Why Do Firms Improve Their Environmental Performance?
There are growing concerns that globalisation undermines the capacity of states to regulate the environmental impact of firms' activities. Conflicting claims have been made about the emergence of 'pollution havens.' Is there a 'race-to-the-bottom', as governments drop environmental standards as they compete to attract mobile investors? Conversely, does trade liberalization have beneficial effects because firms have to meet high environmental standards as a condition of access to lucrative markets? Many firms have played a prominent part in these debates, and demonstrated their commitment to social and environmental standards by negotiating various forms of civil, private and co-regulation.
This research by Kollman and Prakash represents an important advance in our understanding of how, when and why firms upgrade their environmental performance. They focus on the neglected area of implementation, examining variations between the United States, Germany and the United Kingdom in firms' responses to two widespread environmental management systems: the 14001 series of the ISO (International Organization for Standardization); and EMAS (European Union's Eco-Management Scheme). They explore the relationship between the nature of the institution setting the standard and the domestic regulatory environment in which the standards are implemented. The conclusions they draw are significant beyond the cases they study. They note that environmental management 'standards can be seen as a part of broader trends that are fundamentally changing the way business and certain policy areas are regulated'. Two key trends are: the increasing amount of regulation being developed within supranational bodies; and greater reliance on private actors for implementing these international standards, often because government institutions are either non-existent or too weak. Multinational firms also tend to prefer this approach, as they only have to deal with one supranational standard, rather than a myriad of conflicting national regulations.
Kollman and Prakash explain differences in take-up and implementation by:
Source: Kollman, K. and Prakash, A. 2001. "Green by choice? Cross-national variations in firms' responses to EMS-based regimes" World Politics Volume 53 April, pp 399-430.
World Politics is published quarterly by Johns Hopkins University Press (www.press.jhu.edu).
Keywords: environmental standards, government-business relations
Commentator: Dr Peter Newell, IDS
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