The Greening of Global Value Chains: Insights from the Furniture Industry

With increasing fragmentation of production between independent firms that are spatially dispersed and are responsible for different steps of the production process, a Global Value Chain approach is employed to examine how ‘lead firms’ shape the green features of upstream activities. Compara- tive case studies in the Italian furniture industry (Ikea, Valcucine) are used to show that lead firms implement ‘hands-on’ governing mechanisms to improve the environmental performance of their value chain partners — moving away from the market but still avoiding vertical integration — but also ‘hands-off’ mechanisms embedded in standards and design. Two gov- erning approaches to the greening of value chains are identified: standard- driven and mentoring-driven, and these are used to provide some reflections on when we are likely to observe one or the other, and also to develop a future research agenda.