The Voluntary Environmentalists
Abstract
Can businesses voluntarily adopt progressive environmental policies? Most environmental regulations are based on the assumption that the pursuit of profit leads firms to pollute the environment, and therefore governments must impose mandatory regulations. However, new instruments such as voluntary programs are increasingly important. Drawing on the economic theory of club goods, this book offers a theoretical account of voluntary environmental programs by identifying the institutional features that influence conditions under which programs can be effective. By linking program efficacy to club design, it focuses attention on collective action challenges faced by green clubs. Several analytic techniques are used to investigate the adoption and efficacy of ISO 14001, the most widely recognized voluntary environmental program in the world. These analyses show that, while the value of ISO 14001's brand reputation varies across policy and economic contexts, on average ISO 14001 members pollute less and comply better with governmental regulations.
... The concept was then applied to trade, environment, and climate-related issue areas (see e.g. Abbott, 2012;Prakash and Potoski, 2006). ...
... Alternatively, Hovi et al. (2017, p. 2) outline "a climate club as any international actor (country) group that (1) starts with fewer members than the UNFCCC has and (2) aims to cooperate on climate change mitigation." Prakash and Potoski (2007) suggest distinguishing between Buchanan (economic) clubs that have the purpose of club good production, and voluntary clubs that aim to produce beneficial social externalities. As climate action is first and foremost dedicated to public rather than private good creation (Falkner, 2016), climate policy initiatives hardly exist in the sense of economic clubs. ...
... Public goods. A climate club must generate public goods and perform governance in order to contribute to international climate governance (Green, 2015;Prakash and Potoski, 2007). We understand successful governance activities contributing to climate change mitigation as the central public good that climate clubs can produce. ...
Not only is the climate changing, but so is global climate governance. Climate policy initiatives have proliferated within and beyond the United Nations Framework Convention on Climate Change (UNFCCC) regime in a polycentric pattern. Nevertheless, promised action under the Paris Agreement (PA) is far from being sufficient to achieve its targets of keeping global warming below 2 °C. A special research focus has emerged on international ‘climate clubs’, referring to a smaller group’s greater ability to make progress in international climate policy compared to large global forums. Against this background, our paper reflects on the club functions of the Climate and Clean Air Coalition (CCAC), a transnational partnership that aims at slowing the rate of near-term global warming through the reduction of short-lived climate pollutants (SLCPs). How does the CCAC contribute to global climate governance and how does this relate to existing structures, such as the UNFCCC process and the PA? Researchers have generally found that climate clubs can raise ambition, produce emissions reductions, and/or enhance cooperation, while generating additional benefits for its members. However, their specific governance contribution remains rather opaque, for example, how emissions reductions are achieved. There is a lack of analytical application, knowledge of the political practice and of in-depth case studies of the clubs concept. This paper contributes to filling this gap by applying central aspects of clubs research, namely membership and size, public goods, and the provision of additional benefits as an analytical framework in one in-depth case study of a governance initiative that has not yet been the subject of academic scrutiny: the CCAC. The results are based on expert interviews and the analysis of strategic and academic documents. Overall, this research finds that the CCAC’s largest contribution to global climate governance lies in preparing SLCP emissions reductions through raising awareness, orchestrating different actors and actions related to SLCPs, and establishing a large technical cooperation network. To some degree it also directly implements SLCP reduction projects. Ultimately, it complements the UNFCCC and especially the Paris Agreement. Members are part of the CCAC because its benefits go beyond climate change mitigation. Its large transnational membership constellation both supports and challenges its governance contribution.
... We would like to underline that institutional pressure exists from regulatory and normative forces in inducing their adoption by companies [44,51] and it can be argued that ISO14001 and EMAS-certified companies gain intangible benefits from the credibility gained through their environmental governance [52]. This is further evidenced by the ease of access to bank guarantees by companies certified with EMSs. ...
... This is further evidenced by the ease of access to bank guarantees by companies certified with EMSs. Indeed, this goes a long way in explaining the adherence by substantial numbers of private companies [53], even though these EMSs refer to government regulations that go beyond the environmental commitment commonly required of companies [52]. Therefore, the projects themselves also gain recognition for their social and environmental legitimacy. ...
Infrastructure plays the largest role in the amount of annual emissions, so much so that investments promoted in the European Union must be subjected to a careful assessment of the sustainability of projects. The current landscape for assessing the sustainability of infrastructure is varied and complex. Considering the object of the assessment methodologies (such as the Environmental Impact Assessment or the Ecological Management System) and specific tools such as Envision, there is a shift from the infrastructure in itself and the company’s actions to promoting sustainable development. This article introduces a methodology to examine how tools used in environmental impact assessments of transport infrastructure projects, regardless of the actor implementing them, align with different sustainable development objectives. Moreover, it identifies the Sustainable Development Goals (SDGs) as a reference point that can be used in estimating the validity of these instruments. This paper also validates the methodology proposed in our study, by comparing the results obtained on the Envision model with those obtained from its application in a case study regarding the Terzo Valico dei Giovi, a railway infrastructure in Italy. The article shows that although the final target is in many respects the same, the nuances with which actors pursue sustainability through the different instruments vary.
... Thus, there could be a tradeoff between the adoption of the norm, and its effectiveness in shaping the actions and behaviors of the actors that have adopted it. This echoes the lesson from the voluntary regulation literature which suggests that low-cost programs requiring small changes in corporate policies tend to attract a larger roster of firms, but such programs also are less effective in shaping corporate performance [58]. The conceptual flexibility lowers the costs of ESG adoption, but it might also make it less effective in shaping actor policies or behaviors in E, S, or G dimensions. ...
Milton Friedman famously argued that the social responsibility of business is to maximize shareholder wealth. Friedman’s view is challenged by the proponents of corporate social responsibility who suggest that firms should consider the interests of all stakeholders, and not just shareholders. Following the stakeholder approach, BlackRock’s CEO Larry Fink has made the case that firms should use the ESG (environmental, social, and governance) metric to evaluate their performance as opposed to short-term profit maximization. Fink employs his annual “Dear CEO” letters as a platform to outline his views on ESG. While these letters focus on all three ESG dimensions, the media tends to portray Fink as a climate advocate. We examined the texts of the ten letters Fink has published since 2012 to assess the extent to which Fink focused on climate issues. We found that Fink emphasized the climate dimension over social and governance dimensions only in two letters (2020 and 2022), which suggests that the thrust of Fink’s letters differs from how the media frames them. Broadly, our paper suggests that norm advocates sometimes cannot fully control how their advocated norm is interpreted and framed. Limiting ESG to climate issues has implications for its business acceptability. Specifically, this framing links business incentives to adopt ESG to the policy salience of climate issues as well as the fortunes of both the fossil fuel industry and the renewable energy sector. Second, if businesses face a legitimacy crisis from governance shortfalls or inadequate social performance, ESG will serve as a less effective tool in alleviating stakeholder concerns.
... This raises the issue of the confidence various stakeholders have in any country's ability and willingness to deliver on its pledge. Arguably, as the institutional design literature suggests, monitoring and verification of the progress in meeting pledge [10] could curb shirking and create incentives for countries to deliver on it [11,12]. Hence, the second dimension pertains to the presence of accountability mechanisms ("accountability"). ...
The 2015 Paris Agreement outlined the goal to limit temperature increases below 2°C, preferably to 1.5°C. In response, several countries have announced net-zero emission pledges (NZEP). The credibility of these pledges varies because countries have committed to different target years. Moreover, some pledges outline sectoral as opposed to economy-wide targets and vary in how they monitor progress. To assess the pledge’s credibility, we create a novel NZEP stringency score. We find that climate leaders with a higher share of renewable energy in final energy consumption are more likely to have announced more stringent NZEPs. However, economic development, the size of the economy, countries’ embeddedness in international environmental treaties, and the robustness of domestic civil society are not associated with NZEP stringency.
... Moreover, it was a public and costly signal given the intense criticism from Republicans and even Democrat party leaders such as Nancy Pelosi. Thus, voters probably took the GND endorsement as a credible signal of House candidates' climate policy positions instead of dismissing it as cheap talk [20][21][22][23][24]. ...
Climate issues widely feature in policy discussions, but it is not clear if voters reward politicians who champion climate policies. In some countries, candidates and parties with an explicit climate agenda have done well in elections (Switzerland and Germany being recent examples) while in other cases, voters have either ignored climate issues or punished candidates/parties for their climate positions (Australia, the U.K., and Canada). Focusing on the U.S. as a case study, we examine the electoral appeal of the Green New Deal (GND) legislative proposal which outlined a vision for a sustainable and equitable economy. Different versions of the GND policy idea have been adopted across the world. The GND was introduced in the US Congress in 2019 and was endorsed by 102 of the 232 House Democrats, but not by a single Republican. Our analysis finds an association between Democrats’ endorsement of the GND and a 2.01 percentage point increase in their vote share, even after controlling for the 2018 vote share. Unlike most western democracies, the U.S. is a laggard on climate issues. Yet, we find that U.S. voters reward legislators who advocate an ambitious climate policy agenda.
