Assessing the relationship between economic and ecological performance: Distinguishing system levels and the role of innovation

In this article we critically discuss the different perspectives that are currently in use for assessing the relationship between ecological and economic performance. Based on a review of the literature we propose that research up till now has made use of four distinct system boundaries: the firm, markets, production and consumption systems, and economic systems. Making these boundaries explicit is helpful in interpreting the mixed results that have been obtained. We describe the consequences of the choice for each of these system boundaries: and look at implications for innovation. We also argue that the production and consumption system boundary offers potential for further advances in the field and deserves more attention in future research.

[1]  S. Hart.  A Natural-Resource-Based View of the Firm , 1995 .

[2]  Jonathan Köhler,et al.  International Competitiveness and Environmental Policies , 1998 .

[3]  P. Stewart.  Complexity Theories, Social Theory, and the Question of Social Complexity , 2001 .

[4]  M. Starik,et al.  Weaving An Integrated Web: Multilevel and Multisystem Perspectives of Ecologically Sustainable Organizations , 1995 .

[5]  Laura T. Raynolds.  Consumer/Producer Links in Fair Trade Coffee Networks , 2002 .

[6]  J. March,et al.  A Behavioral Theory of the Firm , 1964 .

[7]  Andreas R. Ziegler,et al.  The influence of different characteristics of the EU environmental management and auditing scheme on technical environmental innovations and economic performance , 2006 .

[8]  N. Georgescu-Roegen.  The Entropy Law and the Economic Process , 1973 .

[9]  Stefan Schaltegger,et al.  Contemporary Environmental Accounting , 2000 .

[10]  R. Clift,et al.  Relationships Between Environmental Impacts and Added Value Along the Supply Chain , 2000 .

[11]  G. Gereffi,et al.  The governance of global value chains , 2005 .

[12]  B. Latour.  Science in action : how to follow scientists and engineers through society , 1989 .

[13]  Juan-Pablo Montero,et al.  Permits, Standards and Technology Innovation , 2002 .

[14]  Adam C. Faruk,et al.  Analyzing, Mapping, and Managing Environmental Impacts along Supply Chains , 2001 .

[15]  Jochen Markard,et al.  Innovation processes in large technical systems: Market liberalization as a driver for radical change? , 2006 .

[16]  Duane Chapman,et al.  Economic growth, trade and energy: implications for the environmental Kuznets curve , 1998 .

[17]  J. D. Margolis,et al.  Misery Loves Companies: Rethinking Social Initiatives by Business , 2003 .

[18]  Kazem Chaharbaghi,et al.  Defining Competitiveness: A Holistic Approach , 1994 .

[19]  E. Hertwich.  Consumption and the Rebound Effect: An Industrial Ecology Perspective , 2005 .

[20]  R. Clift,et al.  Where's the Profit in lndustrial Ecology? , 1998 .

[21]  David N. Pellow,et al.  Interrogating the Treadmill of Production , 2004 .

[22]  Chris Park,et al.  The Environment , 2010 .

[23]  P. Bansal.  Evolving sustainably: a longitudinal study of corporate sustainable development , 2005 .

[24]  M. V. Asselt,et al.  More evolution than revolution: transition management in public policy , 2001 .

[25]  M. Russo,et al.  A Resource-Based Perspective On Corporate Environmental Performance And Profitability , 1997 .

[26]  J. D. Margolis,et al.  People and profits? : the search for a link between a company's social and financial performance , 2001 .

[27]  Sanjay Sharma,et al.  Proactive corporate environmental strategy and the development of competitively valuable organizational capabilities , 1998 .

[28]  Garry D. Peterson.  Political ecology and ecological resilience: , 2000 .

[29]  Peter Pauly,et al.  The determinants of atmospheric SO2 concentrations: reconsidering the environmental Kuznets curve , 1998 .

[30]  N. Johnstone.  Environmental Policy and Corporate Behaviour , 2007 .

[31]  Petra Christmann.  Effects of “Best Practices” of Environmental Management on Cost Advantage: The Role of Complementary Assets , 2000 .

