Historical Origins of Environmental Sustainability in the German Chemical Industry, 1950s-1980s

This working paper examines the growth of corporate environmentalism in the West German chemical industry between the 1950s and the 1980s. German business has been regarded as pioneering corporate environmentalism after World War II. In contrast, this study reveals major commonalities between the sustainability strategies of leading German and American firms until the 1970s. However during that decade the German firms diverged from their American counterparts in using public relations strategies not only to contain fallout from criticism of their pollution impact, but also to create opportunities for changes in corporate culture to encourage sustainability. While the U.S. chemical industry remained defensive and focused on legal compliance, there was a greater proactivity among the German firms. This paper stresses the importance of regional embeddedness of leading firms in the state of North Rhine-Westphalia, which made their reputations especially vulnerable to criticism. The research supports organizational sociology theory, which has identified the importance of visibility in corporate green strategies. The German chemical firms were pioneers in understanding that investing in environmental sustainability could provide an opportunity to create value for the firm by delivering both commercial and reputational benefits.