Business and the Environment

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Business and the Environment

• Information and Environmental Performance
• Magali Delmas

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Environmental Information

• is key to help market forces promote corporate
  environmental management
• Help consumers make choices about products
• Help shareholders make choice about best
  performing company
• Help NGOs and community pressure companies to
  change their behavior

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Information as a tool to pressure firms to
improve their environmental performance

• Increase the effectiveness of market mechanisms
  and stakeholder pressures
• TRI- information about environmental performance
• ISO 14001- information about environmental
  management practices
• Ecolabels- information about environmental impact
  of products

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How to provide information ?

• The use of environmental information may or may
  not be effective depending on how the information
  is provided
• Importance is in the details of implementation of
  these various information mechanisms
• Issue of comprehensiveness of environmental
  information
• Issues of standardization of environmental
  information
• Issues of availability of environmental
  information
• Issues of communication of environmental
  information

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Toxic Release Inventory

• Provides a tool to compare companies.
• Used by all stakeholders NGOs, communities,
  investors, academia etc
• However, needs to be simplified.
• Need to be comparable. Need to take into account
  the health and environmental impacts of
  chemicals.
• http//www.scorecard.org/
• http//mapecos.org/map

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Socially Responsible Investing
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SRI and available data

• To be effective SRI needs good environmental
  performance indicators that are
• Comparable
• Credible (verification by third party)
• Include Input (organization) as well as Output
  (performance)
• Process and product (i.e. life-cycle of product)
• We are still far from this ideal

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GRI

• to make sustainability reporting as routine
  valuable as financial reporting
• used by all organizations
• based on a multi-stakeholder process for
  producing generally-accepted guidelines for
  voluntary use

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ISO 14001

• A Management tool for the firm to learn about its
  environmental performance and improve it
• Potential improvement need to provide
  information on environmental performance to
  stakeholders

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Eco-labels

• Provide consumers with accurate information
  regarding the environmental qualities of products
  
• and, by doing so, introduce a competitive dynamic
  in the marketplace
• Success is in the details

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Effectiveness of eco-labels?

• They need to reduce search and information costs
  for consumers
• Information needs to be simple.
• Information needs to be easily accessible.
• Products need to be easily found (critical mass)
• Cost of purchase needs to be perceived as similar
  to competitive products or consumers need to reap
  the benefits of adoption ASAP
• If additional cost, environmental benefit needs
  to be bundled with private benefit

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Biodynamics?

• Information needs to be simple
• definition of biodynamic is complex to
  communicate
• Information needs to be easily accessible
• Information on biodynamics is not very diffused
• Products need to be easily found (critical mass)
• Still very few biodynamic products

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Exciting career opportunities

• NGOs simplification and use of regulatory
  compliance data
• Investors Analysis of corporate reporting,
  creation of new indices
• Regulatory agencies designing new voluntary
  programs
• Corporations helping them to be more transparent
  and use information as a strategic tool