Environmental technical and administrative innovations in the Canadian manufacturing industry

This paper explores whether the adoption of an EMS and/or TQM, both administrative innovations, lead to the development of cleaner technological innovations. We draw on the stakeholder influence literature and Daft's (1978) dual core model of organizational innovation to determine the factors affecting a facility's decision to undertake cleaner technological innovations. Using Canadian facility level manufacturing data, we find that an EMS reduces the likelihood that a facility will implement environmental technologies that change the production process (clean technologies) while TQM increases the likelihood that the facility will implement clean technologies. We also find that administrative pressures (corporate headquarters and shareholders/investors) have no impact on technological innovations while external stakeholders such as regulators, community groups and environmental groups as well as customers and suppliers each increase the likelihood that facilities will use cleaner technologies. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Modeling the Impacts of Corporate Commitment on Climate Change

The aim of this paper is to propose an integrative framework for understanding the determinants of business strategies to reduce greenhouse gas emissions and the impact of these determinants on performance. The proposed structural equation model is based on a survey of 319 Canadian manufacturing firms. The study calls into question the traditionally positive relationship between a firm's environmental commitment and its economic motivations. However, the results also show a win–win relationship between the commitment to reduce greenhouse gas emissions and financial performance. This study contributes to the understanding of the motivations underlying the efforts manufacturers make to tackle climate change and their economic benefits. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

Meeting the environmental challenge: a case of win–win or lose–win? A study of the UK baking and refrigeration industries

The idea that what is good for the environment is good for business has come to dominate environmental thinking and provides one of the cornerstones of ecological modernization. Studies of this win–win philosophy have tended to concentrate on large companies. This study considers how the UK refrigeration and baking industries have responded to the main drivers for change. By eliciting managers' views of environmental issues through semi‐structured interviews, the problems and opportunities facing these two industries are explored. The responses were remarkably similar, given the different characteristics of the two industries. The interviews revealed that legislation maintains its pre‐eminence as a motivation for change. Win–win situations arising out of environmental legislation were found in some SMEs; however, for most the perception was one of lose–win. The demand for environmental products and processes, necessary for win–win, has yet to materialize. Companies, therefore, remain driven by the commercial, rather than the environmental, imperative. Copyright © 2004 John Wiley & Sons, Ltd and ERP Environment.     

The product‐market performance benefits of environmental policy: Why customer awareness and firm innovativeness matter

Researchers have widely studied the nexus between corporate environmental (“green”) policy and its green performance and firm financial performance, but with mixed findings. A potential explanation for these mixed findings is the focus of extant studies on the direct and immediate impact of environmental performance on financial performance to the exclusion of firm‐specific boundary conditions. Furthermore, all prior research study the effect of environmental performance on either stock market‐based performance measures (i.e., stock return) or accounting‐based performance measures (i.e., return on assets). A missing third dimension of firm performance, product–market‐based performance (i.e., market share), has so far remained unexplored despite representing a crucial objective when innovating. Using Newsweek's annual green ranking as a novel measure of environmental performance for a panel of U.S. firms from 2010 to 2015, this paper attempts to fill these voids in the literature. The results show a positive relationship between firms' environmental performance and market share as a measure of product–market‐based performance. The findings further demonstrate that this relationship is positively moderated by the level of customer awareness and innovativeness of the firm: The higher the level of awareness of a firm's environmental credentials and innovativeness, the stronger the effects of environmental performance on market share. Our results are robust against endogeneity concerns and alternative measures of firm financial and environmental performance.     

Do stakeholder groups influence environmental management system development in the Dutch agri‐food sector?

