Bolstering Private Environmental Management

Abstract

A new approach to environmental policy advocated by state agencies and by the U.S. Environmental Protection Agency is to create tracks of environmental performance. The philosophy behind performance track programs is simple: distinguish strong environmental performers from weak ones and give strong firms special recognition and rewards such as enforcement forbearance and flexibility. The implementation of an environmental management system, or EMS, is one criterion agencies are using to determine which companies deserve special treatment. In this paper, the authors raise questions about whether the mere presence of an EMS is an appropriate metric for differentiating among firms. Policymakers should bear in mind that the EMS tool by itself is not necessarily sufficient for firms to create superior environmental improvement. Improvements may depend much more on how effectively and ambitiously an EMS is implemented, how well the organization is managed overall, and how committed the managers are to seeing that the firm achieves real and continuous improvement. These factors will always be harder for public agencies to assess. Reduced regulatory oversight may actually weaken the EMSs that firms implement, because incentives for using EMSs aggressively to achieve positive outcomes may be reduced. An agency mandate for broad EMS adoption might lead to a variety of responses from firms, including the adoption of systems with trivial environmental goals. Instead, policymakers should consider providing technical assistance to firms interested in EMS implementation and recognizing EMS firms with certificates of participation, product labeling, or government-sponsored publicity.