... Lobbying is aimed at securing private benefits for a corporation, such as public procurement or subsidies (Hillman and Riley 1989;Tullock 1967) or collective benefits for an industry, such as favorable regulation, price guarantees or tax reductions (Grier et al. 1994;Olson 1965). By contrast, CSR involves the provision of public goods by private actors (see, e.g., Baron 2001;Prakash and Potoski 2006). While lobbying frequently takes place outside the view of the public, CSR is usually intended to be publicly visible (Mutch and Aitken 2009)-to the extent that corporations have to be careful to avoid accusations of "CSR-washing" (Pope and Waeraas 2016). ...
This paper explores the role of corporate social responsibility (CSR) as an element in a corporation’s political action repertoire. Previous research has studied lobbying and CSR as a distinct means by which corporations seek to manage their non-market environment. Analyzing CSR as a political activity, we argue that corporations engage in CSR for the same reasons that prompt them to engage in lobbying. More specifically, we expect corporations to adopt CSR frameworks that are suitable to enhance their reputation in a given political arena. To evaluate this argument, we analyze the lobbying and CSR behavior in the EU and USA of over 2000 corporations from around the world. Our results show that lobbying and adopting CSR frameworks can be predicted by similar empirical models. Moreover, controlling for common predictors and endogeneity, lobbying in the EU is associated with an increased likelihood of a corporation adopting an appropriate CSR framework. However, corporations that lobby in Washington DC become less likely to engage in CSR the more they spend on lobbying. These findings shed new light on the relationship between lobbying and CSR while highlighting important differences in corporate non-market behavior across political arenas.
... Certification/Eco-Labelling Similar drift has occurred in social science research on the emergence a quarter-century ago of supply chain efforts to certify consumer goods produced through environmentally friendly practices. Some of this occurred when Ostrom's students and followers (Prakash and Potoski 2006;Kolln and Prakash 2002) applied GTC's rationalist taxonomy to conceive of eco-labeling and voluntary programs not as institutions for solving environmental problems per se, but-through its treatment of them as "club goods" (table 2)-as the resource problem itself. This led to a research program that focused attention on why utility-enhancing firms might join, and implications for the ancillary environmental impacts that might result. ...
Contrary to calls for increased relevance, the discipline of political science has had lasting impacts in shaping environmental policy analysis. The ideas and approach advocated by former APSA president Elinor Ostrom, most comprehensively articulated in Governing the Commons , have diffused to shape or reinforce generations of sustainability scholarship. We identify four “ideal type” problem conceptions that are distinguished based on their consistency or inconsistency with Ostrom’s inductive approach to problem structure and economic welfare emphasis, and four corresponding schools that reinforce each: commons (Type 1), economic optimization (Type 2), compromise (Type 3), and prioritization (Type 4). Whereas the prioritization school seeks to understand and identify lessons for minimizing the impact of human activity on the natural environment, the diffusion of the commons’ metaphor has led political scientists to champion frameworks that bias Type 3, 2, and 1 orientations. The latter all rest on moral underpinnings that promote human material interests as their goal, rather than recognizing them as also a primary cause of environmental degradation. A fundamental conceptual reorientation is required if social scientists in general, and political scientists in particular, are to generate an understanding of and identify tools for ameliorating rather than exacerbating today’s Type 4 climate change and species extinction crises.
... However, if the passenger is also told that this is greater than the annual per capita emissions in 56 countries, this information might motivate pro-climate action, such as not flying at all or at least purchasing carbon offsets. Alongside carbon calculators, climate labels, such as Amazon's Climate Pledge label, can provide climate information about specific products (Prakash and Potoski, 2006). Yet, consumers might be skeptical of climate labels due to greenwashing concerns (Wright and Nyberg, 2017). ...
Aviation emissions account for about 2.5% of global carbon emissions, and by 2050 their share could rise to 22%. This review article explores how climate scholars view the role of structural (policy-or business-focused) or agentic (individual-focused) approaches in reducing these emissions. From a structuralist perspective, aviation emissions require policy changes because they reflect regulatory and business failures to address the climate crisis. By itself, individual actions will not significantly reduce emissions. Moreover, focussing on personal (agentic) action might allow governments and firms to disavow their role in the climate crisis. From an agentic perspective, aviation emissions reflect carbon-intensive lifestyles. Even within the existing policy structures, individuals can reduce the carbon footprint of their travel. At the same time, individuals can serve as influencers, voters, and social movement participants to pressure governments and businesses to develop low emission air travel policies. Rather than viewing agency and structures as distinctly separate approaches, we suggest that they could co-evolve to create pathways to reduce aviation emissions. Policy initiatives can facilitate individual efforts to reduce air travel emissions, and individual action could shape policies structuring their choices. 3
... In the absence of compensation for the sectors bearing mitigation costs (on the subject of "just transition," see Newell and Mulvaney (2013)), these sectors and their allies have mobilized against mitigation policies. Moreover, governments have subsidized it instead of taxing the fossil fuel industry for the externalities it imposes on societies (Pigou, 1924). Thus, government failure is rooted in acts of omission (inadequate regulations) and commission (granting fossil fuel subsidies). ...
Aviation emissions account for about 2.5% of global carbon emissions, and by 2050 their share could rise to 22%. This review article explores how climate scholars view the role of structural (policy-or business-focused) or agentic (individual-focused) approaches in reducing these emissions. From a structuralist perspective, aviation emissions require policy changes because they reflect regulatory and business failures to address the climate crisis. By itself, individual actions will not significantly reduce emissions. Moreover, focussing on personal (agentic) action might allow governments and firms to disavow their role in the climate crisis. From an agentic perspective, aviation emissions reflect carbon-intensive lifestyles. Even within the existing policy structures, individuals can reduce the carbon footprint of their travel. At the same time, individuals can serve as influencers, voters, and social movement participants to pressure governments and businesses to develop low emission air travel policies. Rather than viewing agency and structures as distinctly separate approaches, we suggest that they could co-evolve to create pathways to reduce aviation emissions. Policy initiatives can facilitate individual efforts to reduce air travel emissions, and individual action could shape policies structuring their choices. 3
... By some accounts, subnational governments have taken a more assertive regulatory role on climate issues. Alongside, nonprofitsenvironmental nonprofits and trade associationshave established private or self-regulatory regimes (Prakash and Potoski 2006b But what about non-regulatory products? Here subfield analysis can be helpful. ...
... Scholars have identified a stringent verification process as a crucial feature of credible and effective private rulemaking programs, since it creates a barrier to entry for rule-targets in addition to the stringency of the private rules (Potoski & Prakash 2009;Fransen & Burgoon 2012;Kalfagianni & Pattberg 2013). Shirking is a central challenge for private regulation, since meeting the rule requirements will be costly for applicants, and hence applicants will have reasons for opportunistic behavior (Williamson 1989;Prakash & Potoski 2006). If applicants can keep private the low quality of their product or service, they may be able to access the regulated credence market without paying the costs of raising the quality of their good or service. ...
Private regulatory programs, such as certification schemes, seek to control market access by providing greater certainty about products' credence attributes, including sustainability features of production processes. This article contributes to the literature that assesses the verification processes that determine whether private rules are being followed sufficiently by applicant rule‐targets (usually companies), and the regulatory intermediaries (auditors, assessors) that perform verification functions. By examining variation in the duration of verification processes of applicant rule‐targets, we question the assumption that within the context of a given program's design the efficiency of the verification process is invariant across time and space. We argue that the verification process can impose hurdles that are independent of rule‐targets' sustainability and their adherence to a private program's rules. Our analysis of 312 fisheries seeking Marine Stewardship Council certification shows that variation among intermediaries and objections to their certification decisions explain differences in the time it takes fisheries to receive market access.
This book chapter discusses greenwashing within the domain of Environmental, Social, and Governance (ESG), reflecting upon the emergent dichotomy between espoused corporate sustainability and actual environmental stewardship. By systematically reviewing the pertinent literature, the chapter highlights the pivotal role of greenwashing as a deceptive tactic within ESG framework. It discusses the Volkswagen's and Coca-Cola's greenwashing practices and offer empirical insights into the inconsistencies in their marketing claims of producing sustainable and eco-friendly products. This chapter explores the variances in ESG reporting due to differing regulatory frameworks and emphasize on the importance of regulatory frameworks in enhancing or impeding transparency in corporate disclosures. The chapter outlines the pressing research questions and practical challenges in containing greenwashing strategies and advocate for future scholarly exploration into the uncharted areas of ESG and corporate sustainability.
Public management scholars argue that collective action problems (e.g., incentives to free‐ride on the efforts of others or shirk agreements) threaten the feasibility of intergovernmental cooperation. Drawing on collective action theory, this article examines factors associated with overcoming free‐riding incentives and provides evidence challenging the idea that governments are prone to such strategic behavior. The empirical analysis of a national Danish purchasing group demonstrates how coercion is not necessary to induce subnational governments to incur private costs to join the group and, despite opportunity and incentive to free‐ride, contribute to its production of joint purchasing agreements—collective goods whose quality depends on the staff resources and expertise the participating governments contribute to their production. Further, multivariate analyses find that governments are more likely to help produce these collective goods when they receive more of their benefits, face lower contribution costs, and receive stronger social norm pressures from peers.
