metadata: authors: 0: author: Sinclair Desgagne,Bernard
count: World
docna: 0: docna: Greening global value chains : some
            implementation challenges
docty: Policy Research Working Paper
subtopic: Industrial and Consumer Services and Products,Transport and Trade Logistics,International Trade and Trade Rules,Green Issues,Global Environment
teratopic: Social Protections and Labor,Macroeconomics and Economic Growth,Environment,Private Sector Development
abstracts: cdata!: The paper aims to highlight some of the
            most important implementation issues associated with the
            greening of global value chains with special attention given
            to how public policies and business strategies can support
            each other in meeting the challenge, particularly in
            developing countries. This requires a systemic view of
            global value chains that includes downstream supply chains
            and explicitly takes into account the relationships between
            regular members (raw materials providers, component
            manufacturers, and assembly plants, notably) and their
            clean-tech suppliers. It also involves a careful description
            of the business landscapes of global value chains as well as
            reliable environmental metrics and data, carefully examining
            how these can be shared among global value chain members and
            their stakeholders. Certain incentives must be set within
            member firms and throughout the supply chain and this
            involves reviewing managerial practices -- monitoring and
            auditing of environmental performance, compensation and
            rewards, transfer prices, task design and allocation,
            decision making processes, employee selection and training,
            and organizational culture -- and framing outsourcing
            contracts appropriately. To be effective, however, these
            initiatives need to be encouraged by credible national
            policies (which include environmental but also social
            policies targeting informal businesses) and international
            agreements, revealing disclosure programs, and a vigilant
            civil society.  On a global level, the coordination of
            business and public policies is crucial as the greening of a
            global value chain will certainly work best if its members
            and stakeholders move in tandem.
repnme: repnme: Greening global value chains : some
            implementation challenges
display_title: Greening global value chains : some
            implementation challenges
listing_relative_url: /research/2013/09/18276445/greening-global-value-chains-some-implementation-challenges
topicv3: Industrial Clusters and Value Chains
            m1326062 1226,Green Growth m1326430 476,Trade m1326924 698,Environment, Natural Resources and Blue
            Economy m1327391 566,Global Value Chains m1504237 2603
publishtoextweb_dt: 2013-09-01T00:00:00Z
historic_topic: Social Protections and Labor,Macroeconomics and Economic Growth,Environment,Private Sector Development
no_of_pages: 24
author_keys: 0: author_key: 1256211
model_extractions: WPS6613 Policy Research Working Paper 6613 Greening Global Value Chains Some Implementation Challenges _Bernard Sinclair-Desgagné_ The World Bank Sustainable Development Network Office of the Chief Economist September 2013
Policy Research Working Paper 6613

# **Abstract**

The paper aims to highlight some of the most important implementation issues associated with the greening of global value chains with special attention given to how public policies and business strategies can support each other in meeting the challenge, particularly in developing countries. This requires a systemic view of global value chains that includes downstream supply chains and explicitly takes into account the relationships between regular members (raw materials providers, component manufacturers, and assembly plants, notably) and their clean-tech suppliers. It also involves a careful description of the business landscapes of global value chains as well as reliable environmental metrics and data, carefully examining how these can be shared among global value chain members and their stakeholders. Certain incentives must be set within member firms and throughout the supply chain and this involves reviewing managerial practices—monitoring and auditing of environmental performance, compensation and rewards, transfer prices, task design and allocation, decision making processes, employee selection and training, and organizational culture—and framing outsourcing contracts appropriately. To be effective, however, these initiatives need to be encouraged by credible national policies (which include environmental but also social policies targeting informal businesses) and international agreements, revealing disclosure programs, and a vigilant civil society. On a global level, the coordination of business and public policies is crucial as the greening of a global value chain will certainly work best if its members and stakeholders move in tandem.

This paper is a product of the Office of the Chief Economist, Sustainable Development Network, and the Green Growth Knowledge Platform. The GGKP (www.greengrowthknowledge.org) is a global network of researchers and experts identifying and addressing major knowledge gaps in green growth theory and practice. It was founded by the Global Green Growth Institute (GGGI), Organisation for Economist Co-operation and Development (OECD), United Nations Environment Programme (UNEP), and World Bank and includes more than a dozen multilateral organizations and research institutes. This paper was presented at the GGKP Annual Conference, 4–5 April, 2013 in Paris. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The lead author, Bernard Sinclair-Desgagné, may be contacted at bsd@hec.ca.

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent._ Produced by the Research Support Team
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# **1.  Introduction**

Environmental regulation has a relatively long history. In his pathbreaking book on technological innovation in the Middle-Ages, for instance, Gimpel (1975) tells of a Royal decree of 1307 forbidding the use of sea coal in the London area. This type of coal was extracted just below the surface of some seashore areas in Durham and Northumberland counties and was abundant in those days. Its energetic performance was rather poor by modern standards; its smoke smelled badly and entailed significant health hazards. However, substitutes to sea coal, namely charcoal or higher-quality coal coming from Scotland, were rather expensive. A special enforcement agency had therefore to be created, in order “to find out all individuals burning sea coal in the city or its surroundings, to impose large fines on them right away, and to destroy their ovens in case of repeated offense.” Meanwhile, on the other side of the Channel, the French Parliament ruled on 7<sup>th</sup> September, 1366, that slaughter houses and tanneries be located on the Seine River downstream of Paris. Brewers were among the most vocal supporters of this decree, for slaughter houses and tanneries strongly degraded water, their main input. Each year then, about 250,000 animals were killed in Paris; tanning and butchering accounted for hundreds of tonnes of hazardous organic waste being thrown in the river. The new rule was thus well received by the population in general, although it affected negatively the production of slaughter houses and tanneries (which were crucial to virtually all urban economies in those days) by sensibly raising their transportation costs.

These stories illustrate three major points about environmental regulation. First, historically, the ability of governments to enforce environmental regulation on polluters was not an issue. Second, polluters’ costs to comply with a ruler’s decree could largely be ignored (within reasonable bounds, of course). Third, the willingness of targeted firms to move ahead in limiting pollution was not expected nor required.

