The Industrial Green Game Implications for Environmental Design and Management (1997) / Chapter Skim
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Environmental Constraints and the Evolution of the Private Firm
Environmental Constraints and the Evolution of the Private Firm
Pages 101-114
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From page 101... ...
Environmental Constraints and the Evolution of the Private Firm BRADEN R ALLENBY Several trends and proposals reflecting rising global environmental concern implicitly suggest that private, for-profit firms1 in an environmentally constrained world are evolving away from profit-seeking behavior towards more socially comprehensive goals.2 It is not apparent, however, that the implications of such an evolution have been defined and considered.
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From page 102... ...
The antecedents of the corporation can be traced back to the medieval merchant guild systems or, more recently, to trading companies enjoying monopolies granted under royal charter, such as the British East India Company. However, the advent of the truly modern firm is tied to the development of general incorporation laws, under which any entity meeting statutorily defined criteria was able to incorporate, rather than requiring the special grants of privilege that had hitherto prevailed.
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From page 103... ...
Major drivers include the following: • The arguably fundamental conflict between uncontrolled growth as a goal of profit-driven private firms and an environmentally constrained world (Costanza, 1991; Daly and Cobb, 1989)
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From page 104... ...
argues that the evolution of environmentally appropriate technology must occur relatively rapidly or social, cultural, and economic systems may not be able to adapt gracefully to an environmentally constrained world. Generally, in free market economies, technology as a broad competency resides in corporations.
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From page 105... ...
The internalization of environmental externalities, through LCA and DFE practices, shows that firms are seeking greater social efficiency within existing economic constraints. Thus, for example, if a DFE analysis establishes that one polymeric system is environmentally preferable to another, and the costs are roughly equivalent, no economic penalty has been paid but social costs can be lowered.
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From page 106... ...
Manufacturing firms also do not usually manage the products after the consumer is through with them, nor do they manage the material streams that may result from the dismantling or recycling of postconsumer products. Conversely, firms providing raw materials for the economy seldom have a detailed idea of how their industrial customers are using, formulating, or disposing of excess material.
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From page 107... ...
For example, the CMA Product Stewardship Code includes a requirement that CMA members encourage distributors and direct product receivers to implement proper health, safety, and environmental practices, an indirect extension of the CMA member firm into the customer chain resulting directly from the desire to improve the life cycle impacts of the product (in this case, at the use stage)
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From page 108... ...
Emissions of listed materials have declined substantially, and reduced emissions and pollution prevention are now part of the technology choice process for many facilities. Significant in themselves, such regulatory requirements -- and their reflection in most of the industrial codes of behavior referenced above -- are a first step toward manufacturing becoming a collaborative effort among the firms involved, the suppliers and customers, the community in which manufacturing occurs, and the host culture (Graedel and Allenby, 1995)
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From page 109... ...
The credibility of private firms on environmental issues is minimal at best, and public trust is virtually nonexistent. How would firms be regulated over the transition period to assure that they were able to meet accountability standards demanded by political reality (and imposed by a public that is, for all intents and purposes, technologically and environmentally illiterate)
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From page 110... ...
Manufacturing as a collaborative effort, increased environmental responsibility within economic constraints, and new models of interfirm organization to implement life cycle programs and responsibilities are trends that imply but do not necessitate a broadening of the firm's mandate to include, for example, responsibility and authority for achieving sustainability. Moreover, maintaining the primacy of the profit motive in a sense maintains the natural selection pressures of the economy, which are arguably critical if rapid evolution within the system is sought.
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From page 111... ...
How can we get there as a practical matter, when most existing environmental regulation, at least in the United States, is predicated on precisely the opposite assumption -- the need for specific, mandated, central micromanagement of all behavior bearing on the environment? The details are daunting, but we may come under more stringent selective pressures than we expect or desire as environmental perturbations become manifest, which may result in far more rapid change than we anticipate.
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From page 112... ...
Addition ally, some interesting work is being done on the self organization of loosely linked groups of firms that form frequently successful and innovative industrial districts, such as Silicon Valley in the United States, or the collection of textile firms near Florence, Italy, known as "The Third Italy." This discussion, however, is limited to the class of agents identified as for-profit private corporations, primarily because any broader discussion would be far too complex for a short paper. Note that in any such analysis, only a limited class of agents is being considered and that these agents both modify and are modified by -- coevolve -- all other elements of the system.
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From page 113... ...
1993. Industrial ecology: The materials scientist in an environmentally constrained world.
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