, MPS developed a colour code for pesticides, called MPS-Mind. The most toxic pesticides are assigned a red code, the least toxic a green code. Intermediate toxicity gets an amber code. Again, these codes are also made firm specific, depending on its location and product sector. The toxicity for aquatic life, for example, is punished less for firms that operate in areas where there is no aquatic life around. Similarly, energy use will be more important for firms with greenhouses than for firms that operate in open ground.
Firms that report product uses below or equal to the firm-specific lower bound get maximum points, product uses which are above the upper bound get minimum (zero) points.
Between the upper and lower bounds, points are assigned in a linear relationship. In total, firms can earn a maximum of 100 points. Figure 5.2 and Table 5.7 show how the use of the same product can result in different scores depending on the sector in which the firm is active.
Subsequently, firms are assigned a qualification and a corresponding label, which is
based on the total amount of points collected:
- MPS-A: points total of at least 70.0 and maximum of 100
- MPS-B: points total of at least 55.0 and maximum of 69.9
- MPS-C: points total of at least 10.0 and maximum of 54.9
- MPS-Participant: points total of at least 0 and maximum of 9.9 Figure 5.3 shows each of these labels.
In order to achieve credibility of the certification, independent audits are executed in
three different situations:
- Initial audit: Similar to the desk audits, an initial audit is carried out as soon as the participant becomes eligible to receive a calculated qualification (MPS-A, -B, -C) for the first time. All new firms are subjected to this initial audit.
- Desk audit: In order to make sure that participants provide correct information, MPS randomly selects a group of participants and subjects them to a desk audit. The audit looks for extreme deviations, the use of prohibited pesticides and the (improper) use of products which are not allowed for specific environmental clusters.
- Company audit: Every year, MPS orders on-site audits on at least 30% of the participating firms. These 30% includes the companies which need to be audited as a result of the desk audit. The company audits are carried out by independent companies on the basis of a checklist. The company audits are conducted in the same way throughout the world.
- Trademark audits: Random checks are executed in order to trace fraud and improper or incorrect use of labels.
Every three months, MPS members get their results sent to them by mail. Members can subsequently ask for a “group comparison” in which they get to compare their firm’s product uses with similar firms in the same product cluster and environmental location type.
This system allows the firm to use the MPS/VMS system as management tool and to learn from its registration.
In summary, the MPS rating system serves as an independently assessed proxy for the level of environmental proactivity that a firm deploys relative to firms that have a similar sensitivity to diseases/pests, temperature needs and use of fertilisers. Firms that achieve higher VMS rates reflect higher levels of environmental performance relative to what is considered possible for the firm.
5.3.5. The Belgian ornamental horticulture sector The Belgian ornamental horticulture sector cannot be understood without taking its long tradition into account. Explaining this tradition is important for two reasons. First, the Belgian ornamental horticulture has always been associated with aristocracy and affluence. A well known botanist called Lobelius already wrote in the 16th century that the Flemish were among the best in Europe in growing both native and exotic plants (De Herdt, 1990). This prestigious reputation was the result of the special interests of a number of rich patricians and lords who employed botanists and “plant hunters” to find new and special plants in foreign countries and then grow them in their mansions. One effect of this evolution was the foundation of the Royal Agricultural and Botanic Society in Ghent in 1808, a prestigious and highly traditional organization which is still governed by an elite crowd and members of “old nobility” today. Until recently, ornamental plants were always perceived as a luxury, an expensive product for which there was always more demand than supply. As a result, markets were very predictable: growers only had to make sure that they grew their plants, because at the end of the growing season there would certainly be a customer willing to buy the firm’s plants. As a result, business was good in ornamental horticulture, its population was affluent and this showed in their housing. Around these villages surrounding Ghent, one can still see the remainders of these “florist” villas.
Second, the ornamental horticulture sector consists mainly of family firms that have often been in families for centuries. Over the years, many of the original plant hunters and servants that worked for the aristocracy or on larger farms, “spun off” to begin their own little firms and sell their plants and flowers to markets and exports. These developments took place mostly around the city of Ghent, with a couple of villages specializing in pot plants (around