This article is protected by copyright. All rights reserved.
This Element contends that regulators can and should shame companies into climate-responsible behavior by publicizing information on corporate contribution to climate change. Drawing on theories of regulatory shaming and environmental disclosure, the Element introduces a "regulatory climate shaming" framework, which utilizes corporate reputational sensitivities and the willingness of stakeholders to hold firms accountable for their actions in the climate crisis context. The Element explores the developing landscape of climate shaming practices employed by governmental regulators in various jurisdictions via rankings, ratings, labeling, company reporting, lists, online databases, and other forms of information-sharing regarding corporate climate performance and compliance. Against the backdrop of insufficient climate law and regulation worldwide, the Element offers a rich normative and descriptive theory and viable policy directions for regulatory climate shaming, taking into account the promises and pitfalls of this nascent approach as well as insights gained from implementing regulatory shaming in other fields. https://www.cambridge.org/ph/universitypress/subjects/earth-and-environmental-science/climatology-and-climate-change/fighting-climate-change-through-shaming#resources
Prior to the Nixon administration, environmental policy in the United States was rudimentary at best. Since then, it has evolved into one of the primary concerns of governmental policy from the federal to the local level. As scientific expertise on the environment rapidly developed, Americans became more aware of the growing environmental crisis that surrounded them. Practical solutions for mitigating various aspects of the crisis—air pollution, water pollution, chemical waste dumping, strip mining, and later global warming—became politically popular, and the government responded by gradually erecting a vast regulatory apparatus to address the issue. Today, politicians regard environmental policy as one of the most pressing issues they face. The Obama administration has identified the renewable energy sector as a key driver of economic growth, and Congress is in the process of passing a bill to reduce global warming that will be one of the most important environmental policy acts in decades. The Oxford Handbook of U.S. Environmental Policy is a work that covers all aspects of environmental policy in America. Over the past half century, America has been the world's leading emitter of global warming gases. However, environmental policy is not simply a national issue. It is a global issue, and the explosive growth of Asian countries like China and India mean that policy will have to be coordinated at the international level. The book therefore focuses not only on the U.S., but on the increasing importance of global policies and issues on American regulatory efforts. This is a topic that only grows in importance in the coming years.
In response to stakeholder pressure, companies increasingly make ambitious forward-looking sustainability commitments. They then draw on corporate policies with varying degrees of alignment to disseminate and enforce corresponding behavioral rules among their suppliers and business partners. This goal-based turn in private sustainability governance has important implications for its likely environmental and social outcomes. Drawing on paradox theory, this article uses a case study of zero-deforestation commitments in the Indonesian palm oil sector to argue that goal-based private sustainability governance’s characteristics set the stage for two types of paradoxes to emerge: performing paradoxes between environmental, social, and economic sustainability goals, and organizing paradoxes between cooperation and competition approaches. Companies’ responses to these paradoxes, in turn, can explain the lack of full goal attainment and differential rates of progress between actors. These results draw our attention to the complexities hidden behind governance through goal setting in the corporate space, and raise important questions about the viability of similar strategies such as science-based targets and net-zero goals.
The governance challenges embedded in climate change are daunting. Conventional logic holds that national and international action is necessary. While the United States is a major source of Greenhouse Gas (GHG) emissions – second only to China – national action on climate change has been lacking. However, hundreds of subnational US governments and thousands of industrial facilities are actively engaged in addressing climate change. Given the potential mismatch between the global nature of the problem and the policy reach of subnational governments, we evaluate the extent to which polycentric variation in subnational climate action is associated with changes in GHG emissions. We develop a unique data set that incudes facility‐level GHG emissions from major industrial sectors in the United States over 8 years and subnational climate governance action across all 50 states. This large‐N data set allows us to systematically test hypothesis from polycentric governance. This type of comparative analysis can help to better understand the conditions under which polycentric governance is associated with improved climate change outcomes, that is, declining GHG emissions. Our results suggest that even when controlling for past emissions, some elements of polycentric governance are associated with decreases in GHG emissions. Future research would benefit from augmenting the large N comparative analysis presented here with mixed methods research to more fully understand the dynamic processes shaping both climate policy and GHG emissions.
In the past few decades voluntary environmental programs (VEPs) have gained traction as a tool to promote environmental performance beyond regulatory requirements. However, such programs have been largely studied in the context of the private sector with comparatively less consideration given to the possibility that local governments can also join such programs to improve their both their reputation and environmental performance. We consider Sweden’s Eco-municipality association as an instance of a public sector VEP and find that even after accounting for spatial dependence; environmental consciousness, municipality type, the level of education, industry structure, and environmental vulnerability (as proxied by proximity to the coast) are significant determinants of the municipality’s decision to participate in the program.
This chapter defines green buildings as a holistic concept and as promoted by the Green Building Movement. It reviewa the theory and empirical evidence of market failures and various barriers that have shaped the Green Building Movement, which aims to improve environmental footprints in a way that is profitable to participants. It draws upon the market for lemons and signaling theory to explain the role of ecolabeled buildings in overcoming information barriers. To the scholar, this mission seeks to align public and private benefits through reduction of information asymmetries and externalities of building practices. It then characterizes the scope of green building policy initiatives across the United States and across the globe. It also shows the prevalence of the Green Building Movement around the globe.
Academics and policymakers frequently discuss global governance but they treat governance as a structure or process, rarely considering who actually does the governing. This volume focuses on the agents of global governance: 'global governors'. The global policy arena is filled with a wide variety of actors such as international organizations, corporations, professional associations, and advocacy groups, all seeking to 'govern' activity surrounding their issues of concern. Who Governs the Globe? lays out a theoretical framework for understanding and investigating governors in world politics. It then applies this framework to various governors and policy arenas, including arms control, human rights, economic development, and global education. Edited by three of the world's leading international relations scholars, this is an important contribution that will be useful for courses, as well as for researchers in international studies and international organizations.
Political Consumerism captures the creative ways in which citizens, consumers and political activists use the market as their arena for politics. This book theorizes, describes, analyzes, compares and evaluates the phenomenon of political consumerism and how it attempts to use market choice to solve complex globalized problems. It investigates theoretically and empirically how and why consumers practice citizenship and have become important political actors. Dietlind Stolle and Michele Micheletti describe consumers' engagement as an example of individualized responsibility taking, examining how political consumerism nudges and pressures corporations to change their production practices, and how consumers emerge as a force in global affairs. Unlike other studies, it also evaluates if and how consumer actions become effective mechanisms of global change. Stolle and Micheletti offer a candid discussion of the limitations of political consumerism as a form of participation and as a problem-solving mechanism.
Academics and policymakers frequently discuss global governance but they treat governance as a structure or process, rarely considering who actually does the governing. This volume focuses on the agents of global governance: 'global governors'. The global policy arena is filled with a wide variety of actors such as international organizations, corporations, professional associations, and advocacy groups, all seeking to 'govern' activity surrounding their issues of concern. Who Governs the Globe? lays out a theoretical framework for understanding and investigating governors in world politics. It then applies this framework to various governors and policy arenas, including arms control, human rights, economic development, and global education. Edited by three of the world's leading international relations scholars, this is an important contribution that will be useful for courses, as well as for researchers in international studies and international organizations.
Academics and policymakers frequently discuss global governance but they treat governance as a structure or process, rarely considering who actually does the governing. This volume focuses on the agents of global governance: 'global governors'. The global policy arena is filled with a wide variety of actors such as international organizations, corporations, professional associations, and advocacy groups, all seeking to 'govern' activity surrounding their issues of concern. Who Governs the Globe? lays out a theoretical framework for understanding and investigating governors in world politics. It then applies this framework to various governors and policy arenas, including arms control, human rights, economic development, and global education. Edited by three of the world's leading international relations scholars, this is an important contribution that will be useful for courses, as well as for researchers in international studies and international organizations.
Academics and policymakers frequently discuss global governance but they treat governance as a structure or process, rarely considering who actually does the governing. This volume focuses on the agents of global governance: 'global governors'. The global policy arena is filled with a wide variety of actors such as international organizations, corporations, professional associations, and advocacy groups, all seeking to 'govern' activity surrounding their issues of concern. Who Governs the Globe? lays out a theoretical framework for understanding and investigating governors in world politics. It then applies this framework to various governors and policy arenas, including arms control, human rights, economic development, and global education. Edited by three of the world's leading international relations scholars, this is an important contribution that will be useful for courses, as well as for researchers in international studies and international organizations.
