Economic reforms as a necessary precondition for environmental improvements in transition countries

Abstract

The integration of environmental issues into business strategies and practice of corporations in developed countries today is a prerequisite for the achievement of profitable business. However, a proactive strategic approach to environmental issues is less applicable in developing countries and countries in transition. Such a situation is due to obvious weaknesses of the implementation of environmental regulations as well as to lower action of the civil society in terms of demand for 'green products'. The presence of a number of shortcomings, particularly in the area of institutional regulations, suggests that proactive environmental activities of foreign companies can support efforts towards environmental improvements in these countries. As a result, the analysis of the causes of applied corporate environmental strategies in transition countries is crucial in decision making process in the field of environmental protection. Conversely, the state environmental policy largely determines the character of corporate environmental strategy, as it creates space and climate for making key environmental decisions of enterprise. Having this in mind, the aim of this paper is to highlight the importance of economic reform for achieving desired environmental improvements, with special emphasis on environmental policy in countries in transition. In addition, the intention is to highlight the key factors that determine the character of corporate environmental strategies and their response to environmental problems.