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Organisations, environmental management and innovation
Organisations, environmental management and innovation

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2.5 Externalising the burden

The sense of negativity about environmental issues arises because organisations have historically tended to externalise environmental issues and costs – i.e. placing them outside the boundary of the organisation and, especially, its financial and accounting systems. Environmental changes, such as pollution caused by an organisation’s activities, become someone else’s responsibility to deal with and pay for. This approach has been critiqued by many, for example in the book The Necessary Revolution (Senge, 2008).

Much of the innovation in environmental policy and legislation of the last 100 years has been centred on trying to (re)connect organisations to the natural environment, most simply illustrated by the emphasis on the ‘polluter pays’ principle. In essence, this principle aims to place the responsibility on the person or organisation creating the pollution. It was a key element in the principles of the 1992 Earth Summit and is now to be found in many legal statutes, such as the Environmental Liability Directive (Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage). The ‘polluter pays’ principle also underpins the development of global carbon markets and carbon-related taxes.

Whether such approaches and innovations work and are effective in changing mindsets, behaviours and practices is another matter. For example, you may consider that paying a carbon-related tax for using a car or flying does little to develop a sense of connection with the natural environment or influence your or others’ behaviours and choices.