Evolutionary governance choice for corporate social responsibility: a forestry campaign case in South Korea

Firms select different governance types (e.g. internalisation, outsourcing or collaboration) for corporate social responsibility (CSR) activities. This paper examined how the choice of CSR governance type is influenced by social factors and organisational experiences and how changes in these factors affect the governance choice. These questions are especially meaningful in the context of developing countries with weak institutional environments and recent social change. With the unique phenomenon that is not readily explainable in terms of the extant theoretical groundwork on CSR governance choice, a case study of a South Korean forestry campaign by Yuhan-Kimberly was analysed. It was found that social circumstances triggered Yuhan-Kimberly's initiation of forestry projects, but the absence of social infrastructure limited the choice of governance type early on. Lack of experience also constrained the governance choice. Over time, environmental change and the accumulation of organisational knowledge caused the choice of governance to evolve. This study contributes to the CSR governance choice literature by exploring social and organisational determinants other than economic efficiency and by applying a dynamic perspective.     

Voluntary corporate environmental initiatives and shareholder wealth

Researchers debate whether environmental investments reduce firm value or actually improve financial performance. We provide some compelling evidence on shareholder wealth effects of membership in voluntary environmental programs (VEPs). Companies announcing membership in EPA's Climate Leaders, a program targeting reductions in greenhouse gas emissions, experience significantly negative abnormal stock returns. The price decline is larger in firms with poor corporate governance structures, and for high market-to-book (i.e., high growth) firms. However, firms joining Ceres, a program involving more general environmental commitments, have insignificant announcement returns, as do portfolios of industry rivals. Overall, corporate commitments to reduce greenhouse gas emissions appear to conflict with firm value maximization. This has important implications for policies that rely on voluntary initiatives to address climate change. Further, we find that firms facing climate-related shareholder resolutions or firms with weak corporate governance standards – giving managers the discretion to make such voluntary environmentally responsible investment decisions – are more likely to join Climate Leaders; decisions that may result in lower firm value.     

Voluntary corporate environmental initiatives and shareholder wealth

Researchers debate whether environmental investments reduce firm value or actually improve financial performance. We provide some compelling evidence on shareholder wealth effects of membership in voluntary environmental programs (VEPs). Companies announcing membership in EPA's Climate Leaders, a program targeting reductions in greenhouse gas emissions, experience significantly negative abnormal stock returns. The price decline is larger in firms with poor corporate governance structures, and for high market-to-book (i.e., high growth) firms. However, firms joining Ceres, a program involving more general environmental commitments, have insignificant announcement returns, as do portfolios of industry rivals. Overall, corporate commitments to reduce greenhouse gas emissions appear to conflict with firm value maximization. This has important implications for policies that rely on voluntary initiatives to address climate change. Further, we find that firms facing climate-related shareholder resolutions or firms with weak corporate governance standards – giving managers the discretion to make such voluntary environmentally responsible investment decisions – are more likely to join Climate Leaders; decisions that may result in lower firm value.     

The real effect of legal institutions: Environmental courts and firm environmental protection expenditure

This paper evaluates the real effects of environmental justice reform on environmental governance at the firm level. Using the establishment of environmental courts in China as a quasi-natural experiment, our difference-in-differences estimation shows that: (1) environmental courts significantly enhance environmental investment by firms, and this relationship is robust to different specifications and alternative measures; (2) three possible channels are the improved levels of justice and enforcement of environmental protection, and the mitigation of local government intervention; (3) our findings are particularly pronounced in subsamples with severe local protectionism, state-owned enterprises (SOEs), and non-SOEs with political connections; (4) at the city-level, environmental courts significantly increase air quality and promote cities to cross the inflection point of the environmental Kuznets curve earlier. Overall, this paper reveals the micro-mechanisms behind the real effects of environmental justice on firm environmental investment, thus providing timely implications for regulators concerned with environmental protection.     

REDD+ and forest tenure security: concerns in Nepal’s community forestry

As one of the dominant large-scale mechanisms proposed to combat climate change, biodiversity loss, and rural poverty, REDD+ (Reducing Emissions from Deforestation and Forest Degradation) has added further complexity to the challenging governance of rights and resources in global forests. As REDD+ is commodifying carbon, concerns emerge about how carbon ownership and its rights can be accommodated into the existing framework that governs local forest resource rights. The Nepalese government has formally entered into REDD+ policy preparations, but it lacks clear legal provisions regarding key forest tenure rights such as carbon ownership, benefit sharing, and the political participation of community forest user groups from national to local. As a result, Nepal’s policy process points toward performance-based carbon forestry in a way that may undermine and weaken existing community tenure rights and forest tenure security.