This paper presents the results of a survey that included 492 companies in the Dutch agri‐food sector with respect to the influence of stakeholder groups on the companies' level of environmental management system (EMS) implementation. It is concluded that primary stakeholders (government, clients) are more relevant for EMS development than secondary stakeholders (such as environmental organizations). The results suggest that small and medium‐sized companies are able to accommodate to demands with respect to the implementation of internally oriented care systems (I‐EMSs). I‐EMSs focus at the single firm or location. In general, they are predominantly influenced by governmental and other ‘non‐commercial’ stakeholder groups. For the implementation of externally oriented EMSs (E‐EMSs), which focus on the supply chain and network, qualitative rather than quantitative relationship characteristics between companies and the government are important. Moreover, commercial stakeholder groups (such as suppliers, clients and competitors) influence E‐EMS levels significantly. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Factors influencing the quality of corporate environmental disclosure

Many firms choose to communicate their environmental strategies through voluntary environmental disclosures. This paper examines patterns in the quality of voluntary environmental disclosures made by a sample of around 450 large UK companies drawn from a diverse range of industrial sectors. The analysis distinguishes between five facets of quality, including the disclosure of group‐wide environmental policies, environmental impact targets and an environmental audit. We examine how the decisions firms face regarding each facet of quality are determined by firm and industry characteristics, and find the quality of disclosure to be determined by a firm's size and the nature of its business activities. Specifically, we find high quality disclosure to be primarily associated with larger firms and those in sectors most closely related to environmental concerns. In contrast to several recent contributions, we find that the media exposure of companies plays no role in stimulating voluntary disclosures. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Can environmental governance lower toxic emissions? A panel study of U.S. high‐polluting industries

Firms have increasingly adopted environmental governance mechanisms in the form of environmental compensation and environmental board committees. The current study examines the argument that such environmental governance mechanisms contribute to lower toxic emissions in high‐polluting industries. The sample comprises firms that were part of the S&P 500 from the years 2006 to 2011 and were mandated to report toxic emissions to the U.S. Environmental Protection Agency under the Toxic Release Inventory program. A panel regression model with propensity score matching was employed to minimize endogeneity bias. The results indicate that environmental compensation is a compelling incentive to motivate managers to invest in long‐term and highly uncertain environmental projects. Likewise, the presence of an environmental board committee appears to be significant, suggesting that directors contribute to a firm's strategy with their expertise and political influence. This research also found evidence supporting the cumulative adoption of both environmental governance mechanisms in enhancing environmental performance and the firm's legitimacy.     

Environmental Policy in the Nordic Wood Product Industry: Insights Into Firms’ Strategies and Communication

The purpose of our study is to explore how companies operating in the Nordic wood products value chains currently use environmental performance measures in their environmental policy and communication with stakeholders. Apart from the regularly‐used environmental management certificates, the ability of wood material to store carbon and the use of sustainable forest management certificates open up interesting strategic options for firms in the implementation of their environmental policy. The primary was collected through thematic managerial interviews in 2011 from 37 companies in Finland, Sweden and Norway, of varying size, roles in the value chain, conditions for green business practices and exports. Forest certification and environmental management systems were frequently used, but managers did not always perceive them to be useful, particularly for raising environmental awareness at the final consumer level. Nevertheless, the general attitude towards using environmental performance measures was seen as positive. Companies with a business‐to‐business orientation were the most proactive in terms of environmental communication, whereas companies in consumer markets were more reactive. The key stakeholders targeted for environmental communication were value chain partners and the authorities, and only to a lesser degree employees and environmental non‐governmental organisations. The key strategic role of environmental management and communication appeared to be securing the firms against negative environmental claims. The Nordic wood industry could improve their communication if the strategic orientation is shifted from the forest certification to the use of generic eco‐labels, and most of all, to the adoption of quantitative measures like carbon footprints and environmental product declarations. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment.     

Environmental management systems and green supply chain management: complements for sustainability?

Some researchers question the legitimacy of EMSs since organizations can claim to have one when in fact they make no attempt to reduce their environmental harm. In instances where EMSs enhance an organization's environmental performance, critics argue that improvements are likely to occur within the organization's operational boundaries rather than being extended throughout the supply chain. However, previous research suggests that the organizational capabilities required to adopt an EMS may facilitate GSCM implementation and the institutional pressures to adopt both management practices are similar. Consequently, EMS adopters may have a greater propensity to expand their focus beyond their organizational boundaries and utilize GSCM practices to minimize system‐wide environmental impacts. This research illuminates the debate by empirically evaluating the relationship between EMS and GSCM practices. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Contrasting Institutional and Performance Accounts of Environmental Management Systems: Three Case Studies in the UK Water & Sewerage Industry*