Clearly, these features do not match the present economic setting. All over the world, employment, development and competitiveness have now become imperatives for any responsible government, so the ability of firms to preserve environmental resources while still prospering and creating jobs can hardly be overlooked. In addition, **_the globalization of business is now putting several polluting activities out of reach of regulators, so in order to deal with environmental problems effectively governments must refrain from coercion and share the task of managing environmental resources with business firms_ .** Taking stock of this landscape, economists and business scholars started three decades ago to investigate how environmental concerns could shape business strategy and be taken care of across business units. Their contributions are summarized and appraised in Reinhardt (2000), Gabel and Sinclair-Desgagné (2000), Sinclair-Desgagné (2005), and Johnstone (2007), among others. Current research is now increasingly focusing on global value chains (GVCs), as these largely make up the basic context in which most firms operate nowadays.

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Making a global value chain greener raises specific challenges.<sup>2</sup> Who are the participants in such a chain, how do they interact with each other, and how do they respectively and collectively affect the environment? What incentives should be set across the chain in order to foster collective environmental performance while maintaining individual competitiveness? How can the chain’s members coordinate their actions effectively? This note’s objectives are to briefly cover state-of-theart knowledge on these questions, and to point out certain relevant considerations that have received little weight so far. In accordance with the Green Growth Knowledge Platform’s intended outlook, special attention will be given to how public policies and business strategies can support each other in meeting those challenges, particularly in developing countries.

# **2.  Getting the right picture**

Like any practical goal, the greening of GVCs first relies on information. This section will accordingly consider the generic components of a GVC, the milieu in which its activities take place, and the extent of environmental data each entity should have or generate.

# **●  Who is involved?...**

Building on Klassen and Vachon (2012), Abbey and Guide (2012) and the DCED (2012) document, Figure 1 provides a broad framework to consider greening a global value chain.

In most industries – electronics, automotive, agro-food, aerospace, etc. – the typical GVC is seen as a sequence of raw materials extraction, components making, assembly, retailing, and customer utilization and disposal. As far as production is concerned, these activities are _complementary_ , so any constraint that is put on one of them will affect the others, be they located upstream or downstream. **_This calls for a systemic approach to greening supply chains._** As Klassen and Vachon (2012, p. 269, 271) indicate: “(...) firms in a supply chain do not work in isolation; (...) greener supply chain management is defined as the strategic and transparent integration of material, information, and capital flows to achieve environmental and economic objectives through the systemic coordination of key inter-organizational business processes.” The considered system will naturally comprise a number of environmental tasks, for example: site cleanup, water treatment, air pollution abatement, cleaner production, resource recovery, refurbishment and manufacturing, and recycling. Nowadays, these tasks are often outsourced, in whole or in part, to specialized firms forming the so-called environmental goods and services (EGS) industry. Alas, this industry is often overlooked in environmental policy discussions. Some precisions on it seem therefore in order at this point.

> 2 Global value chains are also transforming international trade, putting into question current trade data and the usual ways to assess trade policies. Taking on those issues goes beyond the scope of this paper. The interested reader may look at the recent studies by De Backer and Yamano (2012) and Van Assche (2012).

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**<u>Figure 1.</u>** <u>A general framework to consider greening a global value chain</u>

<!-- Start of picture text --> lobbies<br>Governments<br>Environmental<br>energy policy policy<br>Trade/industrial<br>policy<br>competititors Financial and NGOs /<br>communities<br>business services<br>Local/global infrastructures : institutions, cultures, education, health, transportation, communication, energy, water<br>raw customers<br>components assembly retailers<br>materials / end users<br>recovery /<br>air & water pollution<br>site cleanup abatement goods and reprocessing disposal<br>services downstrea<br>m supply<br><!-- End of picture text --> In a landmark document published in 1999, the OECD and Eurostat jointly define the EGS industry as follows (OECD/Eurostat 1999, p. 9): “(...) the set of activities which produce goods and services to measure, prevent, limit, minimize or correct environmental damage to water, air, and soil, as well as problems related to waste, noise and eco-systems. These include cleaner technologies, products and services which reduce environmental risk and minimize pollution and resource use.” Tables 1 and 2 below respectively provide data on revenues per segment and global trade flows for this industry. Many more figures and facts can be found in “EBI Report 2020” of Environmental Business International (2011), and in Durand and Sinclair-Desgagné (2012).

The EGS industry’s global revenues totaled USD 858 billion in 2012. The United States and the European Union each account for 38% of this amount, Japan for 17%, China for 3,2% and India for 2,5%. Waste management, followed by potable water and wastewater management, were the most important activities, both in terms of income and employment. Despite the recent economic downturn, employment in EGS-related activities seems to have done rather well, with an increase of 3% from 2007 to 2008. The EGS industry now employs more than 1.7 million people and accounts for 2.7% of GDP in the United States and in Europe. International trade in environmental goods has also grown faster, on average, than trade in all merchandised products. Historically, developed countries have been net exporters of environmental goods and services, and developing countries net importers (Bahar et al., 2013). However, with the growth of exporters like Brazil, China and India, the trade is becoming more balanced.

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|MarketSegment|2004|2005|2006|2007|2008|2009|2010|2011|2012|
|---|---|---|---|---|---|---|---|---|---|
|Water Equipment& Chemicals|o?70|5427|564|593|632|607|£4625|65.0|67.6|
|Air Pollution Control|40.6|42.5|439|453|45.1|38.8|3o.7|40.7|418|
|Instruments & Info Systems|7.6|8.2|6.6|6.9|93|6.9|92|9.6|10.1|
|Waste Mgmt Equipment|33.4|34.1|35.1|36.3|36.6|33.7|34.0|39.1|36.1|
|Process & Prevention Tech|3.6|37|3.9|41|44|45|45|46|47|
|Solid Waste Management|130.1|133.6|136.7|139.7|1428|142.1|1443|146.1|148.0|
|HazWaste Management|214|218|222|226|229|217|215|21.7|21.9|
|Consulting & Engineering|36.1|38.3|40.1|417|452|447|468|43.2|49.6|
|Remediation/Ind'l Services|377|©6400|420|441|45.7|44.3|44.8|45.3|45.7|
|Analytical Services|47|48|49|3.1|5.3|5.2|5.3|5.4|3.0|
|WaterTreatment Works|86.0|90.6|93.1|959|1008|1042|1066|1085|1102|
|Water Utilities|972|1005|103.5|1065|1115|1138|1164|1187|121.1|
|Resource Recovery|43.3|49.0|53.9|63.6|50.0|42.5|43.8|44.6|45.5|
|CleanEnergySystems&Power|305|40.3|59.2|769|99.1|111.0|123.5|136.1|150.2|

SOURGE: Environmental Business International, Inc., San Diego, Galif., units in US Sbil revenues generated by private and public sector entities

|By Region|2009||||||2009|
|---|---|---|---|---|---|---|---|
||Market|Exports|Imports|Balance|Exports|Imports|Industry|
|USA|202 1|405|274|13.0|13%|O%%|305.1|
|Western Europe*|219.6|55.8|308|16.0|24%|18%|235.6|
|Japan|95.8|19.1|72|11.9|18%|8%|107.7|
|Rest ofAsia|67.0|4.2|22.3|-17.0|10%|33%|50.0|
|Mexico|6.3|0.8|3.0|-2.2|18%|47%|41|
|Rest of Latin America|20.6|1.1|8.5|74|8%|41%|13.3|
|Canada|19.7|28|3.1|-0.3|14%|16%|19.4|
|Ausiralia/NZ|12.9|37|1.8|1.9|26%|14%|14.8|
|Central<br>& Eastem Europe|15.0|0.4|62|-§.2|0%|41%|os|
|Middle East|18.5|0.6|74|-6.8|5%|40%|11.7|
|Airica|8.7|0.2|43|-3.9|5%|48%|48|

SOURGE: Environmental Business International, Inc., San Diego, Galif. units in Sbil. *Note: each country within the region, not as a block: i.e. Genman sale to Italy is an export and an import
**_such firms as genuine members of the chain._** This might turn out to be particularly important when attempting to ‘close’ the supply chain (Guide and Van Wassenhove, 2009; Abbey and Guide, 2012), which entails considering how products reaching the end of their useful life must go through the series of tasks – collection, inspection, sorting, disposal, reprocessing and recycling – that form the so-called  downstream (or reverse) supply chain.

To be accurate and complete, however, one might have to also take into account those goods and services which are necessary for greening the supply chain but would be outsourced from firms that are not considered to be part of the EGS industry. The frontier establishing the EGS industry remains fuzzy, so many products that can be used in mitigating pollution (lime, for example) are often labeled as non-environmental (Steenblik et al., 2011). Furthermore, **_one should bear in mind that many_**

**_greening activities, particularly those pertaining to the downstream supply chain in developing countries, are omitted from the above tables because they are actually carried out by some_ informal** **_businesses_** .

# **● ... under what conditions?**

Of course, GVCs do not operate in a vacuum, so certain contextual items deserve attention as well for their role in driving incentives and supporting coordination.

First and foremost, the legal and political institutions under which firms operate globally and locally will have a strong influence on their respective _business agenda_ , with potential implications throughout the supply chain. Whether environmental regulation is properly enforced on firms in a given country, for instance, or **_whether certain activities carried out in the country lie in the_ informal** **_sector, will have some bearing on the means firms located elsewhere can adopt to make the whole supply chain greener_** (see Johnstone, 2007, for some empirical evidence).

Other key background elements are the local employees’ and populations’ culture, and their education and health levels, which largely shape the way they put up with environmental issues. Transportation and communication infrastructures also matter for the environmental impact of a GVC, notably through their influence on the location of component manufacturers and assembly plants. The availability (ownership and price) of energy and water, finally, would normally determine individual firms’ and GVCs’ efforts to preserve these resources.

An additional key driver of firms’ and GVCs’ attitudes towards the environment is the character and strength of competition. A retailer whose advantage in a highly contested market rests in consistently proposing very low prices, for example, might turn out to be less receptive to selling greener but more expensive goods. Industry-specific standards, customers’ attitudes, competitors’ aggressiveness, and some suppliers’ membership in several supply chains might slow or accelerate the adoption of greener practices (Klassen and Vachon, 2012). The empirical evidence presented in Johnstone (2007, p. 263) suggests that: “(...) facilities that saw competition on the basis of product quality as being more important than price competition [are] more likely to be environmentally proactive. (...) More generally, for solid waste issues, commercial and market conditions played a more important role than for air and water pollution, where policy influences were more important.” 6
The agenda of GVC members is moreover conditioned by social pressure coming from nongovernmental organizations (NGOs) and communities, as well as the active pursuit by some governments of energy, trade or industrial policies. The way certain policies are put to work can in turn have a decisive effect on buyer-supplier relationships and organizational structures (David and Sinclair-Desgagné, 2005; Sinclair-Desgagné, 1994).

Lastly, members of GVCs will rely on finance and other business services for funding, technical support, and advice. International business consultants can certainly help in spreading greener practices globally across national borders and supply chains. Lenders and insurers can also make a difference in controlling certain entities along the supply chain and sharing the risks of implementing process and product innovations.

# **● ... and with what kind of environmental information?**

Our description of a GVC would not be complete without addressing the matter of environmental information. **_Greening GVCs requires_ traceability** **_and_ transparency** **_._** The former is necessary to track hazardous products and materials, allocate responsibilities and monitor environmental compliance. The latter is a precondition for achieving credibility, legitimacy, and fairness (which preclude greenwashing, for instance, or shifting polluting activities to developing countries). This means each firm or plant in a GVC should be gathering and sharing data about environmental risks and impacts.

One hurdle here is that environmental information may not be comparable across firms and countries. This challenge has led to the development and promotion of standards, such as EMAS and the ISO 14000 norms, on how to conduct life-cycle assessment (LCA) and environmental audits. Other methods such as ecological foot-printing, eco-efficiency analysis, material flow analysis (MFA), SA 8000, and input-output analysis (IOA) are also available (Lifset and Boons 2012). As Klassen and Vachon (2012, p. 285) concede, however: “(...) research and practice must converge to develop rigorous environmental accounting systems that track a small number of key environmental metrics in supply chains, likely subject to impartial third-party audits.” Governments and business associations can play a major role in achieving this, both directly through research grants, and indirectly through fostering environmental labeling, certification to standards such as Fairtrade in agricultural products and the Forest Stewardship Council (FSC) in harvesting timber, and encouraging participation in programs like the Global Reporting Initiative (GRI), the Toxic Release Inventory (TRI) in the United States, and the Regulation, and Evaluation and Authorization of Chemicals (REACH) in the European Union, so as to create demand for **_environmental accounting_** .

Another obstacle to gathering and sharing environmental information is that **_many firms, particularly small and medium enterprises, may lack the necessary technology and expertise to collect and manage environmental data as it should be._** To deal with this, large firms like Casino, a French food retailer, and Dupont-Pioneer, a seed maker, have developed **_simplified versions of LCA_** that they now convey respectively to their suppliers and customers.<sup>3</sup> Government subsidies to professional training, and its support (via public procurement, for example) of the analytical services

> 3 There are clear advantages to the simplification of LCAs, but also disadvantages. One of the disadvantages is that some simplified versions might ignore the carbon footprints of capital goods used in production, thereby favouring capital-intensive producers in developed countries over many ones in developing countries.

