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Green by Choice? Cross-National Variations in Firms' Responses to EMS-Based Environmental Regimes

Published online by Cambridge University Press:  13 June 2011

Kelly Kollman
Affiliation:
The George Washington University.
Aseem Prakash
Affiliation:
School of Business and Public Management, The George Washington University

Abstract

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).

Type
Research Article
Copyright
Copyright © Trustees of Princeton University 2001

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References

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idem

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37 Falk (fn. 5).

38 Other examples of supranational “beyond compliance” codes include the chemical industry's Responsible Care Program, the Valdez Principles, and the International Chamber of Commerce's Business Charter for Sustainable Development. For a theoretical discussion, see Prakash, Aseem, “Responsible Care: An Assessment,” Business and Society 39, no. 2 (2000).CrossRefGoogle Scholar

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50 MNEs have facilities across countries. Pauly and Reich (fn. 15) Research suggests that the nationality of the parent firm continues to matter in many aspects of corporate governance. However, most MNEs try to implement nonmarket strategies, especially in terms of their relationship with regulators, that respond to the characteristics of the host country. In other words, MNEs' nonmarket strategies are multidomestic and not global; Baron, David P., Business and Its Environment (Upper Saddle River, N.J.: Prentice Hall, 1999).Google Scholar This, of course, may prove problematic if the opposition to MNEs assumes a global rather than a local character—Seattle being a case in point. For a detailed discussion, see Prakash, Aseem, “Beyond Seattle: Globalization, the Non-Market Environment, and Business Strategy,” Working Paper no. 2000–03 (Department of Strategic Management and Public Policy, The George Washington University, Washington, D.C., 2000).Google Scholar

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54 See Vogel (fn. 12); and Kagan (fn. 12, 1994, 1991).

55 Environmental Protection Agency/EPA, Oral History Interview 1, William K. Reilly, http://www.epa.gov/cgi-bin/claritgw, 1995 (retrieved November 17, 2000).

To illustrate further, in the recently decided Browner v. American Trucking and American Trucking v. Browner cases by the U.S. Supreme Court, the trucking industry challenged the EPA's authority to make rules under the Clean Air Act. In 1997 the EPA promulgated regulations on stricter ozone and particulate emission standards. A large number of business groups also filed friends-of-the-courts briefs arguing that such regulatory powers are not inconsonant with the nondelegation doctrine that requires that laws be made by the elective representatives only (the EPA being a nonelected body). Further, firms were outraged that the EPA promulgates regulations predominantly to achieve public health objectives, without doing adequate cost-benefit analysis. At a broader level, this case suggests that businesses are challenging the authority of all federal regulatory agencies and reinforcing the continuation of an adversary economy.

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63 Author interview with Martin Cheesborough, Environment Agency, July 14, 1998.

64 Author interview with Bernard Walsh, Department of Environment, Transport and the Regions, July 13, 1998.

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67 Author interview with Geoff Smith, Department of Trade and Industry, July 13, 1998, and Ruth Hillary, March 9, 1999.

68 Another interview with Bernard Walsh, July 13, 1998.

69 See Department of Environment, Transport and the Regions, Environmental Reporting: Getting Started (London: HMSO, 1999)Google Scholar; idem, Sustainable Development: Opportunities for Change and Sustainable Business (London: HMSO, 1998).

idem

70 Waskow(fn. 66).

71 Kagan (fn. 12, 1994, 1991).

72 For an account of how American adversarial legalism negatively affected the U.S. government's desire/ability to ratify the Convention on Biological Diversity, see Raustiala (fn. 35).

73 Rose-Ackerman, Susan, Controlling Environmental Policy: The Limits of Public Law in Germany and the United States (New Haven: Yale University Press, 1995)Google Scholar; Weidner, Helmut, Basiselemente einer erfolgreichen Umweltpolitik (Berlin: WZB, 1995).Google Scholar

74 Katzenstein (fn. 13).

75 Müller (fn. 56); Weidner (fn. 58).

76 Prakash (fn. 1, 2000).

77 Levy, Keohane, and Haas, as well as Braithwaite and Drahos, conclude that environmental regimes that are strategically vague (similar to procedural regimes in this paper) provide governments with flexibility in implementing them and are therefore less likely to be opposed in the domestic political economy. See Levy, Marc A., Keohane, Robert O., and Haas, Peter M., “Improving the Effectiveness of International Environmental Institutions,” in Haas, , Keohane, , and Levy, , eds., Institutions for the Earth (Cambridge: MIT Press, 1993), 14Google Scholar; and Braithwaite and Drahos (fn. 1), 295.

78 Soskice, David, “Divergent Production Patterns: Coordinated and Uncoordinated Market Economies in the 1980s and 1990s,” in Kitschelt, Lange, Marks, and Stephens (fn. 36).Google Scholar

79 Roht-Arriaza, Naomi, “Environmental Management Systems and Environmental Protection: Can ISO 14001 Be Useful within the Context of APEC?Journal of Environment and Development 6, no. 3 (1997).CrossRefGoogle Scholar

80 Putnam (fn. 11).

95
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