Political Consumerism captures the creative ways in which citizens, consumers and political activists use the market as their arena for politics. This book theorizes, describes, analyzes, compares and evaluates the phenomenon of political consumerism and how it attempts to use market choice to solve complex globalized problems. It investigates theoretically and empirically how and why consumers practice citizenship and have become important political actors. Dietlind Stolle and Michele Micheletti describe consumers' engagement as an example of individualized responsibility taking, examining how political consumerism nudges and pressures corporations to change their production practices, and how consumers emerge as a force in global affairs. Unlike other studies, it also evaluates if and how consumer actions become effective mechanisms of global change. Stolle and Micheletti offer a candid discussion of the limitations of political consumerism as a form of participation and as a problem-solving mechanism.
This paper engages Adam Smith’s reflections concerning the moral and economic dimensions of business–society relations in the context of the Multinational Corporation (MNC). The paper argues that Smith formulates a pronounced moral criticism of prevailing corporate business practices, which emphasize profit while de facto undermining the moral underpinnings and social cohesion of commercial society. Rather than simply promoting selfish profit maximization by individuals, businesses, and society at large, Smith’s work reveals a deeply entangled analysis of the complex interplay between material interests, moral aspects of human behavior, and Smith’s overall goal of broad socioeconomic welfare. The balancing of moral and material motivations requires the social embeddedness of economic exchange within normative community frameworks. In this context, the sociopsychological process of moral approbation via Smith’s impartial spectator mechanism has the potential to temper humans’ tendency for excessive (material) self-love. Smith’s scrutiny of internationally active corporations problematizes a range of institutional and governance issues and their implications for the moral bonds between individuals, MNCs, and global society. Most importantly, Smith worries about the potentially negative impact of increasingly anonymous and emotionally distant economic relationships between market participants on their ability to reckon with the moral consequences of their actions. Building on Smith’s entangled perspective, the paper proposes a normatively grounded framework to critically contend with contemporary efforts to redefine corporate citizenship in the global economy.
With an emphasis on deliberative processes that occur between managers and stakeholders, the political corporate social responsibility (PCSR) literature has made important advances to our understanding of CSR activities. However, these contributions have tended to focus exclusively on organizational settings. We contend that an understanding of firm-level CSR is incomplete without considering the interrelations between organizations and the wider socio-political environment. Building on work in comparative politics about formal and informal institutions, we posit that firm-level CSR will rise as the deliberative capacity of political institutions increases. The term deliberative capacity refers to the capacity of political institutions to enable diverse stakeholders to collectively assemble and voice their opinions. Findings from our analysis of 21,941 firm-year observations, comprising 3563 unique firms from 34 countries over the 2005–2017 period, suggest that the deliberative capacity of formal and informal institutions not only enhances firm-level CSR activities independently but also complements the deliberative processes at an organizational level in promoting CSR.
The article examines the role of institutions in mediating the interface between global challenges, transnational partnerships and the domestic politics of sustainable development. Empirically it focuses on the Amazon Region Protected Areas (ARPA) partnership, as a new type of governance that engages transnational and domestic actors in pursuing more sustainable management of land use, biodiversity conservation and sustainable development in the Brazilian Amazon. Drawing on extensive documentary analysis and field work, the study analyzes ARPA's institutional and political effects in Brazil. The case study reveals the materialization of a range of capacity-strengthening and environmental impacts, alongside with institutional and distributional effects. ARPA has also built upon the infusion of significant domestic resources and relied on a conductive political environment and pre-existing initiatives. Domestic institutions have thus been arbiters of transnational influence, engaging with the partnership first and foremost to support state and sub-state institutions and ambitious conservation priorities. On the other hand, while local communities and civil society organizations managed, through advocacy pressure and consultations, to incorporate a greater attention to local livelihoods and participation, the socio-economic components of the program remained weaker, with more limited success in terms of poverty alleviation. The conclusion draws broader implications for the role of transnational partnerships in linking the global governance of environmental systems, domestic institutions and development objectives.
This paper examines whether US cities’ membership in voluntary climate clubs improves the municipal bond ratings issued by S&P, Moody’s, and Fitch. We suggest that only clubs focused on climate adaptation could help cities signal their resilience to climate risks and their ability to service their municipal bonds. Yet, club membership is only a signal of intent. By itself, it does not offer concrete evidence that cities have adopted adaptation policies or enhanced their resilience to climate risks. We examine three climate clubs: ICLEI, whose membership obligations cover climate and other environmental issues; C40, whose scope covers both climate mitigation and adaptation; and 100 Resilient Cities (100RC), which focuses on adaptation only. Employing a two-way fixed effects model for a panel of 80 US cities from 1995 to 2018, we find that 100RC membership leads to a small improvement in bond ratings. This has important policy implications: Assurances about implementing adaptation policy, as opposed to evidence about how adaptation reduces climate risks, could have spillover effects on municipal finance. In such cases, climate adaptation could have tangible implications for city-level finances.
Significance
Due to market and system failures, policies and programs at the local level are needed to accelerate the renewable energy transition. A voluntary environmental program (VEP), such as SolSmart, can encourage local governments to adopt solar-friendly best practices. Unlike previous research, this study uses a national sample, more recent data, and a matched control group for difference-in-differences estimation to quantify the causal impact of a VEP in the public, rather than private, sector. We offer empirical evidence that SolSmart increased installed solar capacity and, with less statistical significance, the number of solar installations. The results inform the design of sustainability-focused VEPs and future research to understand the causal pathways between local governments’ voluntary actions and solar market development.
This contribution presents the findings from a two-stage systematic review. It relied on PRISMA’s methodical protocol to capture and analyze high-impact articles, that were fo-cused on the International Standards Organization’s ISO 14001 - Environment Management Systems. Whilst stage 1 shed light on the most cited publications since 1995, stage 2 nar-rowed down the search results between 2015 and 2021. The findings suggest that the use of this certifiable standard may result in operational efficiencies through better utilization of resources and waste management systems. It provides opportunities for practitioners to re-conceive their license to operate and to enhance their credentials with stakeholders. It considered potential pitfalls like high certification costs, time constraints as well as an in-crease in paperwork and red tape. Moreover, it recognizes that managers and employees may not be willing to implement changes as they may prefer the status quo or could not be knowledgeable enough to integrate the standard’s environment management systems with existing practices.
Global governance has come under increasing pressure since the end of the Cold War. In some issue areas, these pressures have led to significant changes in the architecture of governance institutions. In others, institutions have resisted pressures for change. This volume explores what accounts for this divergence in architecture by identifying three modes of governance: hierarchies, networks, and markets. The authors apply these ideal types to different issue areas in order to assess how global governance has changed and why. In most issue areas, hierarchical modes of governance, established after World War II, have given way to alternative forms of organization focused on market or network-based architectures. Each chapter explores whether these changes are likely to lead to more or less effective global governance across a wide range of issue areas. This provides a novel and coherent theoretical framework for analysing change in global governance.
We need new analytical tools to understand the turbulent times in which we live, and identify the directions in which international politics will evolve. This volume discusses how engaging with Emanuel Adler's social theory of cognitive evolution could potentially achieve these objectives. Eminent scholars of International Relations explore various aspects of Adler's theory, evaluating its potential contributions to the study of world orders and IR theory more generally. Each chapter focuses on a different aspect of the social theory of cognitive evolution, such as power, morality, materiality, narratives, and practices, and identifies new theoretical vistas that help break new ground in International Relations. In the concluding chapter, Adler responds, engaging in a rich dialogue with the contributors. This volume will appeal to scholars and advanced students of International Relations theory, especially evolutionary and constructivist approaches.
To reduce their environmental impacts, a growing number of organizations worldwide have implemented environmental management systems (EMSs). In these organizations, energy conservation activities become usual behaviors for employees; thus, we hypothesize that employees continue such energy saving behaviors at home. This hypothesis is supported by data from surveys of individuals in Japan. Specifically, we find that the probability of engaging in energy saving practices at home is higher and that expenditures on electricity use are lower for individuals who work in organizations that implement EMSs than for individuals who do not work in organizations with EMSs. Our results suggest that beyond the original purpose of helping organizations reduce their environmental impacts, EMSs work as an intervention to promote household energy saving.
Conventional wisdom suggests that preferential trade agreements (PTAs) contain environmental standards because the highly regulated North imposes these standards on the reluctant South. But what about the increasing occurrence of environmental standards in South-South trade agreements? Are they simply a product of a diffusion process from North-South PTAs? Or do environmental standards in South-South PTAs signal real commitment to both environmental regulation and performance? We test these two perspectives against each other by quantitatively examining original data on environmental provisions in 479 PTAs. Using performance-based indicators our results support the notion that if developing countries take on the obligation of committing to environmental. When relying on a measure on commitment levels in the Paris Agreement on Climate Change, the results rather point to the diffusion-based perspective. In contrast to the conventional wisdom, the study shows that environmental protection is not always extrinsically motivated by developed countries.
Today, the principles of a green economy are being updated and studied not only by experts in the field of environmental economics, but also in various political circles. A large number of countries use different instruments and principles of a green economy in their development policies and strategies. However, some countries fear this transformation because they believe that the transition to a green economy model may hinder their development. Thus, the formation of a clear methodology for the “green” economy is extremely relevant today. The main purpose of the study is to form ways to improve green economy and environmental protection in the context of governance. The article discusses the prerequisites for implementation, the basic principles of Green economy into the system of public administration, and also provides a system for modelling ways to implement the principles of Green economy using the IDEF0 methodology. This methodology allows to clearly seeing the ways and means of achieving this goal.
Many oil and gas firms claim they are going green. But are they actually walking the talk? We analyze the political and economic behavior of publicly traded oil majors to understand the degree to which they are decarbonizing. We collect a wide range of firm-level data from 2004 to 2019, including a novel measurement of political behavior based on original coding of corporate earnings calls. Our analysis yields four main findings. First, firms’ political and economic behavior are not necessarily correlated, demonstrating the value of a two-pronged political economy approach to the study of multinational firms. Second, not a single firm is shifting away from fossil fuels during the time frame studied. Changes in business behavior have been relatively modest in scope. The most ambitious firms are engaging in hedging—mitigating risk through diversification rather than moving toward decarbonization. Third, major oil and gas firms meliorate anti-climate political positions between 2010 and 2018. Finally, firms with greater progress towards decarbonization tend to be located in or sell their products in jurisdictions with more stringent environmental regulation, have smaller refining sectors, and be involved in more industry coalitions.
This chapter represents a comparative study of the emergence of environmental policies in the Chilean and Swedish copper industry. The chapter identifies a number of key factors which helps to explain dissimilar characteristics of actions to protect the environment in both countries as well as the timing for these actions. One key difference identified—besides obvious factors such as income levels, political systems and dependency of foreign direct investments—concerns the very drivers behind the greening of the industry. While governmental regulation developing from the 1960s represented the primary driver behind the green transformation of Swedish copper industry, it took until the 1990s before the Chilean copper companies started to adopt their first environmental policies ahead of regulation, and called for the Chilean government to act. We suggest that this happened as globalisation took hold from the early 1990s, and foreign companies operating in Chile demanded environmental standards that harmonised with those in the Western world, at the same time as the Chilean industry needed to enhance an environmental reputation in the global market. Thus, while the Swedish industry was much driven by national regulation to invest in cleaner technologies, it was the pressure from globalisation that drove the Chilean industry to clean up their acts.
To achieve effective stakeholder governance in the context of international social accountability certification (SA8000) requires constructing a network of agreement. In a case study of a small-to-medium-sized enterprise (SME), we examine managers’ attempts at enrolling participants in the supply chain to investigate how they strive to engage these stakeholders. We adopt actor-network theory (ANT) and sensemaking theory to develop a novel approach to understanding social accountability (SA) standards’ certification in stakeholder networks. We argue that the design and operation of any SA standard across a network requires not only attempts at enrolling other participants in the supply chain but management contextualizing and problematizing the terms of their involvement.
In recent years, the idea of green growth has been widely discussed not only by experts in environmental economics, but also in various political forums. Many countries use various tools and principles of green growth in their national policies and growth strategies. However, some countries fear that the transition to a green growth model may hamper their development. The article discusses the prerequisites for implementation, the basic principles of green growth into the system of public administration, and also provides a system for modelling ways to implement the principles of green growth using the IDEF0 (functional modeling methodology and a graphical description of the processes) methodology. This methodology allows to clearly see the ways and means of achieving this goal. Considering the importance of the economic component in all processes of monitoring, control and protection of air, water and soil from pollution processes, a system for modeling ways to implement the principles of green growth using the IDEF0 methodology has been formed today is especially relevant.
An increasing number of sport organizations express interest in international accreditation standards as a way of tackling environmental sustainability (ES) challenges. This article, however, argues that the commercial context of these standards and “the bazaar economy” in which its suppliers operate may hamper the diverse solutions needed to reduce the ecological footprint of sport. At the same time, it acknowledges that standards are useful to certain sporting organizations. To sort out the pros and cons of the relation between such standards and ES work in sport organizations, the Formula E (for Electric) championship is used as case example. The championship became the first category in motorsport to receive ISO certification in 2018, and 2 years later, it achieved net zero carbon footprint from inception. On that basis, the article provides a typology that provides coordinates for empirical research on how sport organizations may avoid “organizational hypocrisy” in their ES work by viewing the pros and cons of ISO certification. While the practical implication is insight into what it takes for a sport organization to achieve a specific certification, the academic implication is conceptual coordinates for empirical and comparative research of ES initiatives and certifications.
This is an exploratory study which investigates the governance mechanisms created by banks to support the implementation of sustainable lending. A content analysis of the websites of the 62 members of the Global Banking Alliance on Values reveals that evidence-based disclosures demonstrate the commitment of some banks to govern their sustainable lending activities. The publication of the list of loan borrowers emerged as a governance-by-disclosure mechanism in the implementation of sustainable lending. The publication of loan borrowers has contributed to the improvement of information asymmetry in the banking industry. It was also demonstrated how shared values among stakeholders could contribute to the development ofeffective governance mechanisms. Based on the content analyses, the study concludes with two recommendations. First, the banking industry should consider the publication of loan borrowers to promote discipline within the banking sector. Second, the published information provides evidence to the promotion of sustainability practices.
International organizations and their secretariats, called international public administrations (IPAs), have been found to hold considerable authority in world politics. This study conceptualizes and measures IPA authority in the digital sphere. It proposes the concept of digital authority to measure the authority of actors in online social networks (OSN), such as Twitter. Applying exponential random graph models (ERGMs) based on Twitter data during climate change negotiations the article compares the authority of IPAs to that of other actors. The findings show that IPAs are attributed as much authority as state actors in global climate communication networks on Twitter.
In this article, we explore how corporate social responsibility may serve to mitigate the confl ict between the utopia that many people—particularly those from underprivileged backgrounds in emerging markets states—associate with globalization and, on the other hand, the detrimental effect this globalization often actually has both on the quality of life of people and on the environment. Empirical data is drawn from field research on firm and local community relations in South Africa and China. We consider the extent to which corporate social responsibility may be a means to move beyond both utopian hopes and the dystopian reality of globalization.
Transnational private sustainability governance, such as eco‐certification, does not operate in a regulatory or jurisdictional vacuum. A public authority may intervene in private governance for various reasons, including to improve private governance's efficient functioning or to assert public regulatory primacy. This article argues that to properly understand the nature of public‐private governance interactions—whether more competitive or complementary—we need to disaggregate a public authority's intervention. The article distinguishes between four features of private governance in which a public authority can intervene: standard setting, procedural aspects, supply chain signaling, and compliance incentives. Using the cases of the European Union's policies on organic agriculture and biofuels production, the article shows that public‐private governance interaction dynamics vary across these private governance features as well as over time. Furthermore, the analysis highlights the importance of active lobbying by private governance actors in influencing these dynamics and the resulting policy outputs.
As much as environmental problems manifest themselves as problems with the natural environment, environmental problems—and their solutions—are ultimately social and behavioral in nature. Just as the natural sciences provide a basis for understanding the need for environmental policy and informing its design, the social sciences also contribute in significant ways to the understanding of the behavioral sources of environmental problems, both in terms of individual incentives and collective action challenges. In addition, the social sciences have contributed much to the understanding of the ways that laws and other institutions can be designed to solve environmental problems. In this review article, we distill core intellectual frameworks from among the social sciences that scaffold modern environmental policy in industrialized country contexts—focusing on key contributions principally from political science, economics, psychology, and sociology to the analysis of environmental problems and their solutions. These frameworks underlie how environmental problems are defined at multiple scales and the conceptualization and empirical testing of policy solutions that seek to shape human behavior in ways that improve environmental quality and promote sustainable economic growth. With the planet facing continued environmental threats, improving environmental policy decision‐making depends on the insights and frameworks of social science research in addition to those of the natural sciences.
Abstract Using Japanese facility-level data, we estimate the effects of ISO 14001 certification on the promotion of more advanced practices, namely green supply chain management (GSCM). Our results show that ISO 14001 promotes GSCM practices, in that facilities with environmental management systems (EMS) certified to ISO 14001 are 40 percent more likely to assess their suppliers’ environmental performance,and 50 percent more likely to require that their suppliers undertake specific environmental practices. Further, we find that government approaches that encourage voluntary EMS adoption indirectly promote GSCM practices, in that the probability offacilities’ assessing their suppliers’ environmental performance,and requiring them to undertake specific environmental practices increases by 9 percent and 10 percent, respectively, if a government assistance program exists. Combined, these findings suggest that there may be significant but previously unnoticed spillover effects of ISO 14001 and government promotion,of voluntary action. Key Words: voluntary actions, positive spillover, environmental management systems, ISO
Purpose
The purpose of this paper is to identify the critical factors (CFs) of ISO 14000; to determine if ISO 14000 certification results in improved organizational performance; and to analyze the levels of and changes in these CFs and levels of and changes in the indicators of organizational performance (IOPs) in relation to firm attributes considered in the present study.
Design/methodology/approach
The study employs questionnaire‐survey approach to obtain the practitioners' perceptions of ISO 14000 certification, levels of presence of CFs and changes in CFs due to certification, levels of presence of IOPs and changes in IOPs due to certification. The data collected have been analyzed by using statistical techniques.
