CORPORATE ENVIRONMENTAL MANAGEMENT AND PUBLIC POLICY: BRIDGING THE GAP by

Environmental policies have brought dramatic improvements in air and water quality in the United States over the past 25 years, but further expansion of command-and-control regulations is likely to have diminishing marginal returns. Since the early 1990s corporations have taken new initiatives in managing their environmental impacts in ways that reduce their costs, increase their efficiency, lower their liabilities, and enhance their competitiveness while reducing pollution, conserving resources, and eliminating waste. Public policies have not kept pace with changes in environmental management in the private sector and are no longer the driving force for environmental improvements in many industries. In the future, significant gains in environmental quality are more likely to come from widespread adoption of pollution prevention practices than from more stringent regulation of end-of-pipe emissions. The inflexibility of national and state environmental regulations and their enormous costs for both governments and business will make them less effective in achieving higher levels of environmental quality in the 21" century. Bridging the gap between public policy and the trends in private sector management will require fundamental changes in federal and state governments' approaches to regulation. New policies must provide a holistic and integrated approach to environmental management that focuses on performance improvements rather than regulatory compliance, uses economic incentives to encourage clean manufacturing and the adoption of pollution prevention technologies and processes, and forges public-private partnerships for improving environmental quality. A sea change is occurring in the way American corporations deal with environmental management. Since the late 1980s an increasing number of American manufacturing corporations and multinational enterprises operating in the United States have adopted proactive environmental management systems. These policies not only commit firms to comply with environmental regulations but go well beyond compliance to seek ways of preventing pollution at the source rather than simply cleaning it up at the end of the pipeline. Although some firms still see regulatory compliance as a burden and attempt to minimize its costs, most large corporations and many smaller ones now see environmental protection as a necessary and integral part of total quality management. Many corporations integrate proactive environmental management practices into their overall business strategies in order to reduce costs, improve efficiency, compete more effectively, and develop new products and services (Berry and Rondinelli, 1998). Stringent environmental regulations have clearly contributed to dramatic improvements in environmental quality in the United States. Air pollution emissions dropped significantly during the 1980s and 1990s. Between 1988 and 1997 carbon monoxide emissions, for example, decreased by 25 percent, volatile organic compounds (VOCs) by 20 percent, sulfur dioxide by 12 percent, and lead by 44 percent (USEPA, 1998). These reductions in air pollution occurred during a period when the U.S. economy grew by 114 percent, vehicle miles traveled increased by 127 percent, and the national population expanded by 31 percent, in large part because corporations pursued imovative ways of reducing the adverse environmental impacts of their operations. For nearly two decades the National Stream Quality Accounting Network (NASQAN) has recorded continuous reductions in fecal coliform, dissolved solids, nitrate, suspended sediment, and total phosphorous. The open burning of garbage, a widespread practice