Abstract:
As the partisan divide in Congress has brought environmental legislation nearly to a halt in recent decades, much of the innovation in U.S. environmental protection now derives from initiatives by state governments and private actors. Driven by a desire to cut environmental costs or risks and to meet green consumer demand for environmentally less-damaging products, companies compete to develop sustainability strategies and to eco-label their market offerings. The growth of sustainability benchmarking and scorecards—with laggards at risk of losing their social license to operate—has emerged as another vector of private governance. Sustainability-minded investors have become a particular force in this regard with demands for more extensive corporate reporting on environmental, social, and governance (ESG) performance. NGOs provide yet another motivation for corporate sustainability both by threatening to expose environmental misdeeds and through partnerships that guide businesses toward best practices.