One of the most important questions facing humanity is “how can we structure our interactions to that the choices of individual people and organizations are not incompatible with the welfare of society?” We confront this challenge in our everyday social interactions and in how institutions such as governments and businesses interact with each other. Elinor Ostrom’s Governing the Commons provided a framework for understanding how and when people can construct self-governing institutions for common property resources. This book takes a similar approach to provide a framework for understanding how and when companies can produce win–win interactions with their stakeholders by improving their environmental performance. The chapter includes with acknowledgements.

An environmental strategy is an integrated set of choices about how a company should interact with the environment and its environmental stakeholders. A first step is identifying how a company impacts the environment and the stakeholder demand for improving those impacts. Stakeholders demand depends on the co-benefits they receive from environmental improvements and the resources they are able to deploy in pursuit of those improvements. A second step is identifying the market and nonmarket channels through which stakeholders can transfer value to the company in return for producing an environmental improvement. A third step is ensuring credibility – how can its stakeholders ensure that the environmental improvements are genuine and that each side will follow through on its promises in the exchange? A final step is to identify how the environmental strategy fits with the company’s competitive strategy. An environmental strategy can enhance a company’s market and nonmarket strategies in ways that are difficult for competitors to mimic, thus creating new sources of sustainable competitive advantage.

The social foundations of the environmental strategy framework lie in Coaisan exchanges between companies and their stakeholders to reduce companies’ environmental impacts. A company’s environmental impacts are negative externalities in that they have consequences borne by those who did not choose to incur them. A Coasian exchange occurs when stakeholders compensate companies to reduce their production of negative externalities, resulting in outcomes that benefits the company and its stakeholders. The obstacles to Coasian exchanges are (1) search and screening costs to identify environmental improvements and stakeholders; (2) bargaining and transfer costs to negotiate terms and exchange resources; and (3) monitoring and enforcement costs to ensure both sides of the exchange uphold their obligations in the exchange. The goal of environmental strategy is to identify and mitigate these obstacles so that companies can implement environmental improvements that create value across the triple bottom line.

Strategic resources are the assets, capabilities, organizational processes, information, and knowledge that enable a company to conceive of and implement strategies that improve its efficiency and effectiveness in ways that are difficult for competitors to mimic. Strategic resources for environmental strategy include capacities for identifying opportunities for environmental improvements, analyzing and engaging stakeholders, managing channels for capturing value from stakeholders, and ensuring credibility with stakeholders. Transaction costs internal to companies can also inhibit companies from developing and implementing an environmental strategy. Companies may not adopt value-enhancing innovations because managers lack sufficient information and incentives to implement them. Company culture and structures that enhance the flow of information across functional units and incentivize innovation can increase the effectiveness of value-enhancing environmental improvements. Effective chief sustainability officers enhance communication across functional units. Understanding strategic resources’ role in developing and implementing environmental strategy helps identify when a company is ill-suited for what otherwise appears to be a promising environmental opportunity.

With the shift to a post-industrial, service, and information-based economy, many more jobs are now defined by distinct features of a psychosocial work environment, rather than by material conditions. Accordingly, theoretical models derived from the social and behavioral sciences are required that identify health-adverse stressful aspects of work within organizations. Using a set of quality criteria, this chapter analyzes the similarities and differences of four such models, selected on the basis of available international research evidence. These models are termed ‘demand-control’, ‘effort-reward imbalance’, ‘organizational justice’, and ‘job demand-resources’. Their explanatory contribution, assessment, strength of empirical evidence, and policy impact are compared, and differences are emphasized in terms of their conceptual focus and stress-theoretical basis. Given some overlap, potential benefits of combining these different notions are also discussed, as health effects of cumulative exposure are of interest. In a final section, future considerations point to the need for innovative theoretical developments in view of new challenges of globalized, technologically advanced work and in times of new health hazards, such as Covid-19. Importantly, scientists are expected to contribute to the reduction of a substantial gap between available scientific knowledge and its implementation into practice.

A green product is differentiated from similar products through an augmented sustainability feature, such as being produced with less environmental harm of having a smaller environmental impact upon disposal. The case of Stonyfield organic yogurt and the company’s founders, Samuel Kaymen and Gary Hirshberg, illustrate the challenges of selling green products. Green products need to offer co-benefits to garner consumer demands. A co-benefit is a functional, emotional, or social value that a recipient receives along with the product’s environmental benefits. Stonyfield’s organic yogurt offered consumers health and warm-glow emotional co-benefits stemming from the lower pesticides used in its production. Certifications and brands can play important roles in assuring customers that a green product’s promised benefits are genuine. Stonyfield used organic certification and its own quirky brand to solve these credibility challenges.

There are as many ways for companies to improve their environmental performance as there are stakeholders who are calling upon them to do so. If companies make the right choices, they can satisfy their stakeholders, enhance their financial position, and improve environmental conditions. The wrong choices invite stakeholder scorn and risk wasting valuable resources. This chapter outline the environmental strategy framework that can guide a company’s choices and help achieve wins across the triple bottom line. Effective environmental strategy (1) identifies which dimensions of environmental performance improvements can create business value; (2) establishes channels for transferring value from appreciative stakeholders; (3) ensures the company and its stakeholders have credibility with each other; and (4) positions the company for capturing sustainable financial value from its environmental improvements. This framework can help companies choose when and how to implement environmental improvements and scholars to identify the conditions under which companies’ environmental improvements are financially sustainable.

All interactions, including those of an economic character, emerge in the social environment. From the perspective of organised social relations, this environment is subject to certain institutionalisation processes, which means that certain forms of behaviour become universal in a given community or society and reflect the commonly shared social norms. The plethora of institutionalised human interactions and relations between entities, communities and customers is the outcome of the diversity inherent in the roles individuals and organisations can have, among other things. The social environment is therefore created by the intermingling norms and subsequent behaviours shaped through family influences, belonging to a profession or to a particular business entity, or being an entrepreneur creating jobs. Such a situation implies a certain hierarchy, where social status can be the outcome of a natural authority, formal position, social capital, or ethnic background but can also be seen through the lens of economic position. Human existence, similarly to organisational activities, happens in the socio-economical fabric, where the social role played by businesses creates jobs and opportunities for development both at the individual level for employees and for shareholders and at the collective level for communities and economies.

A basic question pertaining to the social aspect of international business is therefore the question of whether international expansion and cross-border activities create growth, social, economic or even civilisational opportunities for development, and therefore whether they contribute to the well-being and common good of societies, communities and humans at large.

An attempt to answer this question calls for a two-fold perspective.

First, the net effects of international business should be considered, i.e. the effects related to the costs as well as the benefits for the host economy accepting FDI inflows and the effects related to advantages and disadvantages for the home economy—the source of FDI outflows.

Second, some areas of influence of transnational corporations are of highly strategic significance, not only social but also civilisational. Corporations largely control the pace of innovation, which is related to the dominant role of the private sector in financing R&D. Corporations can play a significant political role, seen through lobbying and different forms of influence on institutions and legislation, but also in political leadership, when corporations become powerful opinionmakers shaping state policies.