Findings
The firms regard the preparation for emergencies as an integral part of environmental management system (EMS), and they seem to initially struggle to identify environmental issues that are to be given higher importance. Further, the certified firms find it difficult to continuously improve their environmental management processes. There are significant changes in all the CFs and IOPs due to ISO 14000 certification. Furthermore, more‐experienced firms have higher mean values of levels of all CFs, in comparison with less‐experienced firms. In the course of time, these firms appear to understand the EMS and effectively implement it in order to realize long‐term benefits.
Research limitations/implications
Results of the study are dependent on the nature and number of respondents, i.e. on the perceptions of the top management responsible for quality certification, and the sample size (number of respondents in the current study is 36 due to limited response rate and other operational constraints).
Practical implications
The present study would enable the practitioners to benchmark their organizations (in respect of levels of presence of CFs and levels of presence of IOPs) with those of their competitors, with the best‐in‐class, and also with the industry's mean level. The study also enables one to compare different categories of firms (e.g. firms with low, medium and high levels of turnover; national and international firms; etc.). Since, there is a significant improvement in the organizational performance due to certification, the study provides a strong empirical justification for non‐certified firms to go in for ISO 14000 certification.
Originality/value
The study conceptualizes ISO 14000 as a seven dimensional framework. Further, it has also identified several IOP related to ISO 14000 certified firms. A questionnaire has been developed to obtain the perceptions of top management about the ISO 14000 certification and related factors and indicators; the proposed instrument can be used for several purposes such as functional benchmarking.
Over the past decade conservation groups have put considerable effort into educating consumers and changing patterns of household consumption. Many groups aiming to reduce overfishing and encourage sustainable fishing practices have turned to new market-based tools, including consumer awareness campaigns and seafood certification schemes (e.g. the Marine Stewardship Council) that have been well received by the fishing and fish marketing industries and by the public in many western countries. Here, we review difficulties that may impede further progress, such as consumer confusion, lack of traceability and a lack of demonstrably improved conservation status for the fish that are meant to be protected. Despite these issues, market-based initiatives may have a place in fisheries conservation in raising awareness among consumers and in encouraging suppliers to adopt better practices. We also present several additional avenues for market-based conservation measures that may strengthen or complement current initiatives, such as working higher in the demand chain, connecting seafood security to climate change via life cycle analysis, diverting small fish away from the fishmeal industry into human food markets, and the elimination of fisheries subsidies. Finally, as was done with greenhouse gas emissions, scientists, conservation groups and governments should set seafood consumption targets.
This study explores the development of communitarian regulation in the American chemical industry by focusing on the history and challenges facing Responsible Care, the leading example of regulation by an industry association on the environmental scene today.
While there is little empirical evidence regarding which types of environmental management systems (EMSs) are associated with greater environmental improvements, governments worldwide are encouraging facilities to adopt them. This research compares the environmental performance of facilities that adopt ISO 14001-certified EMSs, complete (uncertified) EMSs, and incomplete EMSs, across multiple environmental media. We analyze these relationships for manufacturing facilities in seven countries using a two-stage model to control for selection bias. Our findings indicate that the adoption of all types of EMSs is related to improved environmental performance in an international setting. However, ISO 14001-certified EMSs are associated with environmental improvements to a broader array of environmental media. These findings offer important implications about which types of EMSs have greater promise as voluntary environmental governance tools.
Voluntary environmental programs (VEPs) promise to provide firms and facilities additional flexibility in managing their environmental affairs while increasing internal efficiencies and improving their public image. Although stakeholder input is thought to improve program development, little is known about the extent that stakeholders are involved in the VEP design process. Based on a survey of 61 program managers, this research distinguishes between the intensity and diversity of stakeholder involvement and uses these two concepts to assess VEP development relative to government, industry and third-party sponsorship. Even in the absence of a mandate, all three sponsors include a variety of stakeholders in program design. While there is evidence that collaborative relationships are developing between sponsors and a range of stakeholder groups, variations in the intensity of involvement among sponsors suggest that some stakeholders may have disproportionate levels of influence in the design of VEPs.
Certification schemes have emerged in recent years to become a significant and innovative venue for standard setting and governance in the environmental realm. This review examines these schemes in the forest sector where, arguably, their development is among the most advanced of the sustainability labeling initiatives. Beginning with the origins, history, and features of schemes, the review synthesizes and assesses what we know about the direct effects and broader consequences of forest certification. Bearing in mind underlying factors affecting producers' decisions to certify, direct effects are examined by describing the uptake of schemes, the improvements to management of audited forests, and the ameliorative potential of certification for landscape-level concerns such as deforestation and forest protection. In assessing broader consequences, we look beyond the instrument itself to detail positive and negative unintended consequences, spillover effects, and longer-term and slow-moving effects that flow from the emergence of the certification innovation.
Stakeholders who seek to reward or punish businesses for their environmental programs often cannot observe these organizations’ internal policies and operations. To address these informational problems, and signal their beyond-compliance environmental commitments, some businesses are participating in voluntary environmental programs (VEPs). This article examines whether business managers associate the brand value of VEPs – due to their differing program sponsors – with the perceived preferences of their critical stakeholders. Drawing on a novel data set of nearly 300 organizations, we assess business’ participation in 19 government- and industry-sponsored VEPs. We find that managers who recognize the importance of stakeholder influences on their business’ environmental practices are more likely to participate in a VEP but that pressures from different stakeholders are associated with variations in organizations’ participation in either government- or industry-sponsored VEPs.
This article analyzes the factors that explain the international diffusion of voluntary international management standards. We argue that international management standards should not be analyzed in isolation but in conjunction with other standards and their institutional environment. We present two opposite views explaining how the previous diffusion of management standards facilitates or hampers the adoption of new management standards. We test a comprehensive model of diffusion of international environmental management standards within the chemical industry using a panel of 113 different countries during the period 2000 to 2003. Our results show that the previous experience of businesses in voluntary standards such as the Chemical Industry's Responsible Care Program or ISO 9000, government commitment toward Environmental Management Systems Standards, and the level of activity of international nongovernmental organizations in the country of adoption, impact positively on the adoption of ISO 14001 by chemical firms. Unlike previous studies that focused mostly on cross industry analyses, we do not find trade-related factors significant while explaining adoption in the chemical industry. Our results differ, therefore, from previous research and highlight the need to isolate industry effects to understand the diffusion of international standards.
This study analyzes the initial implementation of the Sustainable Slopes Program a voluntary environmental initiative established by the U.S. National Ski Areas Association in partnership with federal and state government agencies. Our findings indicate that participation of western ski areas in the Sustainable Slopes Program is related to institutional pressures in the form of enhanced federal oversight and higher state environmental demands exerted by state agencies, local environmental groups and public opinion. The analysis also suggests that, despite these institutional pressures, participant ski areas appear to be correlated with lower third-party environmental performance ratings. This behavior seems to reflect the lack of specific institutional mechanisms to prevent opportunism in the current design of the Sustainable Slopes Program. That is, the program does not involve specific environmental standards, lacks third-party oversight, and does not have sanctions for poor performance.
When a firm suffers a major accident, its stock price is likely to become more volatile, but does this accident also increase the volatility of the stocks of rivals? Following a major accident, rivals sometimes unite through their trade association to implement an industry self-regulatory program. Do such collective efforts help to stabilize the stocks of firms in these threatened industries? This paper presents a longitudinal empirical study of the influence of a major accident by a single firm - Union Carbide's deadly poison gas leak in Bhopal, India - on the volatility of the stock prices of other chemical firms, and the influence of this industry's intensive collective efforts to recover from this major accident - the American Chemistry Council's Responsible Care Program - on the stock price volatility of these same firms. Results indicate that the volatility of the stocks of chemical firms increased after Union Carbide's tragic accident and that this volatility decreased for Responsible Care members but not for non-members. These findings suggest that a firm's stock price may be destabilized by the actions of a rival and that through cooperation with rivals, a firm may restabilize its stock price. Thus, this study provides empirical insight about the nature of the interdependent relationship among rivals and the benefits that trade associations and industry self-regulation may provide for participating, and non-participating, firms.
Although a growing body of evidence suggests that publicly disclosing information about plants’ environmental performance can motivate emissions reductions, this phenomenon remains poorly understood. To help fill this gap, this paper presents original data from a survey of plants participating in the Program for Pollution Control, Evaluation and Rating (PROPER), Indonesia’s widely-acclaimed public disclosure program. These data suggest that a key means by which PROPER spurs abatement is improving factory managers’ information about their own plants’ emissions and abatement opportunities. This finding contrasts with the prevailing view in the literature that public disclosure enhances pressures to abate placed on firms by external agents such as community groups and shareholders. But our data also suggest that PROPER’s "environmental audit" effect operates in concert with external pressures. Therefore, simply supplying new information to plant managers without making that information public may not be sufficient to motivate significant abatement
A conceptual framework and empirical case studies of the policy effect of voluntary programs sponsored by industry, government, and nongovernmental organizations.
