Environment and Policy
Information-based policy and corporate sustainability
1
Introduction
o Economic actors and businesses: central to the success of environmental policies
o Need to consider how they engage with environmental aims, including beyond
legislative measures.
o Evaluate the strengths and limitations of certification and voluntary initiatives as a
framework for protecting the environment.
o Persuasive instruments (sermon): using the information to generate the response that
you want.
o Non-market-based instruments
o But works on similar logics as market-based instruments. If consumers had information
about the environmental performance of goods and firms and exercise these
preferences in their decision-making, then theoretically a different level of demand
would be reached. Informed demand would mean that the market reached a new
socially optimal equilibrium, preventing overconsumption of an environmentally
harmful product or service. In practice, the ways in which consumers take in this
information and what they do is quite variable.
o Consumers have a tendency to instinctively believe that a product performing a single
function is better at it than another producing performing the same and additional
functions. So the way in which people pickup that information and what they do with
it can be really complex.
1. Certification schemes
o One way in which people can get information about a product that they are using.
o What are the sources of information of these certification schemes? Producer or
business-led certification schemes, government-led voluntary schemes, 3rd party
certifier or authorities – all non-legislative forms of policy.
o Different levels of control and sanctions as we move through different ways of
approaching environmental policy. When we think about legislation, sanctions for
breaking las are clearly going to be higher in terms of prison sentences and fines
than the sanctions that private certification scheme can include with private
certifications or guidelines for businesses. The kinds of sanctions: the risk of
exclusion from the certification and from green markets.
, Environment and Policy
Information-based policy and corporate sustainability
2
o Voluntary standards or certifications are kinds of ‘green clubs’: different types of
green clubs depending on the level of enforcement and standards of each.
- Mandarins: stringent club standards with enforcement rules
- Country clubs: standards without enforcement rules
- Bootcamps: lenient club standards with enforcement rules
- Greenwashes: lenient standards without credible enforcement rules
o These voluntary standards are different to programmes or targets specific to a firm
in that many firms are following the same standard here, which hopefully leads to
coherency.
o The difficulty is that membership of these certifications and standards sends a
signal to consumers and grants access to green markets and eco conscious
consumers: the reason why we need to be critical of the approach.
o Example of the EU ecolabel: what kind of green club could this be? Either
greenwashes or at best country clubs. In the case of one supplier operating in
Sumatra, the supplier was having a serious impact on forests, indigenous people,
and local communities. So, the promise of the label was perhaps not being fulfilled.
o Example of the B Corps standard:
Information-based policy and corporate sustainability
1
Introduction
o Economic actors and businesses: central to the success of environmental policies
o Need to consider how they engage with environmental aims, including beyond
legislative measures.
o Evaluate the strengths and limitations of certification and voluntary initiatives as a
framework for protecting the environment.
o Persuasive instruments (sermon): using the information to generate the response that
you want.
o Non-market-based instruments
o But works on similar logics as market-based instruments. If consumers had information
about the environmental performance of goods and firms and exercise these
preferences in their decision-making, then theoretically a different level of demand
would be reached. Informed demand would mean that the market reached a new
socially optimal equilibrium, preventing overconsumption of an environmentally
harmful product or service. In practice, the ways in which consumers take in this
information and what they do is quite variable.
o Consumers have a tendency to instinctively believe that a product performing a single
function is better at it than another producing performing the same and additional
functions. So the way in which people pickup that information and what they do with
it can be really complex.
1. Certification schemes
o One way in which people can get information about a product that they are using.
o What are the sources of information of these certification schemes? Producer or
business-led certification schemes, government-led voluntary schemes, 3rd party
certifier or authorities – all non-legislative forms of policy.
o Different levels of control and sanctions as we move through different ways of
approaching environmental policy. When we think about legislation, sanctions for
breaking las are clearly going to be higher in terms of prison sentences and fines
than the sanctions that private certification scheme can include with private
certifications or guidelines for businesses. The kinds of sanctions: the risk of
exclusion from the certification and from green markets.
, Environment and Policy
Information-based policy and corporate sustainability
2
o Voluntary standards or certifications are kinds of ‘green clubs’: different types of
green clubs depending on the level of enforcement and standards of each.
- Mandarins: stringent club standards with enforcement rules
- Country clubs: standards without enforcement rules
- Bootcamps: lenient club standards with enforcement rules
- Greenwashes: lenient standards without credible enforcement rules
o These voluntary standards are different to programmes or targets specific to a firm
in that many firms are following the same standard here, which hopefully leads to
coherency.
o The difficulty is that membership of these certifications and standards sends a
signal to consumers and grants access to green markets and eco conscious
consumers: the reason why we need to be critical of the approach.
o Example of the EU ecolabel: what kind of green club could this be? Either
greenwashes or at best country clubs. In the case of one supplier operating in
Sumatra, the supplier was having a serious impact on forests, indigenous people,
and local communities. So, the promise of the label was perhaps not being fulfilled.
o Example of the B Corps standard:
