Another factor that should be promoted to encourage more voluntary initiatives is the increasing interest in Socially Responsible Investment (SRI). This is the fastest growing theme in finance, there are over a trillion dollars in SRI funds in the USA and Europe. Many funds are looking for companies with good PRO-ACTIVE enviro programs. But many - probably most - companies are unaware that improving their enviro performance can attract investors. It is important to educate companies about this, especially public ones which of course includes lots of small to medium manufacturers on the nasdaq and penny stock indexes. to attract the investors you need a competent enviro and social report, perhaps following the Global Reporting Initiative guidelines. Many fund and investment managers now recognize that good enviro performance is a sign of higher quality management.
Dow Jones has a Sustainability Index that identifies top companies and they license the index to investment funds
Vanguard Group, the largest index fund company, has a social index fund using the Calvert Groups index
there are over 150 funds I know of
Academic research shows that companies with better enviro performance that is recognized by investment managers have a stock price 1-3% higher than their competitors without that reputation. That can be worth a hell of a lot! Also research shows that enviro responsbile firms have lower betas or volatility in their stock prices so that is also interesting to investors.
Also, better enviro performance reduces risk, and bankers are starting to recognize this. Some banks offer better credit terms because of it, which is also worth a lot of money.
I recently gave a prestnation on this to a group of big mining companies, arguing that the reason they should be focused on P2 and sustainability management is to increase their market value by attracting SRI, and by reducing their cost of capital, as well as the basic efficiency benefits. They were very interested, none of them had thought about this approach, and all are asking for more informatoin and training.
Lead with the money, folks. But it is not saving money that is particularly interesting, it is higher market value and lower cost of capital.