7
and consulting & engineering segments of the EGS industry, might also contribute to making environmental data collection more widespread and affordable.

No entity within and around a GVC should be expected to know everything about everyone, of course. This would hardly be possible anyway, due to the presence of proprietary information and communication costs. The parties involved in greening a GVC will then be asymmetrically informed. This brings about incentive issues that we now turn to.

# **3.  Setting proper incentives**

Motivating heterogeneous entities endowed with differential information and diverging preferences towards a common goal is a generic challenge of any organization. As far as GVCs are concerned, this task must be jointly undertaken at the firm, supply chain, national and global levels, through managerial means and processes, buyer-supplier relationships, government regulation and global governance.

# **3.1  Within firms**

Gabel and Sinclair-Desgagné (2000) highlight and discuss several managerial instruments that firms – large or small, formal or informal – can use internally to foster compliance with environmental objectives. These instruments include performance rewards, monitoring and auditing of nonfinancial objectives, task design and allocation, decision-making processes, employee selection and training, and improving the firm’s culture. Large divisional corporations can also add transfer prices to this list.

# ▪ _Performance rewards_

According to Avila and Whitehead (1993), Dow Chemical’s performance improvement review had a number of elements – among which environmental performance – built into its bonus scheme for employees. Whether such a scheme was optimal, however, is another question. **_Incentive pay is a double-edge sword: it can work very well in some contexts, but lead to disaster in others._** An important feature to be dealt with here is that asking an employee to meet new environmental objectives amounts to expanding her usual agenda. Serious environmental programs being broad and complex, this might expose her to _informational overload_ . Returns to extra managerial effort might then decrease rapidly, and the fate of the firm might end up resting on dangerous but timesaving habits, misleading but convenient heuristics, and deficient but cosmetic problem solving.

In addition to the threat of informational overload, it might be difficult to _balance incentives_ between the pursuit of regular business activities and the reduction of environmental externalities. In a classical article on the subject, Holmstrom and Milgrom (1991) explain that: (...) when there are multiple tasks, incentive pay serves not only to allocate risks and to motivate hard work, it also serves to direct the allocation of the agents’ attention among their various duties. (...) the desirability of providing incentives for any one activity 8
decreases with the difficulty of measuring performance in any other activities that make competing demands on the agent's time and attention.

Since linking environmental results to a manager’s specific effort can be relatively hard, particularly when considering long-term environmental risks, the upshot might then well be an overall reduction of incentives on some legitimate (and easier to appraise) business functions. This might create a dilemma for the firm, unless of course a compelling business case can be made for the achievement of environmental objectives.

# ▪ _Monitoring and auditing_

Over the last two decades, the practice of monitoring and auditing environmental activities has spread among business firms. In small or informal enterprises, such appraisals will be mostly holistic and subjective. In large corporations, they have often become standardized, owing to the introduction of international norms and techniques (ISO 14010, EMAS, etc.). An obvious benefit of these practices is the careful review of the firm’s management of environmental resources – a necessary condition for greening its operations.

**_The information obtained could also feedback on incentives._** As it was expressed early on in The Economist (8<sup>th</sup> September, 1990), “Audits allow chief executives to set goals for subsidiaries: get your reported emissions down to such-and-such level, or lose a bit of your bonus.” Gabel and SinclairDesgagné (1999), moreover, have proposed the following scheme in order to overcome the above dilemma and reconcile typical business duties with environmental assignments.

Let the common business activities be routinely monitored, as they usually are, and suppose that environmental activities are audited when business-as-usual performance is high. Furthermore, let the manager be penalized if an audit finds that environmental performance is below expectations, but make the manager’s average compensation greater when there is an audit than when there is none.

Clearly, a manager subject to this kind of scheme will seek to be audited. She will then work harder on the regular business activities in an attempt to boost results and trigger an environmental overview. But since there is little benefit in doing this if the environment was neglected, she will also pay due attention to environmental goals.

# ▪ _Transfer prices_

**_For the same reason that governments can impose taxes on polluting emissions, a large divisional firm could adjust the internal or transfer prices its divisions are using when they trade goods with each other, so that such prices incorporate the costs of environmental damages._** Several companies have employed this means to improve their environmental performance. A European chemical manufacturer, for example, is imputing all measured environmental costs (like the legal fees incurred or expected and the insurance premia charged) to the responsible products and processes. With their product margins altered in such a way, division managers’ incentives to trade environmentally friendlier goods increase.

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# ▪ _Task design and allocation_

Holmstrom and Milgrom (1991) recommend that activities which are easier to monitor and those which are harder be assigned to different people subject to respectively strong and weak monetary incentives. The intuition goes as follows. Greater financial incentives tend to be associated with activities that are more accurately monitored. When a manager is made accountable for two activities, one of them easy to appraise and the other not, she might then be induced to give too much attention to the former at the expense of the latter. It would be preferable in this case to assign each activity to a different person.

Since the appraisal of environmental activities is often difficult, this suggests that **_regular profit-andloss objectives should remain the responsibility of a specific employee with strong incentives, while caring about environmental impacts should be assigned to another one_** with a fixed salary. This advice actually matches some commonly observed business practices. Firms often have employees with profit-and-loss responsibility working under strong incentive salary plans based on financial metrics, while others dealing with environmental matters get salaries independent of operating profit.

# ▪ _Decision making processes_

Decision-making is often centralized in order to control people's behavior. For example, a European firm in the agrochemical business recently set the following standardized operating procedure: some specified pesticides should not be sold into certain markets and to specific buyers, unless the company is assured that they would be used safely.

In a related context, Beckenstein and Gabel (1985) have analyzed a situation wherein managers’ decisions are made under uncertainty about their legality and probability of prosecution. The firm can then affect the quality of those decisions in two ways. It may **_provide better information_** to employees and monitor what they do. Alternatively, it may centralize decision-making, either by having key decisions be taken at higher hierarchical levels or by imposing predefined **_standard operating procedures_** that lower an employee’s discretion. Both avenues reduce the probability of non-compliance, but their respective costs are quite different. Information and monitoring lessen the likelihood an employee violates the law _and_ overlooks good prospects, while centralization decreases further the probability of the first mistake but raises the chances the second one happens.

