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Competitiveness Implications of Environmental Regulations: Case Studies (1992- 1997)

Paper Number: EE-0045, EE-0214A-L, EE-0229B

Document Date: 01/01/1992 to 01/01/1997

Author(s): Management Institute for Environment and Business, A Program of the World Resources Institute

Subject Area(s):  Economic Analysis, Economic Impacts, Cost Analysis, Competitiveness

Keywords: Economic Analysis, Economic Impacts, Cost Analysis, Competitiveness

Abstract: 

This collection of reports is part of a series of case studies designed to examine Michael Porter’s hypothesis that innovative companies responding to environmental regulation can create competitive advantage through lower costs or higher sales.

In 1993, the authors conducted studies of six global industries to understand how environmental regulation was influencing competition.  In 1994 and 1995 they conducted five additional industry studies, as well as three individual company studies. These studies complemented five earlier company studies looking at the competitive opportunities of ‘beyond compliance’ investments. Finally, in 1996 they conducted financial assessments of two industries and an additional company to look at the financial and stock market impact of environmental performance. All this work has focused more or less on the relationship between business performance and environmental stewardship. 

This work reveals highly varied outcomes. The authors found ample indication that environmental pressures can increase or decrease the value of a business, and often have no material impact on value. In many cases business outcomes are negative; environment adds cost, forces unproductive investment, closes markets, or eliminates technology options. However, in many instances the results are very positive; environmental pressure forces management attention to environmental issues and results in reduced cost, superior product performance, new markets, and more robust business health.

The series consists of the following individual publications:

  • BMW: A Proactive Approach to Vehicle Recycling, part of Field Study Series on Environment and Industrial Competitiveness (1992)
  • Alternative Fuels and US Automobile Manufacturers, part of Field Study Series on Environment and Industrial Competitiveness (1992)
  • Competitive Implications of Environmental Regulation: A Study of Six Industries  (1994) The six industries studied were paint and coatings, pulp and paper, computers and electronic components, refrigerators, batteries and printing inks.
  • Competitive Implications of Environmental Regulation in the Polyvinyl Chloride (PVC) Industry (1996)
  • Competitive Implications of Environmental Regulation in the Metal Finishing Industry (1996)
  • Competitive Implications of Environmental Regulation: A Case Study on Carolina Power and Light (CPL) (1996)
  • Competitive Implications of Environmental Regulation in the Electric Utility Industry (1996)
  • Competitive Implications of Environmental Regulation: A Case Study on Dow Chemical Company and 1,1,1 (1996)
  • Competitive Implications of Environmental Regulation in the Laundry Detergent Industry (1996)
  • Competitive Implications of Environmental Regulation in the Recovered Paper Industry (1996)
  • Competitive Implications of Environmental Regulation: A Case Study on IKEA (1996)
  • The Financial Impact of Environmental Events and Issues on the Forest Products Industry (1997)
  • The Financial Impact of Environmental Events and Issues on the Property and Casualty Insurance Industry (1997 not available).
  • Environmental Performance and Strategy at Weyerhaeuser (1997)
  • Competitiveness Project Summary (1997)

This paper is part of the  Environmental Economics Research Inventory.

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