Environment and employment: is there a prize for clean play?

Ester Martínez-Ros, University Carlos III de Madrid

Including objectives to reduce environmental impact in business strategies not only improves a company’s reputation, it also contributes to the creation of quality employment. This study analyses how companies that introduce “green” innovation into their corporate strategy generate more employment than non-innovative companies or those whose innovations are not environmentally-oriented. Moreover, it is observed that this positive effect on employment is even greater in industries considered more contaminant. These results are especially relevant in a context in which both the environment and the generation of employment are public priorities.
Key points
  • 1
       The study concludes that investment in green innovation represents an opportunity to tackle the problem of unemployment in Spain.
  • 2
       Even at times of crisis, companies that include concern for the environment as a strategy and that innovate in line with this principle show an average employment level that is not only higher but also grows.
  • 3
       At present, investments in eco-innovation are mainly assigned to complying with environmental standards, but not to the direct transformation of companies to use clean technologies through important changes in the production process (for example, favouring lower use of energies and materials).
  • 4
       Nonetheless, voluntary adherence to eco-innovative objectives is a predictor of increases in employee numbers.
Total employment according to type of company
Total employment according to type of company

The data show that companies that have been investing in eco-innovation have generated the most employment in recent years, even during the toughest years of the recession. Regression analysis using data from the Technological Innovation Panel survey concludes that the presence of eco-innovations is associated with increases in employment levels, and that this effect is multiplied in companies situated in sectors considered more contaminant. All these results do not appear in those companies that simply do not innovate.

On the other hand companies related with clean industries enjoy a better image due to their lesser environmental impact; therefore companies that belong to more contaminant industries feel a greater need to differentiate themselves. The introduction of green technologies by these companies means that they are perceived as more sustainable. For this reason, society responds in a more positive and receptive way when green innovations are introduced by companies from highly contaminant sectors, which in turn, produces an increase in their competitive advantage in the market.

 

 
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Ester Martínez-Ros, University Carlos III de Madrid

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Thematics

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