**_Leadership also seems indispensable to implement a firm’s environmental strategy_** , as the basic arguments underlying such a strategy often appeal not to people’s greed or fear but to their sense of fairness towards future generations (Blais and Sinclair-Desgagné, 2002). Leadership – good leadership – allows leaders to economize on planning, structure, and control. For it harnesses the intrinsic motivation of individuals rather than relying on explicit contracts: people then derive their satisfaction from endorsing and working along their leader per se, not just in reaction to explicit carrots and sticks.

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# ▪ _Employee selection and training_

In addition to making their technology and physical capital friendlier to the environment, firms may also invest in 'greening' their human capital. More than two decades ago, the so-called ‘Winter Model’ (Winter 1988) described several means to be used by firms in order to enhance their employees' ability to cope with growing environmental pressure. These include staff motivation and in-house training, selective promotions and recruitment, appropriate working conditions, and even environmental counseling for employees' households.

**_Employees will be interested in their firm's environmental performance if they are themselves environmentally concerned and if they have a stake in the company's future._** The former is enhanced through environmental awareness, the latter through in-house firm-specific training.

# ▪ _Improving organizational culture_

Seeking a green organizational culture, finally, has often been invoked as an indispensable means, particularly in some industries – like the chemical or the waste management industries – that must cope daily with the risk of deadly accidental pollutions. A firm’s policy statements are necessarily broad and do not explicitly recognize all possible contingencies. What an autonomous employee should do in particular circumstances is therefore often suggested by the firm's history and current atmosphere (what we call here ‘organizational culture’) rather than by explicit rules or contract clauses. **_It is indeed the role of a firm’s culture to complete policy intentions with a consistent mindset._** Having a strong internal culture in line with its objectives allows a firm to economize on control of its employees and communication to other stakeholders.

# **3.2  Within chains**

The above-mentioned managerial systems can also be implemented (with some adjustments, of course) at the chain level. Additionally, outsourcing allows somewhat more freedom in selecting and terminating business relationships, framing buyer-supplier contracts, and using market incentives.

# ▪ _Selecting and terminating business relationships_

**_Downstream companies that commit to greener practices can select or terminate their procurement relationships accordingly._** Doing recurrent business with such companies will normally give their suppliers strong incentives to satisfy their desiderata. De Marchi (2011, p. 76) reports, for instance, that:

IKEA developed a Code of Conduct, IWAY – the IKEA Way on Purchasing Products, Materials and Services – that summarizes its environmental and social requirements. (...) In order to make business with IKEA, potential suppliers have to comply with preconditions indicated in IWAY that, as far as environmental conditions are concerned, requires the prevention of severe environmental pollution and safety hazards. (...) IKEA does not require suppliers to environmentally upgrade all of a sudden, but employs 11
rather a stepwise approach, starting with requests of minimum environmental (and social) conditions (...). Even if not automatically, non-compliance to IWAY and the subsequent action plan co-developed with IKEA auditors, will eventually end up with termination of business, even if all other aspects such as cost and quality are met, as happened with 10 suppliers in 2009, the 19% of the overall cessations globally.

In small or medium-sized downstream enterprises, organizational culture and leadership will likely substitute for explicit standards.

# ▪ _Designing effective contracts_

The argument that contract framing can have an impact on value creation was recently made by Weber and Mayer (2011). They use the terms ‘prevention frame’ and ‘promotion frame’ to denote ‘minimalist’ and ‘maximalist’ frames respectively. In their own words (p. 54): A prevention frame leads to an interpretation of a goal as minimal (something that must be met), which induces high-intensity negative emotions if the goal is not achieved and low-intensity positive emotions if the goal is met. (...) Conversely, under a promotion frame, parties view the same goal as maximal (something that would be ideal if reached). If a maximal goal is missed, low-intensity negative emotions are experienced, whereas if a maximal goal is reached, high-intensity positive emotions are induced. Thus, in an effort to reach the maximal goal and avoid sins of omission, parties display more flexible and creative behavior.

Clearly, **_promotion frames agree better with the objectives of greening GVCs and fostering green innovation._** Within such frames suppliers are more likely to consider offering _‘augmented’ products_ (a suggestive term introduced in industrial marketing by Lindgreen and Wynstra, 2005) that systematically deliver beyond the buyer’s expectations.

# ▪ _Taking full advantage of market incentives_

Market competition can also constitute a powerful means to make GVCs greener, particularly when dealing with suppliers of abatement goods and services.

The sheer number and diversity of EGS producers makes it likely that several firms will be capable of delivering the appropriate means to meet an environmental target. Making them compete for a contract is thus a smart thing to do. Not only will this keep costs under control, but it will harness the EGS suppliers’ diversity and creative potential. Recently, for instance, a U.S.-based chemical plant that needed to control its volatile organic compounds (VOC) and odor emissions launched a _bidding process_ . After a thorough technical evaluation of the received proposals, it selected a consulting engineering firm and had a customized catalytic oxidization system installed. Not only did the firm benefit from the ongoing destruction of VOCs and odors – in compliance with regulations and 12
corporate environmental objectives – but the changes also helped reduce operation and maintenance costs.<sup>4</sup> Firms producing for GVCs that need pollution-abatement technologies should note, furthermore, that market competition gives suppliers of such technologies a strong stake in creating value for their customers. Since the 1990s, environmental regulation has relied more and more on market instruments (such as tradable permits) instead of command-and-control mechanisms. Initially, this trend led to a crisis in the EGS industry because clean-tech suppliers could no longer assume that regulation would always force polluters to use pre-identified abatement goods and services. Some trade associations and consultants then recommended working at preventing polluting emissions instead of just delivering end-of-pipe remedies. This, they said, would lead to a reassessment of a customer’s whole operations, revealing new ways to enhance its competitiveness. **_By helping out their clients in the competitive game, clean-tech suppliers would make them prosper and create the conditions for their own expansion._** Box 1 presents three illustrative cases of this.

Such a new mindset suggests that pollution abatement suppliers have switched from a ‘goods logic’ to a _‘service logic,’_ meaning that they now place their clients’ core activities at the heart of the transaction. Grönroos (2010, p. 2) defines the two logics as follows: According to a traditional manufacturing approach, following what could be labeled a _goods logic_ , the supplier, for example producing and selling a production machine, would concentrate on how well the machine fits the customer’s production process – on what can be called _operational efficiency_ . (...) It remains the responsibility of the customer to make sure that it can make effective use of the resource so that value can be created out of the resource purchased.

