Abstract

The firm has an overwhelming role in sustainable development, and this paper identifies what influences a firm’s management of the business-environment interface. This is done through an in-depth case study of the environmental behavior of Tata Steel, India’s largest and oldest integrated steel plant. The Indian regulatory environment is one of strict (and sometimes contradictory) laws and slack enforcement. This paper examines the inclination of a firm in this context to commit to pollution abatement and honor its commitment by achieving long-run improvement in its environmental performance. Environmental responses studied include compliance withexisting norms, involvement in voluntary schemes, and implementation of environmental management programs. Other responses examined are investment in pollution prevention strategies, adoption of cleaner technologies, taking adversarial positions against regulators vs. working with them to develop regulations, influencing environmental policy, and meeting and/or exceeding stakeholder expectations. This paper analyzes Tata Steel’s reactive and proactive responses and generalizes some of its conclusions to firms indeveloping countries.