Environmental Auditing in Management Systems and Public Policy
AbstractNew international standards for environmental auditing are now being actively promoted by public authorities and adopted by private firms. One important feature of these standards is their emphasis on managerial systems and incentives that support a wiser use of environmental resources. This paper studies such a system, in which incentive compensation may be based in part on the results of an environmental audit. It is found that optimal wages after an environmental audit is performed should have a greater range than wages paid when no audit has occured. It is also shown that the decision to conduct an environmental audit and the size of the expected wage in this case depend crucially on whether the agent's prudence (or precautionary motives) dominates or not his aversion to risk. It is finally found that the insertion of environmental audits within current management systems would certainly induce a manager to care more about the environment; moreover, although this may come at the expense of less concern for other activities, we find plausible circumstances in which properly designed environmental audits overcome such a tradeoff and increase the manager's attention to both environmental and traditional tasks. The public policy maker's role and interest in promoting environmental auditing standards is also discussed briefly. De nouvelles normes pour les audits environnementaux sont actuellement en train d'Ãªtre Ã©laborÃ©es et implantÃ©es par les gouvernements et les entreprises. Ces normes mettent principalement l'accent sur les systÃ¨mes de gestion et les incitations qui encouragent un meilleur usage des ressources environnementales. Cet article Ã©tudie un tel systÃ¨me, oÃ¹ la rÃ©munÃ©ration pourrait dÃ©pendre en partie des conclusions d'un audit environnemental. On trouve que le salaire versÃ© aprÃ¨s la tenue d'un audit devrait varier davantage que celui versÃ© lorsqu'il n'y a pas eu d'audit. On montre aussi que la dÃ©cision d'effectuer un audit environnemental e
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Environmental Economics and Management.
Volume (Year): 33 (1997)
Issue (Month): 3 (July)
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Web page: http://www.elsevier.com/locate/inca/622870
Other versions of this item:
- H. Landis Gabel & Bernard Sinclair-Desgagné, 1996. "Environmental Auditing in Management Systems and Public Policy," CIRANO Working Papers 96s-21, CIRANO.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
- M49 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Other
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