Engaging in voluntary environmental action can be rewarding for firms

Strategies for a sustainable economy adopted by governments and international organisations are putting emphasis on voluntary environmental action in the private sector. The effectiveness of this approach in achieving environmental policy objectives depends to a large extent on the incentives for companies to engage in such voluntary action.

In their study, Dennis Kolcava, Joachim Scholderer and Thomas Bernauer,
examine political awards related to voluntary environmental action. They specifically focus on whether citizens are willing to support a favourable political environment for firms that engage in voluntary environmental action.

The results from a survey conducted with 6’726 citizens in Germany and the United States show that the better the environmental track record of a company and the more ambitious its commitment to voluntary environmental action, the higher public support for a favourable political environment. In other words, if firms engage in voluntary environmental action, citizens support rewarding firms with public procurement contracts, tax breaks and lenient regulatory enforcement.

This is positive news as the results highlight other incentives for voluntary corporate environmental action in the absence of well-understood incentives like resource efficiency gains and employer branding.