This paper discusses Nepal’s potential impacts of new REDD+ and carbon ownership arrangements on forest tenure security and community-based forest governance. In a threefold methodological approach, the paper presents three scenarios for a REDD+-oriented tenure reform within the existing framework and assesses their concerns through in-depth qualitative interviews with key stakeholders, representatives, and advocates of Nepal’s community forestry system, complemented by a review of government documents and academic literature of REDD+ lessons so far. The analysis identifies critical concerns for forest tenure security, state-community power relationships, and effective local institutions of the commons, and suggests that Nepal’s REDD+ process is taking place at a particularly consequential time for structural changes of the forest governance framework.     

Controversial sectors in banks’ sustainability reporting

Albeit indirectly, through its lending and investing, the financial sector can contribute substantially to achieve sustainable development. One of such practices concerns investment on or financing of entities that deal with environmentally or socially sensitive transactions (gambling, tobacco, alcohol, arms, etc.). Although there is a wealth of literature on banks’ CSR and its reporting, one can count on the fingers of one hand the studies mentioning explicitly these issue. What is more, this CSR practice gets treated only cursorily in these few studies. This study focuses on the communication of information on investment and financing of firms from controversial sectors in banks’ sustainability reports. We begin by examining whether financial institutions in our sample report having such policies or not. Then, we investigate what kind of policies are reported. In addition, this study seeks to capture the influence of national culture and firm-specific characteristics (type of property, listing status and multinationality) on the reporting of such issues. Ordinal regression analysis is used to analyse the relation of these factors with such reporting. Our findings suggest that the disclosure of information on policies regarding investment on and financing of firms from controversial sectors is not widespread, and the organizations reporting policies of total exclusion of some sectors or projects on ethical grounds are few. This study may encourage more detailed analyses of the type of CSR policies examined and of their impacts. It also may be of utility to banks by raising awareness about the need to consider these issues.     

The understanding and role of uncertainty and risk in climate change adaptation: local and central authorities in Norway

A common claim is that emerging and future climate change is rendering traditional conceptions of uncertainty and risk obsolete. This is because a changing climate makes it quite a challenge to calculate uncertainties, establishing the measurable uncertainty as the basis for quantifying risk. Approaches that are capable of accommodating and possibly countering the wickedness caused by increasing uncertainty are necessary, the argument holds. Following up on previous studies of learning–knowledge and adapting to a changing climate, this article provides an analysis of how differences in the understanding of uncertainty and risk inform and determine governmental adaptation policies and actions of the local and central government in Norway, also discussing governance implications. The study finds that the understanding of uncertainty and risk generally is poor at the local level, but better at the state level, especially among highly educated staff with a background in, for example, natural sciences and engineering. On the other hand, a traditional understanding of uncertainty and risk is dominating: seeking to establish measurable uncertainty as a basis for quantifying risk. The article discusses combining different approaches of uncertainty and risk, thereby introducing a broader basis for governance, also implying multi-level network governance. On the one hand, this may help the local–central government in handling wicked problems of adapting to a changing climate but on other hand, it also possibly nurture struggles between different knowledge bases and stakeholder interest, thereby fuelling the wickedness of adaptation policies.     

Measuring sustainable governance in the European Union

This paper examines the problem of measuring sustainable governance in the European Union (EU-27) through the use of duality and the Slutsky equation. The proposed methodology is based on the application of a three-dimensional optimisation model, where the arguments of the objective (sustainable social welfare) function are economic goods that contribute to sustainable economic growth; environmental goods that provide for sustainable environmental protection; and social goods through which sustainable social development is achieved. The dual problem, formulated through this three-dimensional theoretical model, is solved to find the optimal solution, indicating a certain sustainability level. We suggest that this solution can be used for calculating the value of what we define here as the sustainable governmental policy indicator, which is considered to provide quantitative measurement of government policies on sustainable development within the context of ‘good governance’. Furthermore, it is suggested that the Slutsky equation can be used as a reliable method for long-term monitoring and planning of national as well as international good governance with regard to sustainable development policies. In its empirical part, the paper applies the theoretical model in an analysis of the sustainable development indicators (as set out in the Sustainable Development Strategy (SDS) of the EU) in Bulgaria for the period 2000–2010 and compares them to those of the EU-27.     