A service business, i.e. a firm that has adopted a _service logic_ , would take a much further-reaching responsibility for a customer’s everyday practices and how they ultimately support the customer’s business. (...) The core customer process (e.g. a production process) is supported by the core of the supplier’s market offering (e.g. a production machine), whereas the customer’s business is supported by the entire extended offering, including the machine and support to other customer processes important to the business.

**_A key challenge now is to sustain this frame of mind._** As the previous paragraph suggests, regulators will play a key role here.

# **<u>Box 1.</u>** <u>Three cases of polluter-abater value-creating relationship</u>

> <mark>● A commercial bakery in California,</mark> _<mark>Gold Coast Baking</mark>_ <mark>of Santa Ana, wanted an emission abatement system that would make its new production line comply with VOC emission regulations. The company then asked its abatement supplier to build a catalytic oxidizer as</mark> _<mark>an integral component</mark>_ <mark>of the new bakery oven. The unique design – incorporated as part of the operation process, not as an end-of-pipe</mark>

> 4 This example and those presented in Box 1 are extracted from the case studies conducted by the Institute of Clean Air Companies (ICAC), a nonprofit U.S. association of firms working in the control and monitoring of stationary-source air pollution.

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<mark>system – resulted in substantial time and money savings. For instance, making the heat circulate into the oven eliminated the need for an additional heat exchanger and lowered fuel consumption by 25%.</mark> <mark>● Engineers at a major manufacturing plant in California needed to replace a faulty wet venturi scrubber operating on a waste-wood-fueled boiler. They wanted a system that would drastically lower flyash output, operate efficiently on the variable fuel, and resist fires. This system had to be engineered, fabricated and installed within eight months. The company looked at various ways it could clean the stack emissions generated by its fixed-grate stoker boiler, including fabric filters and dry electrostatic precipitators (ESP). A pilot study conducted on site by a control technology supplier, however, convinced the manufacturer that a wet ESP would meet their requirements. Thanks to the acquired information, the supplier then designed, engineered, and installed an air pollution control system that is keeping emissions well below current regulatory thresholds. The company thereby ensured to maintain a competitive edge over other manufacturers as regulation becomes tighter.</mark> _<mark>●</mark>_ <mark>A manufacturing company selling an array of flexible packaging to customers across the U.S. needed to control its VOC emissions and treat a wide range of solvents (its plant was located in a residential section of town with a hospital across the street). Its 15-year-old carbon-bed recovery system required a lot of maintenance work and consumed a large amount of fuel. The system also yielded unrecyclable solvents that resulted in significant monthly disposal fees. In addition, the restricted solvent diet that the system could handle was limiting manufacturing flexibility. To address the problem, a regenerative thermal oxidizer (RTO) was built offsite and trucked to the packaging facility in close collaboration with engineers from an industrial equipment installation firm. Stack testing of the installed oxidizer produced an actual destruction efficiency of 98.9% - more than enough to satisfy the regulatory agency. Compared to the old solvent recovery system, the new system eliminated disposal fees and brought important savings in operating costs, with fuel consumption reduced by 80%. The RTO also eliminated the need for 9,000 pounds of water previously used for daily steam downs. Finally, the plant has been able to put the people in charge of the old solvent recovery system maintenance back into</mark> <mark>value-adding activities. By considering its cleantech supplier a partner rather than some arm’s-length dealer, this company was able to convert environmental compliance into a process of value creation.</mark> <u>Source: Author’s reading of the Institute of Clean Air Companies (www.icac.org)’s website information</u>

# **3.3  Within national borders**

While public pressure and the activism of environmental NGOs are certainly growing, **_governments still remain the main source of incentives to protect the environment within national jurisdictions._** Some environmental public policies – taxes, technology standards, inspections, legal liability, etc. – will significantly influence the efforts individual firms and branches of GVCs situated on national territory will devote to pollution prevention and the reduction of environmental risks (Johnstone, 2007).

As suggested in the introduction, **_in order to succeed nowadays, environmental public policy first needs to be endorsed (if not led) by industry_** . Table 3 below lists a number of government actions (beyond coercion) that might enhance the individual and collective participation of business firms.

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|||G|OVERNMENT||||
|---|---|---|---|---|---|---|
|fetid<br>of ensuring<br>partic)pation:|Coerion|Pressure|Persuasion|Enoourage-<br>Tent,|Facilitation|No involve-<br>ment|
|Concrete action:|infonms|Consults|Cosoparabes|Adwises|Mom ibors,|Obsenes:|
|implementation<br>responsibilty was:|||Exam|ples:|||
|Each individual<br>or firm<br>|Govemment<br>Sets an<br>environmen-<br>tal standard<br>with litth: or<br>no prior<br>consultation<br>with<br>attected<br>films.<br>|Gowemment<br>holds public<br>hearings<br>before<br>setting a<br>Standard<br>|([Rare,<br>because<br>of high<br>transaction<br>costs.)<br>Volu<br>|Govemment<br>establishes<br>“best<br>Pirectice”<br>guidelines.<br>ntary, auoperati<br>|Gowemment<br>prowides<br>standard<br>format for<br>finms to<br>report om<br>ectivities..<br>ve action by ind<br>|Individuals<br>engage in<br>unreported<br>woluntary<br>activities.<br>ustry<br>|
|‘Groups<br>of bedividuals<br>or finns<br>(collectively)|Goverment<br>secs botal<br>emission<br>quota for<br>Industry,<br>which then<br>allocates:<br>fiom-level<br>quotas.|Industry<br>hegotiates a<br>fommal cove-<br>nant with<br>Govemment<br>obliging the<br>former to<br>achieve =<br>specified<br>jewel of per-<br>formance|Govemment<br>and industry<br>agree<br>to share<br>responsibil-<br>ity in imple-<br>menting<br>programme.|Goverment<br>provides<br>sdwiscors to<br>work with<br>voluntary<br>groups<br>within<br>industry|Association<br>collects<br>Information<br>on mem-<br>bers’ activi-<br>tes smd<br>reports tho<br>Goved-<br>mett.|Groups<br>engage in<br>(umreported<br>woluntary<br>activities<br>[2g estab<br>lishing code<br>of best<br>Practice).|
||||INDUSTRY||||
|Concrete ection.|Ee infommed|Advise:|Cosoperates|Consult=|Informs|Selt<br>regulates|
|Legal obligation:|Compulsory|Semi-co|mpulsory|Co-<br>Operative||Mon-<br>compulsory|
This said, many non-environmental public policies could also affect the relationship between polluting firms and their clean-tech suppliers within GVCs. This is obviously the case for policies that focus on infrastructures (as defined in Figure 1). Additionally, since the production of environmental goods and services increasingly matters for environmental protection, employment and international trade, several governments (notably in Europe, the United States, China and India) are now actively and openly promoting their national EGS industries. When these initiatives consist in nondiscriminatory and enabling measures, such as public funding of environmental R&D, the economic intelligence necessary to identify and enter foreign markets, the design of public procurement, the advent of business alliances and partnerships between private firms and public research institutes, and the availability of venture capital, they will encourage entrepreneurship and competition in the EGS industry.<sup>6</sup> Taking stock of the examples of the previous section, **_competition should be further managed in such a way that value creation (more than regulation) continues to be essential for survival in the EGS industry_** . Subsidies and programs inviting new participants in downstream supply chains certainly go in the right direction and should be pursued, if not incremented. At the same time, _competition policy_ must apply vigorously to the EGS industry, considering the growing market concentration in certain segments (in the solid waste treatment and air pollution abatement ones, notably). **_Regulatory uncertainty should also be lowered as much as possible_** : by increasing the initial capital necessary for a firm to self-protect against future rules, it generates significant entry barriers for new entrepreneurs. Rarely mentioned but as important for the expansion of cleantech activities would be **_governmental actions aiming at countering corruption_** (which often plagues the construction sector and solid-waste management in certain countries). This would not only benefit the environment by improving compliance with rules and regulations, it will also foster professionalism and expertise in the delivery of environmental goods and services.

