Theoretical Aspects of Environmental Strategy

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AbstractThe environmental strategy is a plan of action on how the organisation should manage environmental protection, stakeholder pressures, and market opportunities. A coherent set of measures, investments, and projects will reduce the industrial impact on the natural environment and will generate competitive advantages from eco-friendly products and services. Corporate environmental strategy is also an organisational capability, in the sense that it integrates and uses a set of resources (such as technology, knowledge, expertise, stakeholder feedback, and external certifications) to attain a specific goal. Managerial decisions in areas such as green product design, supply chain management, eco-branding, environmental disclosure, and product life cycle stewardship are part of a proactive posture which generates competitive and reputational benefits. A firm is perceived as environmentally responsible if it implements coherent environmental actions with definite results. Corporate environmental performance is the measure of a company’s impact on the natural environment. It entails operational aspects such as resource consumption, pollution, waste generation, energy use, and the contribution to climate change. These effects should be assessed across the entire supply chain and through the life cycle of the company’s products and services. The environmental performance also has a strategic dimension which refers to the environmental policies and objectives that ought to be translated into managerial structures, production processes, and monitoring procedures. The corporate environmental strategy emerges from a mix of objectives and capabilities such as compliance, communication, transformation, eco-efficiency, differentiation, and cost leadership. Any company can choose a proportion of each element, corresponding to its current corporate needs. Also, this configuration is subject to change, depending on the goals set by the directors and shareholders. Environmental entrepreneurship integrates proactive environmental strategies to obtain a competitive advantage and to correct various market failures. Innovative technologies not only advance natural resource conservation but can also reduce externalities through cleaner production. In their search for alternative and eco-friendly solutions, environmental entrepreneurs can support the dissolution of monopolies, especially in dirty industries.