Corporate governance and green innovation

We study the relationship between corporate governance and firms׳ environmental innovation. Exploiting changes in antitakeover legislation in the US, we show that worse governed firms generate fewer green patents relative to all their innovations. This negative effect is greater for firms with a smaller share of institutional ownership, with a smaller stock of green patents, and with more binding financial constraints. Investigating regulatory and industry variations, we also find more pronounced effects for firms operating in states with lower pollution abatement costs, and in sectors less dependent on energy inputs. Overall, our results suggest that ineffective corporate governance may constitute a major obstacle to environmental efficiency.     

Variation in groundwater composition and decalcification depth in a dune slack: effects on basiphilous vegetation

Basiphilous, open, species-rich vegetation types of young dune slacks have declined throughout Europe in recent years, and have largely been replaced by often acidophilous, tall marsh and scrub vegetation. This succession appears to be accelerated by a decrease in the discharge of calcareous groundwater from sandy ridges or small dune hummocks. The present study deals with spatial and temporal variation in the chemical composition of the groundwater in the upper metres of the soil of a degraded dune slack complex on the Dutch barrier island of Schiermonnikoog, with emphasis on (1) groundwater composition, (2) water level and (3) decalcification patterns. The main aim was to assess perspectives for restoring basiphilous vegetation types which had been abundant in this slack from 1954 to 1977. The depth of decalcification was related to former hydrological conditions along a transect of 200 m. Acidifying effects of rainfall were reflected in the chemical composition of the groundwater below small dune hummocks within the slack. Distinct precipitation water lenses, poor in dissolved ions, were formed under the dune hummocks during a wet period. This microtopography did not contribute to the discharge of calcareous groundwater to lowlying parts of the slack. Here, groundwater showed decreasing concentrations of the dissolved ions after a rain shower. Except for the peripheral sections of the slack—where upward seepage of groundwater (exfiltration)still occurs—infiltration conditions are now dominant in the slack. The consequences of the present hydrological conditions for restoration are briefly discussed.     

Investment in cleaner technology and signaling distortions in a market with green consumers

I analyze the pricing and investment behavior of a firm that signals the environmental attributes of its production technology through its price to uninformed environmentally conscious consumers. I then analyze the effect of change in environmental regulation on the signaling outcome and the firm's ex ante incentive to invest in cleaner technology. When regulation is weak, a firm signals cleaner technology through higher price; in this case, the firm earns lower profit when it has cleaner technology and thus, has no incentive to invest in cleaner technology. The price charged by the clean firm declines sharply beyond a critical level of regulation. When regulation is sufficiently stringent, the firm with cleaner technology charges lower price but earns higher signaling profit, and ex ante the firm has positive incentive to invest in cleaner technology. With weak regulation, the incentive of the firm to directly disclose its environmental performance rather than signal it through price is increasing in the level of regulation; the opposite holds when regulation is sufficiently stringent.     

Investment in cleaner technology and signaling distortions in a market with green consumers

I analyze the pricing and investment behavior of a firm that signals the environmental attributes of its production technology through its price to uninformed environmentally conscious consumers. I then analyze the effect of change in environmental regulation on the signaling outcome and the firm's ex ante incentive to invest in cleaner technology. When regulation is weak, a firm signals cleaner technology through higher price; in this case, the firm earns lower profit when it has cleaner technology and thus, has no incentive to invest in cleaner technology. The price charged by the clean firm declines sharply beyond a critical level of regulation. When regulation is sufficiently stringent, the firm with cleaner technology charges lower price but earns higher signaling profit, and ex ante the firm has positive incentive to invest in cleaner technology. With weak regulation, the incentive of the firm to directly disclose its environmental performance rather than signal it through price is increasing in the level of regulation; the opposite holds when regulation is sufficiently stringent.     

Common property resources in drylands of India

Common property resources are areas of land or water being used by a community or a group of communities. These have special significance to peoples and communities who depend on them for their livelihood. The commons in all arid districts of India include village pastures, community forests, wasteland, common threshing grounds, waste dumps, watershed drainage, village baoris¹, talabs², nadis³ and ponds, and tanks, rivers, rivulets, wetlands, riverbeds, community conserved areas, protected areas, Dhaam⁴ or Dhooni⁵, culturable wastelands, barren & un-culturable land, etc. The area under commons often ranged from 9 to 28% of total village area. Appropriation of the commons by the state for building essential infrastructure such as schools, clinics, veterinary hospitals, housing for government functionaries, SEZ and industrial corridors, etc. is a cause of serious concern. Presently the ownership rights over CPRs are not clear and there are many who claim ownership, some at State level but also like local bodies. The 12^th plan of the Planning Commission of India recognized and highlighted the need for favourable land tenure arrangements, institutional design and programme architecture in order to achieve effective governance and management of the commons. The revitalization of CPRs is crucial for protecting livelihoods, as well as for biodiversity conservation and for the improvement in arid microclimatic conditions. Dialogue continues on the status of common property resources, the available legal framework and some policy related issues for its conservation through strengthening of local institutions and capacity building for stakeholders.     

