Business Ethics and Corporate Governance, Second Edition

PRODUCT DIFFERENTIATION

There is considerable scope to innovate through better environmental performance. A company can design better performing, higher quality or safer products. There may also be scope to modify the product so that there is higher resale value. If one or more of such conditions are met, the company may be in a position to charge a premium that more than recovers the costs incurred in improving environmental performance.

Industrial customers are often prepared to pay a premium for products with improved environmental performance if their (customers) own costs can be reduced. Some customers may also be prepared to pay a premium, if they consider the superior product to be a hedge against stringent environment regulations in the ...