Global Standards and the Environmental Performance of Industry

Abstract

This chapter draws together the evidence of the last three chapters to consider the emergence of global standards as a driver of improvements in the environmental performance of industry. Our particular focus is the growing importance of firm-based global environmental standards as an alternative to the more widely recognized state-centered approaches to setting and implementing environmental standards. Increasing numbers of multinational firms (MNCs) are adopting uniform approaches to environmental management across all of their facilities worldwide, including in some cases process and performance-based environmental standards. Such intra-firm standards have even broader reach when they are also applied to the suppliers of the MNCs as part of standardized supply chain management. In this chapter we examine the rationale behind the adoption of firm-based approaches to global environmental standards, and whether such firm-based approaches add value to traditional state-centered environmental regulation and governance. Why are firm-based global standards being adopted by MNCs, and do these standards constitute a novel and effective approach to improving the environmental performance of industry? The chapter addresses the issue of global standards and the environment from the perspective of recent research within economic geography on issues of economic globalization. We take this starting point precisely because much of the recent interest in global environmental standards among politicians and policy makers is a reaction to economic globalization and to the likely environmental and social consequences of intensified flows of capital, technology, and information on a global scale. The growing force of neoliberal trade and investment regimes, and the rapid growth in foreign direct investment and international trade within the world economy, has led many to call for a new global governance of economic processes that will ensure more positive development outcomes (Rodrik et al. 2002; UNDP 2003). What Rodrik and others have in mind in this regard is some combination of supra-national institutional capability and strengthened state-based regulation to match the growing global reach of MNCs.