Volvo: Environmental Initiatives for What Reasons?

Abstract

Volvo’s position in the automotive market during a time of political transition gave it great incentive to advocate for recoverability standards. Although there is no “smoking gun” relationship between Volvo and the European Commission, the channels of contact and the similarity of Volvo’s voluntary recoverability initiative make it very likely that Volvo did have contact with the European Commission and influence the regulation that was eventually adopted. Volvo advocated for this legislation because it had already made an investment in environmental management in an effort to preempt regulation in Sweden. Another finding of this investigation was the alignment of interests between Swedish environmental groups and Volvo that occurred after Volvo made a fixed investment in environmental management. This may decrease the likelihood that a race to the bottom in terms of environmental standards will occur as a result of market integration, and bolsters evidence that higher environmental standards are often favored by multinational corporations in their global operations.