The recent growth of voluntary programs has attracted the attention of policymakers, nongovernmental organizations, and scholars. Thousands of firms around the world participate in these programs, in which members agree to undertake socially beneficial actions that go beyond the requirements of government regulations, such as following labor codes in the apparel industry, adhering to international accounting standards, and adopting internal environmental management systems. This book analyzes the efficacy of a variety of voluntary programs using a club theory, political-economy framework. It examines how programs' design influences their effectiveness as policy tools. It finds that voluntary programs have achieved uneven success because of their varying standards and enforcement procedures.
The club theory framework views voluntary programs as institutions that create incentives for firms to incur the costs of taking progressive action beyond what is required by law in exchange for benefits that nonmembers do not enjoy (such as enhanced standing with stakeholders). Voluntary Programs develops this theoretical framework and applies it to voluntary programs sponsored by industry associations, governments, and nongovernmental organizations, organized around policy issues such as “blood diamonds,” shipping, sweatshops, and the environment. The wide diversity of cases—across sectors, sponsoring organizations, and objectives—provides valuable applications of the club framework, generates new insights for future research, and offers practical guidance for designing effective programs.
ContributorsDavid P. Baron, Tim Bartley, Tim Büthe, Cary Coglianese, Elizabeth R. DeSombre, Daniel W. Drezner, Daniel Fiorino, Mary Kay Gugerty, Virginia Haufler, Matthew J. Kotchen, Mimi Lu, Jennifer Nash, Matthew Potoski, Aseem Prakash, Klaas van 't Veld
Voluntary programs have become widespread tools for governments and nongovernmental actors looking to improve industry's environmental and regulatory performance. Voluntary programs can be conceptualized as club goods that provide nonrival but potentially excludable benefits to members. For firms, the value of joining a green club over taking the same actions unilaterally is to appropriate the club's positive brand reputation. Our analysis of about 3,700 U.S. facilities indicates that joining ISO 14001, an important nongovernmental voluntary program, improves facilities' compliance with government regulations. We conjecture that ISO 14001 is effective because its broad positive standing with external audiences provides a reputational benefit that helps induce facilities to take costly progressive environmental action they would not take unilaterally.
This chapter explores a means of developing a formal economic model that can situate certain elements of club theory within a model of the private provision of a public good. “Warm glow” preferences are presented to begin the formulation of this model. This preference pertains to how. when consumers purchase of a green good, they care only about the private provision of the green characteristic. This model is then further extended to account for more general preferences, compared with the socially optimal club with the open-access market equilibrium club. In conclusion, the chapter develops an economic model that serves as a starting point for formal thought regarding “voluntary programs as clubs, nested within the context of public goods provision.”
An increasingly common regulatory tool is one that delegates the duty to provide information to the regulated entities, creating new problems in principal-agency models of regulation. Failure to comply with regulations mandating information provision is as much due to ignorance of reporting requirements as to willful evasion. A modified detection controlled estimation model for coverage, violation, and detection of facility compliance with the EPA's Toxics Release Inventory, estimated for facilities in Minnesota in 1991. Violation is better understood by those variables associated with the likelihood that the firm is ignorant of TRI reporting requirements, than by those associated with evasion. Firms in violation tend to be small facilities, releasing or transferring small amounts of toxins to the environment.
Environmental management systems (EMSs) are intended to formalize procedures for managing and reducing environmental impacts. Construction firms typically do not have comprehensive and certified environmental management systems. This paper discusses the elements of environmental management systems, the relationship to the ISO 14001 standard, and the importance for construction firms to implement an EMS. A case study of a certified environmental management system for a construction firm is presented. Benefits and costs of such systems are identified. The paper concludes that construction firms should begin to work towards implementing more complete environmental management systems, although fully certified systems are not essential.
Construction firms all over the world are increasingly seeking to obtain ISO 14001. The rapid growth in the number of ISO 14001 applications in Turkey and the share from the construction sector in this number, as a leading sector, is rather striking. This paper, using a structured questionnaire survey, investigates whether there is any dependence or relation between construction firms characteristics and having ISO 14001 certification and any difference in the perceptions related to ISO 14001 by considering both firm characteristics and two different groups as certified and non-certified firms. Additionally, it examines the perceived benefits of having ISO 14001 for certified construction firms. According to the results of analysis, although there is not any difference in perceptions on ISO 14001 certification in terms of firm characteristics and being as certified and non-certified and their both positive opinions about ISO 14001 certification. There is a relation between firms characteristics and having ISO 14001 certification. ISO 14001 certification contributes to construction firms not only in terms of environmental benefits but also with corporate management and marketing effects, thus verifying that the ISO 14001 has a positive impact on the Turkish construction sector.
Globalization critics argue that international trade spurs a race to the bottom among national environmental standards. ISO 14001 is the most widely adopted voluntary environmental regulation which encourages firms to take environmental action beyond what domestic government regulations require. Drawing on a panel study of 108 countries over seven years, we investigate conditions under which trade linkages can encourage ISO 14001 adoption, thereby countering environmental races to the bottom. We find that trade linkages encourage ISO 14001 adoption if countries' major export markets have adopted this voluntary regulation.
Environmental Management Systems (EMSS) represent a new generation of voluntary “beyond compliance” environmental policies that neither set substantive goals nor specify final outcomes. As a result, many stakeholder groups are lukewarm toward them. Since 1993 two major supranational EMSs—ISO 14001 and the European Union's Environmental Management and Audit Scheme (EMAS)—have been introduced. Firms receive formal accreditation after their EMS has been certified by outside verifiers. This accreditation can potentially bestow monetary and nonmonetary benefits on these firms.
Firm-level EMS adoption patterns in the United Kingdom, Germany, and the United States vary, thereby suggesting that national contexts influence firms' responses to them. In Germany and the U.K. a significant number of sites have become either ISO 14001 or EMAS certified, while the take-up of ISO 14001 in the U.S. (EMAS is available only to European sites) has been less enthusiastic.
This article begins with the hypothesis that firms in countries with adversarial economies— where regulators and business are on less than friendly terms—are less likely to adopt EMS-based programs. This hypothesis explains why ISO 14001 take-up has been relatively high in the U.K. and relatively low in the U.S. However, it cannot explain (1) the high rate of take-up of both ISO 14001 and EMAS in Germany, where the stringency of environmental legislation has been a contentious issue between the government and industry and (2) why EMAS has been more popular in Germany than in the U.K. This article argues that the original hypothesis, while largely correct, is underspecified. To better explain the cross-national differences in EMS adoption, one must take into account the type of adversarial economy (adversarial legalism versus prescriptive interventionism) and the nature of the policy regime (procedural versus substantive).
When adopted in 1993, the European Union's Eco-Management and Audit Scheme (EMAS) was viewed as emblematic of a new policy approach involving more flexible and market-based environmental instruments. A few years after coming into force, EMAS does not appear to be a tremendous success in terms of industrial participation. Apart from in Germany and Austria, participation is insignificant and comparatively very far behind that in ISO 14001, the environmental management standard of the International Organization for Standardization. The paper seeks to explain this modest result. It focuses on the influence of the European and national regulators on industrial participation. Using a comparative analysis of the implementation of EMAS in France, Germany, the Netherlands and the United Kingdom, it argues that the most powerful participation leverage has been the granting of regulatory relief for registered companies. This leads one to be pessimistic as to the future of EMAS. The possibility and scope for a lighter regulatory touch are primarily nationally specific since they are related to the national regulatory traditions. Consequently, the systematic and comprehensive use of this leverage is unlikely to generalize. Copyright © 2002 John Wiley & Sons, Ltd. and ERP Environment.
This paper examines whether state governments perform systematically less environmental enforcement of facilities in communities with higher minority and low-income populations. Although this is an important claim made by environmental justice advocates, it has received little attention in the scholarly literature. Specifically, I analyze state regulatory enforcement of three U.S. pollution control laws-the Clean Air Act, the Clean Water Act, and the Resource Conservation and Recovery Act-over the period 1985-2000. To test for disparities in enforcement, I estimate a series of count models and find strong evidence across each of the three environmental laws that states perform less enforcement in poor counties, but little evidence of race-based inequities. © 2009 by the Association for Public Policy Analysis and Management.
Compared to other economically advanced democracies, the United States is uniquely prone to adversarial, legalistic modes of policy formulation and implementation, shaped by the prospect of judicial review. While adversarial legalism facilitates the expression of justice-claims and challenges to official dogma, its costs are often neglected or minimized. A survey of existing research, together with a case study of environmental regulation in the Port of Oakland, indicates the extent to which adversarial legalism causes (or threatens) enormous dispute-resolving costs and procedural delays, which in turn distort policy outcomes. Adversarial legalism, moreover, has increased in recent decades, as Americans have attempted to implement the ambitious, socially transformative policies of activist government through political structures, forms of legislation, and legal procedures that reflect deep suspicion of governmental authority.
