The level of compliance with the International Code of marketing of breast-milk substitutes: does it matter to stock markets?

The present paper explores, theoretically, and empirically, whether compliance with the International Code of marketing of breast-milk substitutes impacts on financial performance measured by stock markets. The empirical analysis, which considers a 20-year period, shows that stock markets are indifferent to the level of compliance by manufacturers with the International Code. Two important issues emerge from this result. Based on our finding that financial performance as measured by stock markets cannot explain the level of compliance, the first issue refers to what alternative types of mechanisms drive manufacturers who comply the least with voluntary codes such as the International Code. Conversely, from our finding that stock markets do not reward the most compliant, the second issue raised is an inherent weakness of stock markets to fully incorporate social and environmental values.

Allocating community-level payments for ecosystem services initial experiences from a REDD pilot in Tanzania

Payments for ecosystem services (PES) typically reward landowners for managing their land to provide ecosystem services that would not otherwise be provided. REDD—Reduced Emissions from Deforestation and Forest Degradation—is a form of PES aimed at decreasing carbon emissions from forest conversion and extraction in lower-income countries. A key challenge for REDD occurs when it is implemented at the community rather than the individual landowner level. Whilst achieving this community-level reduction relies on individuals changing their interaction with the forest, incentives are not aligned explicitly at the individual level. Rather, payments are made to the community as a single entity in exchange for verified reduced forest loss, as per a PES scheme. In this paper, we explore how community level REDD has been implemented in one multiple-village pilot in Tanzania. Our findings suggest that considerable attention has been paid to monitoring, reporting, verification, and equity. Though no explicit mechanism ensures individual compliance with the group PES, the development of village level institutions, “social fencing,” and a shared future through equal REDD payments factor into community decisions that influence the level of community compliance that the program will eventually achieve. However, few villages allocate funds for explicit enforcement efforts to protect the forest from illegal activities undertaken by outsiders.