The big investment banking firm has announced a policy that details how its 24,000 employees - be they bankers, analysts or purchasing agents - should promote activities that protect forests and guard against climate change,i'm really not surprised that it does that voluntarily. Was there a pressure from the government? No, the "pressure" comes from J.P. Morgan and Merrill Lynch:
This year, J. P. Morgan Chase set out strict environmental dos and don'ts for each part of its business. And Merrill Lynch now includes environmental issues in the due-diligence checklist its bankers use before underwriting stock issues.I remember a conversation between my student ("him") and me in Env-Econ class:
Me: I happened to visit two big, export oriented companies located in East Jakarta. They told me, they're green. The first company allocated some fraction of its annual sales to fund environmental cleanup. The second established an environmental awareness program in its community. I curiously asked them, why they did that -- as far as I knew the government had not issued any regulation for that. They said, well, their competitors did that, too.My point was, and is, that competition can play a role in favor of the environment. You don't really need government.
Him: Yeah, right. But you didn't know what their intention was, did you? It's probably just a pure profit motive -- you know, to build good image, than attract buyers.
Me: I don't give a damn to "intention". What I know is, they were green. I don't care with the motive.
Of course there are times when such good competition might not be possible. For example, in areas that suffer from environmental injustice, the community might not be able to get attention from private companies. In this case, a little role of the government might have its justification. Some kind of taxation is a case in point. Here's a paper I co-wrote on this issue.