Meaning: The quote by Paul Hawken, an environmentalist, addresses the concept of local companies and their relationship to internalizing costs. Hawken suggests that local companies have a greater tendency to internalize their costs compared to larger corporations. This is due to the fact that the owners of local companies live in the community where their business operates, and therefore, they are more directly affected by the environmental and social impacts of their operations.

Hawken's statement highlights the idea that local companies are more likely to internalize their costs because the owners are personally invested in the well-being of their community. When a business internalizes its costs, it means that it takes responsibility for the negative externalities it creates, such as pollution, resource depletion, or social disruption, and seeks to minimize or mitigate these impacts. Internalizing costs can involve investing in sustainable practices, reducing waste, or contributing to community development initiatives.

The notion that local companies have a greater incentive to internalize their costs due to their close ties to the community is an important one in the context of sustainable business practices. It reflects the idea that businesses can and should play a role in promoting the well-being of the communities in which they operate, rather than solely focusing on maximizing profits at the expense of the environment and local residents.

Furthermore, Hawken's reference to the owners having to "show their face in town" and their children playing with other kids underscores the personal and social connections that local business owners have within their communities. These personal connections can create a sense of accountability and responsibility, as the actions of the business directly impact the lives of the people with whom they interact on a daily basis.

In the broader context of sustainability and corporate social responsibility, the concept of internalizing costs is a key consideration. It reflects the idea that businesses should account for the full environmental and social impact of their operations, rather than externalizing these costs onto society or the environment. By internalizing costs, companies can better align their business practices with the principles of sustainability, ethical behavior, and community well-being.

Local companies, by virtue of their close ties to the community, are in a unique position to internalize their costs and act as responsible corporate citizens. This can manifest in various ways, such as investing in renewable energy, implementing eco-friendly production processes, supporting local employment, or contributing to community development projects. These actions not only benefit the environment and local residents but also contribute to the long-term success and resilience of the business itself.

In conclusion, Paul Hawken's quote emphasizes the idea that local companies are more likely to internalize their costs due to the personal connections and accountability that come with operating within a community. This perspective underscores the importance of considering the broader environmental and social impacts of business operations and aligning them with the well-being of the community. By embracing the concept of internalizing costs, businesses can contribute to a more sustainable and responsible approach to economic development, benefiting both the local community and the business itself.