Pontus Cerin

Business incentives for sustainability: a property rights approach

Abstract Public and private demands for sustainable development put pressure on firms to develop strategies that include environmental concerns. Environmental effects from products often appear as externalities, outside the legal boundary of the producing company. These companies often possess the best competence to optimise the total life cycle environmental performance of its products. They are, however, neither obliged nor stimulated enough by policy incentives to do so from a sustainable development perspective. The policy instruments used today are mostly of a control-and-demand type, i.e. they do not create sufficient incentives to go further than hedging over set requirements. Environmental concerns and tightened environmental policy parameters have mostly been associated with the notion of additional costs and thus a restriction on economic performance. However, since the mid 1990s, several papers have called for corporate win–win situations as well as instruments giving up-stream incentives for change, but not enough abatement of environmental impacts has emerged in reality. Perhaps this is due to the lack of proper connection between economic theory on the one hand, and incentive advocating articles and instruments on the other. We propose a concept for trading of product life cycle (PLC) emission rights, based on property rights and transaction cost theories considering the problem with asymmetric information over the value chain. The initial financial impacts from such PLC instruments are shown to be significant for the system provider, since emissions—and resource use—become production costs. This provides economic incentives to take an increased responsibility for information flow as well as initiatives for product innovations.

Who is rating the raters

The growing interest in applying sustainability criteria to investment observed throughout the industrial world has resulted in the creation of numerous sustainability funds. The Dow Jones Sustaina ...

The efficiency of becoming eco‐efficient

The 1990s has been characterised by a rapid growth in corporate environmental management and analyses. Examines the environmental outcome and corporate economic benefits from this work in industry in general by using a dominant player in the telecommunications industry, Ericsson which also is prominent in its environmental work, as a case study from 1997 to 2002. Indicates a gap in the late 1990s between the needs of company units financing environmental studies and the research scope used by the environmental experts initiating the work. The environmentally motivated life‐cycle studies have not improved ongoing design projects towards eco‐efficient offerings. Corporate product units need time and cost‐effective procedures and guidelines to enable front‐end design. As a consequence, resources for life‐cycle assessments (LCAs) have decreased while materials declarations still goes on as a front‐end design instrument. Now LCA has evolved into a method for stakeholder communication of both life‐cycle environmental impacts for individual products as well as for the entire life cycle impacts of the whole product portfolio of the corporation. LCAs play a role in design projects, exclusively as a back‐end design tool, by having improved the design guidelines used.

Editorial: The contribution of sustainable investments to sustainable development

Financial markets play a pivotal role in our economy in that the allocation of resources through these markets determines, to a significant degree, the development of our society. The way we invest today has an effect on the way society will function and produce in the future. Even a small shift in the behaviour of the actors on the financial markets can have significant consequences on other sectors of society, ranging from company operations at the microlevel, to the trends and developments in the international economy at the macrolevel. Recent trends including globalisation, outsourcing, short-term financial gains and so forth have led some to question the ethics and sustainability of existing business models and practices.

ENVIRONMENTAL ACCOUNTING DIMENSIONS: PROS AND CONS OF TRAJECTORY CONVERGENCE AND INCREASED EFFICIENCY

Three dimensions of physically based environmental accounting are indicated — regional, company and product accounting — these have developed along different paths. In the globalised and highly specialised economy of today, company activities and their services are multinational and are to a decreasing degree to be seen as a subset of regions. Consequently, these accounting practices intersect each other, on three dimensions, from micro to macro levels. Even though they are all based on physical and energy input/output (I/O) analysis the differences in terminology, structure and evaluation methods make it difficult to exchange data and use them efficiently. This paper explores several aspects of these three environmental accounting dimensions such as the control engineering tradition, the lack of adequate data and the resource consuming work as well as incompatibility, overlapping scopes and aims. The conclusion is that the three accounting dimensions are similar in construction in spite of a development in independent paths. The differences are not primarily the three-letter acronyms of the tools but the objectives and control scope used in studies. If adopting a common framework and a global all-dimensional nomenmore sustainable.