As stressed in the DCED (2012) report, finally, some **_government interventions in the social sphere_** could help lift certain impediments to greening GVCs, notably in developing countries. Two illustrative examples, having to do with **_fostering inter-generational property transfers and retraining_** , are given in Box 2. Policies seeking to **_harness informal entrepreneurship, particularly the informal businesses which seem to prevail in the downstream parts of GVCs in low-income countries,_** might also be beneficial. Government intervention here faces a dilemma, however (Sinclair-Desgagné, 2012). On the one hand, the informal sector often constitutes a testing and training ground for innovative or inexperienced entrepreneurs, so they can increase their skills, confidence and knowledge. On the other hand, informality may not allow a talented entrepreneur to achieve his or her full potential. After reducing red tape and enforcing property rights, public authorities might therefore concentrate on result-enhancing measures (such as product take-back policies) rather than coercive actions aiming to deter all informal business.

> 6  In certain countries, unfortunately (notably in the renewable-energy segment), government support has rather served the interests of well-connected firms (see the recent study by Bahar et al., 2013).

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**<u>Box 2.</u>** <u>Two cases of social policies that would foster greener supply chains</u>

<mark>●</mark> **<mark>Greening the global cocoa chain, Ghana</mark>** <mark>: One of the underlying root causes for low productivity of cocoa and hence deforestation has been identified to be the land tenure system. Due to earning only a share of the profits, neither the owner nor caretaker have enough incentives to increase productivity. Facilitating inter-generational contracts to give young people access to land, combined with modern organic farming, enterprise and skills development would attract young people to engage in the current low-productivity cocoa sector. Additionally this would alleviate rural-urban migration. Slash and burn methods practiced by older generations would cease due to intensification and productivity increases. Additional income could be generated from economic diversification into cocoa honey, ecotourism, carbon credits and other food and cash crops, so as to ensure a sustainable global value chain for the multinational chocolate sector.</mark> <mark>●</mark> **<mark>The national dairy value chain with a green lens in India:</mark>** <mark>Cow dung drives a shadow economy of national importance employing, most informally, half the number of workers in the dairy sector. While a buffalo can produce up to 15 litres milk daily, it also produces 30 kg of dung, equivalent to 3 litres of crude oil. Due to its high energy and nutritional value, dung is used for the production of biogas, electricity and fertilizer. The full integration of dung into a ‘Dairy Dung-Energy’ policy could foster socioeconomic development, providing basic energy needs and helping tackle key dairy quantity and quality bottlenecks in India, though increased income and biogas sterilization. Throughout India a total of 1.9 million additional full time jobs could be created. Though 400 000 jobs might be lost in low-productivity dung cake making, with the right just transition policies in place for those affected – mostly women workers making dung cakes – they could be retrained and re-employed in the production of organic fertilizer from the slurry of the biogas plants.</mark> <u>Source: DCED (2012)</u>

# **3.4  At the global level**

Like the incentives provided by national governments, those set at the global stage are meant to enhance firms’ and GVCs’ efforts to become greener. To be sure, an additional objective would be to

**_dissuade arbitrage between jurisdictions and environmental dumping across countries._** The available means to do so include:

► **_International environmental agreements_** , like the _Basel Convention on the control of transboundary movements of hazardous wastes and their disposal_ . The aims of this Convention are: “(i) the reduction of hazardous waste generation and the promotion of environmentally sound management of hazardous waste, wherever the place of disposal; (ii) the restriction of transboundary movements of hazardous waste (...); and (iii) a regulatory system applying to cases where transboundary movements are permissible.” It is noteworthy that some programs in the Convention seek to provide advice and training to firms and governments. Between 2003 and 2008, for example, the Mobile Phone Partnership Initiative developed complete guidelines for the management of obsolete mobile phones, which are being used in the concerned GVCs.

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► **_Agreements aiming to lift tariff and non-tariff barriers to trade in environmental goods and services_** , following paragraph 31(iii) of the Doha Development Agenda and the recent APEC initiative on trade in environmental goods. This would contribute to set the right competitive landscape for value creation in the EGS industry.

► **_Green technology transfers_** , which can be enhanced, for instance, by treaties such as the Clean Development Mechanism of the Kyoto Protocol (Glachant, 2013).

