Paul Lanoie wins the "Finance and Sustainability" European Research Award

October 15, 2012

Professor Paul Lanoie (Applied Economics) is the main author of the article that recently won the "Finance and Sustainability" European Research Award in Paris, in the research paper category. Created in 2005 by the French Social Investment Forum (SIF), a multipartite French association, the prestigious award comes with a 5,000-euro prize. Since last year it has been awarded jointly by the SIF and Principles for Responsible Investment (PRI), an international investors network. The award goes to the best article on the theme of responsible investment published in the past two years and of which at least one author is European.

The winning article, entitled “Environmental Policy, Innovation and Performance: New Findings on the Porter Hypothesis,” was co-written with Jérémy Laurent-Lucchetti (PhD, HEC Montréal and Professor at HEC Geneva), Nick Johnstone (economist with the Organisation for Economic Co-operation and Development – OECD) and Stefan Ambec (Professor at the Université de Toulouse). It was published in 2011 in the Journal of Economics and Management Strategy (20(3), 803-842).

According to Strategy Professor Michael Porter, of the Harvard Business School, strict but well-targeted environmental regulations can trigger innovation and encourage firms to make more efficient use of their resources and energy, and so become more profitable. This counter-intuitive hypothesis has given rise to much debate in the economic and management literature. The researchers wished to take another look at the theory and conducted the most complete empirical study of the subject to date. Their analysis drew upon an extensive OECD database that includes observations from some 4,200 facilities in 7 countries. Then they applied an econometric method to selected data, allowing them to test the causality links between the perceived severity of environmental regulations, investment in environmental R&D, and economic performance.

The authors showed a positive link between the severity of the regulations and innovation, as posited by Porter in the first part of his hypothesis. However, this effect does not translate into better commercial performance.

Professor Lanoie holds a PhD in Economics from Queen’s University. At HEC Montréal, he is Director of Academic Affairs, a Full Professor attached to the Institute of Applied Economics and a member of the Groupe de recherche interdisciplinaire en développement durable.