Corporate Environmentalism: Doing Well by Being Green

A certain number of corporations, probably an increasing number, go considerably beyond what is required of them legally in minimizing their environmental impact. They meet legal limits on environmental impacts and then go beyond these. This has been called "overcompliance," a descriptive, if not elegant, phrase designating going well beyond what is required by laws and regulations in force. Why do corporations overcomply, going beyond what is legally required of them? The explanation I shall advance here is that they do this to internalize external effects, something that they find in their long-term interests because it reduces the sources of conflicts between them and society.