► **_NGOs_** , which have undeniably emerged as key players in global governance, acting as watchdogs of multinationals and their suppliers. Previous campaigns by NGOs against some multinational firms (for example, Greenpeace’s campaign against Nestlé for using palm oil produced without regard for rain forests) have turned out to be quite costly to the latter. Acknowledging this threat, several business firms (such as Lafarge, a cement and concrete producer) have entered strategic alliances with environmental NGOs (the World Wildlife Fund, in this case), seeking thereby to prevent damaging campaigns and make their commitment to greener processes and products credible and effective.<sup>7</sup> ► **_Disclosure programs and worldwide media_** . Such programs are illustrative of the so-called ‘third wave’ of environmental regulation, which followed the successive command-and-control and market-based approaches (WRR, 1992; Tietenberg and Wheeler, 2001). Since many firms – global firms in particular – value their public image, mandatory, voluntary or third-party disclosures provide additional incentives for improving environmental results. In certain developing countries, moreover, they have been found to reinforce regulatory institutions.

But what chiefly matters at the global stage is also the effective co-ordination of initiatives within GVCs and between governments.

# **4.  Moving jointly and effectively**

Considering the world’s variety of local institutions, standards of living and environmental issues, **_it would be neither possible nor even efficient to adopt and enforce the same norms and regulations simultaneously and everywhere._** Yet, the systemic approach which seems indispensable in order to green GVCs requires the unfailing involvement of all stakeholders.

**_Given that GVCs are often headed by some leading firm, one proposal is to first start by_**

**_incentivizing these firms._** In consumer-oriented chains, such a firm will be a major retailer (such as WalMart or Toys R’ Us); in producer-oriented chains, it will be a large manufacturer (such as Lenovo or Embraer). Thereafter, this firm could play a key role in coordinating efforts to become greener, through product design and specifications, the codification of business processes, supporting audits, knowledge transfers, co-innovation, etc. (De Marchi 2011). The ultimate governance structure will depend on a number of factors listed in Table 4.

> 7 There have been a few bad cases of NGO-multinational alliances, however: for example, the one between the Sierra Club and Clorox (a household cleaning-products manufacturer), which was essentially motivated by funding, led to a strong backlash.

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||Standard-driven|Relational-driven|
|---|---|---|
|Lead firm’s main tools|Standards & certifications,<br>supplier selection, (supplier<br>development)|Design, (supplier develop-<br>ment)|
|Prevalent interaction<br>Intensity of co-innovation|Monitoring and controlling,<br>(supporting)<br>Low|Cooperating on innovative<br>activities, (supporting)<br>High|
|Monitoring mode<br>Supporting mode|Formal<br>Formal|Informal<br>Informal|
|Suppliers’ costs|(Machinery & equipments),<br>managerial|(Machinery & equipments),<br>R&D|
|Suppliers’ incentives|High volumes,<br>(learning),<br>(securedemand)|Reputation, (learning), (se-<br>curedemand)|
movements of waste, the trade liberalization of environmental goods and services, and technology transfers), revealing disclosure programs, and a vigilant civil society.

Finally, the greening of GVCs will certainly work best if members and their stakeholders move in tandem. This does not mean that all firms and nations should simultaneously adopt and enforce the same blueprint. Effective co-ordination towards greening a GVC can often be achieved by relying on a well-motivated, able and closely watched leading firm.

# **References**

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Avila, Joseph A. and Bradley W. Whitehead (1993): “What is Environmental Strategy?,” _The Mckinsey Quarterly_ 4, p. 53-68 Bahar, Heymi, Jagoda Egeland, and Ronald Steenblik (2013): “Domestic Incentive Measures for Renewable Energy with Possible Trade Implications,” _OECD Trade and Environment Paper_ 2013/01, OECD Publishing Beckenstein, Alan R. and H. Landis Gabel (1985): “The Economics of Antitrust Compliance,” _Southern Economic Journal_ 52, p. 673-692 Beltramello, Andrea, Koen De Backer and Laurent Moussiegt (2012): “The Export Performance of Countries within Global Value Chains (GVCs),” _OECD Science, Technology and Industry Working Papers_ 2012/02, OECD Publishing Blais, Ann-Renée and Bernard Sinclair-Desgagné (2002): “Leadership in 3S’s: Skills, Styles, Situations,” CIRANO Burgundy Report, Montréal, available online at http://neumann.hec.ca/chaireing/art/Leader_engl.pdf DCED Green Growth Working Group (June 2012): “Green Value Chains to promote Green Growth,” available at - <u>www.Enterprise Development.org</u> David, Maia and Bernard Sinclair-Desgagné (2005): “Environmental Regulation and the Eco-Industry,” _Journal of Regulatory Economics_ 28, p. 141-155 De Backer, Koen and Norihiko Yamano (2012): “International Comparative Evidence on Global Value Chains,” OECD Science, Technology and Industry Working Paper 2012/3, Paris <u>http://dx.doi.org/10.1787/5k9bb2vcwv5j-en</u> De Marchi, Valentina (June 2011): “Greening Global Value Chains: The Role of Lead Firms in Fostering Environmental Innovations,” unpublished Doctoral Dissertation, University of Padua Durand, Aurélia and Bernard Sinclair-Desgagné (2012): “The Growing Business of Mitigating Ecological Footprints,” Working Paper available at <u>http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2043092</u> EBI Report 2020 (2011): _The U.S. Environmental Industry & Global Market_ , Environmental Business International, 3269 pages Gabel, H. Landis and Bernard Sinclair-Desgagné (2000): “Corporate Responses to Environmental Concerns,” in _Principles of Environmental and Resource Economics. A Guide for Students and Decision Makers_ (Henk Folmer, H. Landis Gabel, and Hans Opschoor, eds.), Edward Elgar (2<sup>nd</sup> edition), p. 265-279 Gabel, H. Landis and Bernard Sinclair-Desgagné (1997): “Environmental Auditing in Management Systems and Public Policy,” _Journal of Environmental Economics and Management_ 33, 331-346 Glachant, Matthieu (2013): “Greening Global Value Chains: Innovation and the International Diffusion of technologies and Knowledge,” paper presented at the Annual Green Growth Knowledge Platform (GGKP) conference, Paris, 4-5 April 2013 Guide, V. Daniel R. and Luk Van Wassenhove (2009): “The Evolution of Closed-Loop Supply Chain Research,” _Operations Research_ 57(1), p. 10-21 Gimpel, Jean (1975): _La révolution industrielle du Moyen-Âge_ , Éditions du Seuil Holmstrom, Bengt and Paul R. Milgrom (1991): “Multi-Task Principal-Agent Analysis: Incentive Contract, Asset Ownership, and Job Design,” _Journal of Law, Economics, and Organization_ 98(6), p. 1119-1158 Johnstone, Nick, editor (2007): _Environmental Policy and Corporate Behavior_ , Edward Elgar Publishing 21
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