Corporate Environmentalism: Doing Well by Being Green
17 Pages Posted: 25 Aug 2007
Date Written: August 2007
Many firms go reduce their impact on the environment more than is legally required - that is, they overcomply with environmental regulations. There is clearly a cost to this, so there has to be a benefit too. I suggest that firms are consciously internalizing external costs, with a view to reducing the potential for conflict between themselves and other groups in society. The avoidance of such conflicts can pay off in the long-run in terms of stock market valuation, relations with regulators and consumer perception of the company's products.
Keywords: corporate social responsibility, external effects, corporate environmentalism
JEL Classification: H89, M20, Q20, Q50
Suggested Citation: Suggested Citation