CLEAN BUSINESS - POLICY, PRACTICE AND ECONOMIC-IMPLICATIONS

Business has a substantial part to play in addressing the contemporary environmental challenge. This paper presents a model of wealth creati on that can be applied to individual businesses or the economy as a wh ole, in order to understand the role of the environment in wealth crea tion and how this may cause its deterioration. From this model it is p ossible to derive principles and standards for environmental sustainab ility for the economy, from which a definition of a clean business is derived. To reduce its environmental impacts, a business needs to adop t new environmental reporting and accounting systems, which are discus sed, together with evidence that such systems can enhance a firm's pro ductivity and competitiveness. Government interventions, including the use of environmental taxes and charges, will be required for business es generally to become cleaner, but the paper concludes that the leadi ng companies that successfully become clean businesses ahead of legisl ative requirements may well save costs and gain competitive advantage from so doing.