In an attempt to avoid costly regulation and liability as a result of externalities, a number of trade associations have promoted industry self-regulation – the voluntary association of firms to control their collective behavior. However, previous studies have found that, without explicit sanctions for malfeasance, such self-regulatory programs are likely to attract more polluting firms. In this paper, we examine four environmental self-regulatory programs in the chemical, textile, and pulp and paper industries. Using a sample of over 4000 firms within these industries, we find evidence that in at least one program more polluting firms tended to join, while in another cleaner firms were more likely to join. We propose that differences in the structure of the programs drive the appearance of this form of adverse selection. In particular, we speculate that only when self-regulatory programs have explicit sanctions for malfeasance may they avoid adverse selection problems. Copyright © 2003 John Wiley & Sons, Ltd and ERP Environment.
In this article we explore how much state is necessary to make governance work. We begin by clarifying concepts of governance and the “shadow of hierarchy” and we follow this clarification with a brief overview of empirical findings on governance research in developed countries. We then discuss the dilemmas for governance in areas of limited statehood, where political institutions are too weak to hierarchically adopt and enforce collectively binding rules. While prospects for effective policymaking appear to be rather bleak in these areas, we argue that governance research has consistently overlooked the existence of functional equivalents to the shadow of hierarchy. We assert that governance with(out) government can work even in the absence of a strong shadow of hierarchy, we identify functional equivalents to the shadow of hierarchy, and we discuss to what extent they can help overcome issues of legitimacy and effectiveness in areas of limited statehood.
Over the last two decades environmental issues have become important in public and business policy. This book asks why firms sometimes voluntarily adopt environmental policies which go beyond legal requirements. It employs a new-institutionalist perspective, and argues that existing explanations, especially from neoclassical economics, concentrate on external factors at the expense of internal dynamics. Prakash argues that ‘beyond-compliance’ policies are due to two types of intra-firm processes, which he describes as power- and leadership-based. His argument is supported by analysis of ten cases within two firms - Baxter International Inc. and Eli Lilly and Company - including interviews with managers, and access to meetings and documents. This book therefore examines the internal working of firms’ environmental policy in a theoretically rigorous way, providing a significant contribution to the theory of the firm. It will be valuable for students of business and environmental studies, as well as political economy and public policy.
Voluntary environmental programs are codes of progressive environmental conduct that firms pledge to adopt. This paper investigates whether ISO 14001, a voluntary program with a weak sword-a weak monitoring and sanctioning mechanism-can mitigate shirking and improve participants' environmental performance. Sponsored by the International Organization for Standardization (ISO), ISO 14001 is the most widely adopted voluntary environmental program in the world. Our analysis of over 3,000 facilities regulated as major sources under the U.S. Clean Air Act suggests that ISO 14001-certified facilities reduce their pollution emissions more than non-certified facilities. This result persists even after controlling for facilities' emission and regulatory compliance histories as well as addressing potential endogeneity issues between facilities' environmental performance and their decisions to join ISO 14001. © 2005 by the Association for Public Policy Analysis and Management
This paper uses new survey evidence to analyze the effects of regulation, plant-level management policies, and other factors on the environmental compliance of Mexican manufacturers. In Mexico and other developing countries, many plants avoid complying with regulations because monitoring and enforcement are sporadic. On the other hand, some plants overcomply because their abatement decisions are strongly affected by extra legal factors. We attempt to capture both possibilities in a model of decision making under uncertainty: A plant minimizes expected pollution-related costs by setting emissions intensity (emissions/output) at the point where marginal abatement cost is equal to the expected marginal penalty for polluting. Compliance status is determined by the positive or negative gap between the regulatory standard and the plant's cost-minimizing emissions intensity. Among determinants of the latter, we focus particularly on environmental management policies: the degree of effort to reduce emissions, and the type of management strategy which is adopted. Recognizing that these policies and emissions are simultaneously determined, we use two-stage least squares for econometric estimation. Our results suggest that environmental management has a strong, independent effect on compliance, even after we control for simultaneity and take many other determinants of emissions intensity into account. We conclude that in developing countries with weak regulation, the carrot of subsidized environmental management training may provide a useful complement to the uncertain stick of conventional enforcement.
The increasing reliance of environmental policy on market-based incentives has led firms to shift from regulation-driven management approaches to proactive strategies involving the voluntary adoption of environmental management systems (EMSs). Count data and quantile regression analyses reveal that liability threats and pressures from consumers, investors and the public are motivating EMS adoption and that consumer pressures are particularly effective in increasing the comprehensiveness of EMSs of firms that would otherwise be adopting a limited EMS. We also find that a more comprehensive EMS leads to lower toxic emissions per unit output particularly for firms with higher pollution intensity in the past. EMSs result in reductions in both off-site transfers and on-site releases per unit output. Finally, we find that regulatory and market-based pressures do not have a direct impact on toxic releases but an indirect effect by encouraging institutional changes in the management of environmental concerns.
Self-regulation by multinational corporations of social/environmental impacts has been advocated as a solution to the regulatory capacity problems faced by developing states. Market pressures can provide incentives for firms to implement codes and standards, and also rely on widely available information about corporate behavior. Voluntary schemes attempt to provide reliable, standardized reporting of information. But government action—in the North and South—remains vital to effective regulation, by setting social goals and upholding the freedom of civil society actors to organize and mobilize. International organizations and legal instruments may be able to assist developing country governments in fulfilling these roles.
There has been growing interest in the use of voluntary agreements (VAs) as an environmental policy tool. This article uses a simple model to determine whether VAs are likely to lead to efficient environmental protection. We consider cases where polluters are induced to participate either by a background threat of mandatory controls (the “stick” approach) or by cost-sharing subsidies (the “carrot” approach). The results suggest that the overall impact on environmental quality could be positive or negative, depending on a number of factors, including the allocation of bargaining power, the magnitude of the background threat, and the social cost of funds.
This paper examines the motivations for participation in the voluntary 33/50 Program and the program's impact on the toxic releases and economic performance of firms in the U.S. chemical industry. It demonstrates that the benefits due to public recognition and the potentially avoided costs of liabilities and compliance under mandatory environmental regulations provide strong incentives for participation. After controlling for sample selection bias and the impact of other firm-specific characteristics, this paper shows that program participation led to a statistically significant decline in toxic releases over the period 1991–93. The program also had a statistically significant negative impact on the current return on investment of firms, but its impact on the expected long run profitability of firms was positive and statistically significant.
This paper examines participation in EPA's 33/50 program to assess the potential for voluntary environmental regulation to achieve improvements in environmental performance. The program's goal is to reduce the releases and transfers of 17 toxic chemicals by 50 percent between 1988 and 1995. The results indicate that the program has strong potential because large firms with the greatest toxic releases are most likely to participate. The results also identify a demand-based participation incentive, since participation rates are higher in industries with greater consumer contact. This suggests that public recognition is key to improving the success of voluntary environmental regulation.
This article examines the influence of patterns of emergence on the effectiveness of the Marine Stewardship Council (MSC)--a leading wild-capture fisheries certification program. Looking first at the origins and features of this program, direct effects are examined by describing the adoption of the scheme and the impacts of the fishery assessment process. In assessing broader consequences, the article examines patterns of adoption and certification effects that were not necessarily intended or anticipated. The article concludes that fisheries certification alone is unlikely to arrest the decline of fish stocks, and highlights the need for more research on the intersection of private and public efforts to address overfishing and environmental harm resulting from fishing.
"Across the United States and around the world, businesses have joined voluntary environmental codes proposed by governments and nonstate actors. Many codes require firms to establish internal environmental management systems that seek to improve firms' environmental performance and compliance with mandatory regulations. At the same time, governments are also experimenting with programs that provide incentives for business to self-policies their regulatory compliance, and promptly report and correct regulatory violations. In light of these two trends, this paper examines how governments' approach to regulatory enforcement can influence firms' incentives to comply with mandatory environmental laws and to join voluntary codes that could take them beyond compliance. Our inquiry shows that cooperative regulatory enforcement, in which firms self-police their environmental operations and governments provide regulatory relief for voluntarily disclosed violations, yields optimal, 'win-win' outcomes only when both sides cooperate. If firms are likely to evade compliance, governments are better off adopting a deterrence approach. And, if governments insist on rigidly interpreting and strictly enforcing the law, firms may have strong incentives to evade regulations and/or not join voluntary codes. Cooperation, though not easy, is possible if both sides can credibly signal that they will forgo opportunism."
Despite the proliferation of private regulatory regimes as instruments for global governance, we know little about the operations or effectiveness of these regimes at the national level. This is particularly true in developing countries where these programs are expected to have their greatest impact. This paper examines why it is that in two nations that share several properties believed to support private forms of environmental regulation, the effectiveness of one prominent global program, the Forest Stewardship Council (FSC), should vary so dramatically. Findings indicate that differences in three variables that often support successful private regulation-domestic and foreign market demand, the influence of transnational actors, and state endorsement-do not adequately account for this variation. Instead, factors that promote the supply of local programs have strongly influenced the effectiveness of the FSC in these nations, particularly the social resources and political strategies utilized by program administrators. Copyright (c) 2006 by the Massachusetts Institute of Technology.