Is ISO 14001 a gateway to more advanced voluntary action? The case of green supply chain management

Using Japanese facility-level data, we estimate the effects of ISO 14001 certification on the promotion of more advanced practices, namely green supply chain management (GSCM). Our results show that ISO 14001 promotes GSCM practices. Facilities with environmental management systems (EMS) certified to ISO 14001 are 40% more likely to assess their suppliers' environmental performance and 50% more likely to require that their suppliers undertake specific environmental practices. Further, government programs that encourage voluntary EMS adoption indirectly promote GSCM practices. These programs increase the probabilities that facilities will assess their suppliers' environmental performance and require suppliers to undertake specific environmental practices by 7% and 8%, respectively. Combined, these findings suggest that there may be significant but previously unnoticed spillover effects of ISO 14001 and government promotion of voluntary action.     

Spillover effect of environmental investment: evidence from panel data at provincial level in China

This paper considers pollution density as a function of environmental investment. The higher environmental investment, the lower pollution density. The lower the pollution density is the higher production technology becomes. This is called the spillover effect. We collected China's panel data at the provincial level from 2005 to 2009, and tested the spillover effect of environmental investment. This paper finds that the environmental investment influenced production technology positively. There is a significant positive relation between government expenditure and spillover effect.     

Do voluntary pollution reduction programs (VPRs) spur or deter environmental innovation? Evidence from 33/50

We study whether a government-sponsored voluntary pollution reduction program (VPR) promotes or deters the development of new environmental technologies that yield future emission reduction benefits. Using a panel of 127 U.S. manufacturing industries defined by 3-digit SIC classifications over the 1989–2004 period, we estimate impacts of industry-level participation in the 33/50 program, a VPR initiated by government regulators in 1991, on industry-level rates of environmental patenting. We find that higher rates of 33/50 program participation are associated with significant reductions in the number of successful environmental patent applications five to nine years after the program ended.     

Effectiveness of Voluntary Conservation Agreements: Case Study of Endangered Whales and Commercial Whale Watching

Abstract: The use of voluntary approaches to achieve conservation goals is becoming increasingly popular. Nevertheless, few researchers have quantitatively evaluated their efficacy. In 1998 industry, government agencies, and nongovernmental organizations established a voluntary conservation program for whale watching in the northeast region of the United States, with the intent to avoid collisions with and harassment of endangered whales by commercial and recreational whale‐watching vessels. One important aspect of the program was the establishment of 3 speed zones within specific distances of whales. We wanted to determine the level of compliance with this aspect of the program to gauge its efficacy and gain insights into the effectiveness of voluntary measures as a conservation tool. Inconspicuous observers accompanied 46 commercial whale‐watching trips from 12 companies in 2003 (n= 35) and 2004 (n= 11). During each trip, vessel position and speed were collected at 5‐second intervals with a GPS receiver. Binoculars with internal laser rangefinders and digital compasses were used to record range and bearing to sighted whales. We mapped whale locations with ArcGIS. We created speed‐zone buffers around sighted whales and overlaid them with vessel‐track and speed data to evaluate compliance. Speeds in excess of those recommended by the program were considered noncompliant. We judged the magnitude of noncompliance by comparing a vessel's maximum speed within a zone to its maximum recorded trip speed. The level of noncompliance was high (mean 0.78; company range 0.74–0.88), some companies were more compliant than others (p= 0.02), noncompliance was significantly higher in zones farther from whales (p < 0.001), and operators approached the maximum speed capabilities of their vessel in all zones. The voluntary conservation program did not achieve the goal of substantially limiting vessel speed near whales. Our results support the need for conservation programs to have quantifiable metrics and frequent evaluation to ensure efficacy.     

Irrigation projects in Ethiopia: what can be done to enhance effectiveness under ‘challenging contexts’?