[32]  R. Kaufmann,et al.  Is there a turning point in the relationship between income and energy use and/or carbon emissions? , 2006 .

[33]  Friedrich Schmidt-Bleek,et al.  Wieviel Umwelt braucht der Mensch? : MIPS-das Maß für ökologisches Wirtschaften , 1994 .

[34]  Jonathon E. Mote,et al.  The laws of the markets , 2000 .

[35]  J. D. Margolis,et al.  Social Issues and Management: Our Lost Cause Found , 2003 .

[36]  Matthias Weber,et al.  Towards Environmental Innovation Systems , 2005 .

[37]  Stefan Seuring,et al.  From a literature review to a conceptual framework for sustainable supply chain management , 2008 .

[38]  N. Shafik.  Economic Development and Environmental Quality: An Econometric Analysis , 1994 .

[39]  F. Schmidt,et al.  Corporate Social and Financial Performance: A Meta-Analysis , 2003 .

[40]  Edward J. Zajac,et al.  The Social Construction of Market Value: Institutionalization and Learning Perspectives on Stock Market Reactions , 2004 .

[41]  Martin Jänicke,et al.  Ecological modernisation: new perspectives , 2008 .

[42]  Arnold Tukker,et al.  Identifying Priorities for Environmental Product Policy , 2006 .

[43]  M. Porter,et al.  Industrial Ecology and Competitiveness , 1998 .

[44]  N. Georgescu-Roegen.  The Entropy Law and the Economic Process in Retrospect , 1986 .

[45]  Stefan Schaltegger,et al.  The link between 'green' and economic success: environmental management as the crucial trigger between environmental and economic performance. , 2002, Journal of environmental management.

[46]  Andreas R. Ziegler,et al.  Integrated Product Policy and Environmental Product Innovations: An Empirical Analysis , 2007 .

[47]  A. Jaffe,et al.  Environmental Policy and Technological Change , 2002 .

[48]  M. Porter,et al.  Toward a New Conception of the Environment-Competitiveness Relationship , 1995 .

[49]  H. Landis Gabel,et al.  Managerial Incentives and Environmental Compliance , 1993 .

[50]  Arnulf Grubler,et al.  Technology and the environment: An overview , 1996 .

[51]  Gene Bazan.  Our Ecological Footprint: Reducing Human Impact on the Earth , 1997 .

[52]  T. Selden,et al.  Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions? , 1994 .

[53]  Henk Folmer,et al.  The International Yearbook of Environmental and Resource Economics 1998/1999: A Survey of Current Issues , 1999 .

[54]  Roland Clift,et al.  The Relative Importance of Transport in Determining an Appropriate Sustainability Strategy for Food Sourcing A Case Study of Fresh Produce Supply Chains , 2007 .

[55]  Louis Lebel,et al.  Enabling Sustainable Production-Consumption Systems , 2008 .

[56]  Arnold Tukker,et al.  Environmental Impacts of Products: A Detailed Review of Studies , 2006 .

[57]  Roland Clift,et al.  Metrics for supply chain sustainability , 2003 .

[58]  Cees Withagen,et al.  Environmental Regulation and Competitiveness , 2001 .

[59]  J. Randers,et al.  Tracking the ecological overshoot of the human economy , 2002, Proceedings of the National Academy of Sciences of the United States of America.

[60]  S. Dasgupta,et al.  Confronting the Environmental Kuznets Curve , 2002 .

[61]  Roland Clift,et al.  The relative importance of transport in determining an appropriate sustainability strategy for food sourcing , 2006 .

[62]  L. Bretschger.  Economics of technological change and the natural environment: How effective are innovations as a remedy for resource scarcity? , 2005 .

[63]  E. Rosa,et al.  Key Challenges to Ecological Modernization Theory , 2003 .

[64]  Jeroen B. Guinee,et al.  Handbook on life cycle assessment operational guide to the ISO standards , 2002 .

[65]  L. Lebel.  Transitions to Sustainability in Production‐Consumption Systems , 2005 .

[66]  Théophile T. Azomahou,et al.  Economic Development and Co2 Emissions: A Nonparametric Panel Approach , 2006 .