chapter  3
15 Pages

Sustainability: The Challenges for Companies

The environment and the economy are closely related; in fact they are mutually dependent. The government has an important role to play in this by using its instruments to internalize environmental effects into market prices so that companies and consumers make more sustainable production and consumption decisions, respectively. Obviously, more sustainable consumer purchasing behaviour will encourage companies to make more sustainable production decisions. Besides these push (government) and pull (consumer) factors, companies can also foster more sustainable development themselves, because they may have their own ideological or business reasons for striving for sustainability. Of course, it is important that the measures do not undermine the continuity of these companies in the long term, and that consumers actually buy the more sustainable products, or that governments support these companies with subsidies and tax concessions.