Investment in small scale irrigation (SSI) is crucial to sustain food security and livelihoods of smallholders. In Ethiopia, the government and development partners show a growing interest in developing irrigation projects. The success of irrigation projects is determined by governance and socio-cultural contexts. Yet the lack of thorough understanding of the challenging contexts undermines the efforts to achieve sustainability outcomes in irrigation projects. This article identifies the challenging contexts to irrigation projects, examines how the challenging contexts influence the effectiveness of irrigation projects, and indicates ways of improving the effectiveness of irrigation projects under the existing challenging contexts. Data were collected between April and December 2011 in three regional states of Ethiopia using in-depth interviews and focus group discussions. The lack of governance capacity and accountability are critical challenges for the sustainability of the irrigation projects. In addition, the poor consideration of local knowledge and the use of top-down approaches in planning and implementing the irrigation projects, and lack of equitable access to the irrigation schemes result in poor ownership of projects among farmers. Improving the funding scheme to support long-term capacity building at national and local levels, and in understanding the socio-cultural contexts of the intervention areas; planning irrigation projects with due consideration of the existing challenging contexts, and with active engagement of the local community, are important for the long-term viability and sustainability of irrigation projects.     

Effects of Private‐Land Use,Livestock Management,and Human Tolerance on Diversity,Distribution, and Abundance of Large African Mammals

Successful conservation of large terrestrial mammals (wildlife) on private lands requires that landowners be empowered to manage wildlife so that benefits outweigh the costs. Laikipia County, Kenya, is predominantly unfenced, and the land uses in the area allow wide‐ranging wildlife to move freely between different management systems on private land. We used camera traps to sample large mammals associated with 4 different management systems (rhinoceros sanctuaries, no livestock; conservancies, intermediate stocking level; fenced ranches, high stocking level; and group ranches, high stocking level, no fencing, pastoralist clan ownership) to examine whether management and stocking levels affect wildlife. We deployed cameras at 522 locations across 8 properties from January 2008 through October 2010 and used the photographs taken during this period to estimate richness, occupancy, and relative abundance of species. Species richness was highest in conservancies and sanctuaries and lowest on fenced and group ranches. Occupancy estimates were, on average, 2 and 5 times higher in sanctuaries and conservancies as on fenced and group ranches, respectively. Nineteen species on fenced ranches and 25 species on group ranches were considered uncommon (occupancy < 0.1). The relative abundance of most species was highest or second highest in sanctuaries and conservancies. Lack of rights to manage and utilize wildlife and uncertain land tenure dampen many owners’ incentives to tolerate wildlife. We suggest national conservation strategies consider landscape‐level approaches to land‐use planning that aim to increase conserved areas by providing landowners with incentives to tolerate wildlife. Possible incentives include improving access to ecotourism benefits, forging agreements to maintain wildlife habitat and corridors, resolving land‐ownership conflicts, restoring degraded rangelands, expanding opportunities for grazing leases, and allowing direct benefits to landowners through wildlife harvesting. Efectos del Uso Privado de Suelo, Manejo de Ganado y la Tolerancia Humana sobre la Diversidad, Distribución y Abundancia de Mamíferos Mayores Africanos     

Simulating forest structure, timber production, and socioeconomic effects in a multi-owner province.

Protecting biodiversity has become a major goal in managing coastal forests in the Pacific Northwest--an area in which human activities have had a significant influence on landscape change. A complex pattern of public and private forest ownership, combined with new regulations for each owner group, raises questions about how well and how efficiently these policies achieve their biodiversity goals. To develop a deeper understanding of the aggregate effect of forest policies, we simulated forest structures, timber production, and socioeconomic conditions over time for the mixture of private and public lands in the 2.3-million-ha Coast Range Physiographic Province of Oregon. To make these projections, we recognized both vegetative complexity at the stand level and spatial complexity at the landscape level. We focused on the two major factors influencing landscape change in the forests of the Coast Range: (1) land use, especially development for houses and cities, and (2) forest management, especially clearcutting. Our simulations of current policy suggest major changes in land use on the margins of the Coast Range, a divergence in forest structure among the different owners, an increase in old-growth forests, and a continuing loss of the structural elements associated with diverse young forests. Our simulations also suggest that current harvest levels can be approximately maintained, with the harvest coming almost entirely from private lands. A policy alternative that retained live trees for wildlife would increase remnant structures but at a cost to landowners (5-7% reduction in timber production). Another alternative that precluded thinning of plantations on federal land would significantly reduce the area of very large diameter (>75 cm dbh) conifer forests 100 years into the future