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Aaron K. Chatterji and Michael W. Toffel of Harvard Business School are taking a closer look at how environmental practices change when companies are publicly rated for their performance.

Here’s what I took from their paper: (You can download their working draft here: http://www.hbs.edu/research/pdf/08-025.pdf)

Businesses that understand that their profit motive is threatened by the perception that they are not environmentally friendly will respond noticeably to public pressure. Businesses with easy improvements to make and bad reputations are particularly likely to respond to such pressure. Businesses that already have sustainable practices are less likely to respond to public pressure because they are already the public’s best alternative. Please leave comments so we can get to the bottom of this!

I’m happy to see scholarship that is investigating the link between rating companies on socially responsible issues and seeing improvements in their practices. Understanding that connection will be critical as we move forward.

This entry was posted on Thursday, October 23rd, 2008 at 8:09 pm by Clay and is filed under Classroom, Related News. You can follow responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.