Ecological modernization through servitization: EU regulatory support for sustainable product–service systems

Abstract

The objective of this article is to analyse, from a regulatory vantage point, the deliberations on whether (or to what extent) servitization of the European industry can contribute to ecological modernization, in which new technology and business models lead to reduced consumption of natural resources. The article examines how regulatory institutions, in particular at the European Union level, can encourage potentials of servitization business models for ecologically sustainable growth. The article finds that while there are a number of legally binding and soft law frameworks, mechanisms and initiatives related to sustainability, their impact upon servitized European industry remains to be fully discovered. In the future, it will be important to move from incentives for resource efficiency and recycling towards mandatory standards, considering that currently several aspects of the servitization business trend are not bound by mandatory standards for assuring a green and sustainable industry. The challenge facing Europe will be the ability of Member States to agree on environmental standards and not to use them as a basis for regulatory competition.