where firms sell functions, not products, to consumers (Stahel, this volume; Stahel, 1994). In such an economy, for example, an automobile company would lease cars to consumers but remain responsible for the maintenance of the vehicle and all aspects of material management, from choice of inputs, routine maintenance, materials, and lubricants, to recycling the materials once the car was retired from service.

Thus, product-take-back systems and the functionality economy imply a significantly expanded firm in many cases.6 This expansion could take the form of virtual firms, formed through contractual arrangements to provide direct primary customer interfaces, or of industry consortia, formed to establish standards of performance and design. In some societies, such as Japan with its virtual integration of different firms in keiretsu, the existing economic structure is such that this may not be a problem. In other societies, such as in the United States, it could be a substantial change from the status quo, posing significant legal (e.g., antitrust) and political challenges. The pressure on larger commercial entities, which can be made responsible for their impacts broadly through time and space, is apparent and will undoubtedly increase given the global scope of commerce and the recognition that many environmental concerns are also global.


Even within the constraints of existing profit-satisfying behavior, private firms' behavior is already changing significantly as a result of environmental trends and regulations. Firms routinely adjust to external and internal stimuli, especially customers and each other. The question is not whether change will occur; the question is how fundamental that change will be, especially as evolutionary change may well make more fundamental change less problematic.7

There are many examples of the evolution of the private firm in response to environmental stimulus. Corporate environmental codes of behavior, both at the firm level and at the trade-group level, have proliferated. Examples include the Principles of the Business Charter for Sustainable Development developed by the International Chamber of Commerce in 1991 and the Responsible Care Program and Product Stewardship Code developed by the Chemical Manufacturers Association (CMA) in the United States. Elements of these codes begin to reflect the trends discussed above. For example, the CMA Product Stewardship Code includes a requirement that CMA members encourage distributors and direct product receives to implement proper health, safety, and environmental practices, an indirect extension of the CMA member firm into the customer chain resulting directly from the desire to improve the life cycle impacts of the product (in this case, at the use stage). Other trade-group activities include the development of guidebooks for environmentally preferable technologies and practices, such as the American Electronics Association's DFE manual, which is aimed at institutionalizing

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