Journal Article

Green Clubs and Voluntary Governance: ISO 14001 and Firms' Regulatory Compliance

Prakash, Aseem, Potoski, Matthew

2005

Overview

Voluntary programs have become widespread tools for governments and nongovernmental actors looking to improve industry's environmental and regulatory performance. Voluntary programs can be conceptualized as club goods that provide nonrival but potentially excludable benefits to members. For firms, the value of joining a green club over taking the same actions unilaterally is to appropriate the club's positive brand reputation. Our analysis of about 3,700 U.S. facilities indicates that joining ISO 14001, an important nongovernmental voluntary program, improves facilities' compliance with government regulations. We conjecture that ISO 14001 is effective because its broad positive standing with external audiences provides a reputational benefit that helps induce facilities to take costly progressive environmental action they would not take unilaterally.

• Publisher: Blackwell Publishing, Inc,Blackwell Publishing,Blackwell Publishing Ltd
• Subject: Brands / Business reputation / Clubs / Commercial regulation / Compliance / Compliance certificates / Emissions regulations / Enterprises / Environmental auditing / Environmental Law / Environmental management systems / Environmental protection / Environmental regulation / Environmental regulations / Facilities / Governance / Government regulation / Industry / International Organizations / ISO standards / Non-governmental organizations / Nongovernmental Organizations / Pollutant emissions / Public Goods / Regulation / Regulation compliance audits / Standards organizations / U.S.A / Unilateralism / Voluntary / Voluntary organizations