The Environmental Responsibility of Business? Make Profit!

Cite this Article
Michael Sykuta, The Environmental Responsibility of Business? Make Profit!, Truth on the Market (February 12, 2010),

That’s the punchline of a recent paper by Pierre Desrochers (U Toronto). Pierre has written some interesting papers on a range of topics related to economic development, technological innovation, and the intersection of business and the environment.   He argues that it is governmental (regulatory) failures that distort the environmental consequences of corporate behavior, not market failures. Should be an interesting read.

The environmental responsibility of business is to increase its profits (by creating value within the bounds of private property rights).” Industrial and Corporate Change, vol. 19, no 1 (February 2010), pp. 161-204.


Proponents of corporate social responsibility (CSR) typically consider “business as usual” unsustainable. Building on historical evidence that long predates the modern environmental movement, the contrary case is made that the interplay of voluntary exchange, private property rights, and self-interest has generally resulted in the so-called “triple bottom line” (economic, social, and environmental) through more efficient use of materials and the continual creation of higher quality resources. However, because market processes continually eliminate less competitive firms and tend to concentrate business activities geographically, political pressure brought to bear by adversely affected vested interests often results in the creation of policies that cause greater environmental harm than would otherwise be evident. Environmental CSR proponents often misinterpret these government failures as market failures, and characteristically advocate policies that further distract firms from their core objective and resulting triple bottom line. The article concludes by arguing that the most promising path toward truly sustainable development lies in the unwavering pursuit of profitability within the bounds of well-defined and enforced private property rights.