abstract This paper presents results from a longitudinal, qualitative study into the adoption of environmental management systems (EMS) in three companies in the UK water & sewerage industry. Based on institutional theory and the literature on EMS, four factors related to the adoption of EMS are identified: external and internal institutional forces, environmental performance issues, and economic performance issues. While previous literature has often assumed a balance of performance and institutional factors or a preponderance of performance factors, the results of this study indicate that institutional forces are the predominant drivers. The results further indicate that environmental performance issues become less important over time, whereas institutional drivers and economic performance rationales increase in importance over time. While conforming to institutional pressures can result in improved economic performance of a company, adoption of environmental management systems mostly on the basis of institutional and economic factors has wider repercussions for the state of corporate environmental management and progress towards greater ecological sustainability of business.     

Driving sectoral sustainability via the diffusion of organizational eco‐innovations

Using insights from institutional literature, the resource‐based theory of the firm, and internationalization, we explain variations in the diffusion of organizational eco‐innovations. Studies have previously reported that the drivers of eco‐innovation are regulatory pressures, technology push, market pull, and firm factors. But relatively little attention has been paid to nontechnological forms of eco‐innovation, such as environmental management systems (EMS). Consequently, how exactly to encourage EMS adoption across sectors is still unclear. We attempt to address this question by combining sectoral panel data (2009–2014) from a number of sources in Spain. The econometric analysis reveals that environmental policy is driving the adoption of ISO 14001 largely due to differences across sectors in energy and pollution intensity. In addition, the adoption of ISO 9001 increases the use of ISO 14001 in industry because of complementarities between the two systems. Third, in highly internationalized sectors, firms adopt a greater amount of ISO 14001.     

Sustainable environmental practices and financial performance: Evidence from listed small and medium‐sized enterprise in the United Kingdom

In this article, we investigate the financial implication of sustainable environmental practices on UK small and medium‐sized enterprises (SMEs)–traded firms. Existing literature indicates that there is a direct relationship between sustainable environmental practices and financial performance. However, studies looking at this relationship have focused mainly on large firms with little attention paid to SMEs. Further, those looking at environmental and financial performance relationships have often used a single measure of performance in their studies. This study bridges these research gaps by focusing on listed SMEs in the United Kingdom using multiple measures of sustainable environmental policy indices on a panel of 201 SMEs on the Alternative Investment Market from 2011 to 2016. Evidence from our panel data analysis suggests significant and a nonlinear (concave) relationship between sustainable environmental practices and firms' financial performance. Specifically, energy efficiency practices, greenhouse gases, material, and resource efficiency revealed an inverted U‐shaped relationship with financial performance. The results will offer guidance to management in terms of allocating resources to sustainable environmental practices investment.     

Stakeholder pressure for sustainability: Can ‘innovative capabilities’ explain the idiosyncratic response in the manufacturing firms?

This study explores role of innovative capabilities in determining a manufacturing firm's response to stakeholder pressure for adopting sustainable practices. Drawing on the theory of conservatism, we delineate that the firm's response is idiosyncratic and undergirded in the nature of its innovative capabilities. Our empirical investigation reveals that the response to the stakeholder pressure is mediated by the nature of the firm's innovative capabilities. Indian manufacturing firms are identified as unit of analysis for this study. The individual manufacturing facilities implement the environmental practices. The findings suggest that the manufacturing firm's exposure to exploitative/exploratory innovative capabilities triggers sustainable behaviours with ephemeral focus and enduring focus. Further, the exploratory/exploitative innovation is capable of explaining idiosyncratic behaviour for the firms' sustainability practices adoption. The findings delineate, with analysis, that unlike China, regulatory stakeholder pressures in India inhibit the adoption of sustainable practices with enduring focus in manufacturing firms.     

Sustainable development and financial institutions: Do banks' environmental policies influence customer deposits?

This paper investigates the relationship between the environmental policies taken by financial institutions and the choice of depositors on where to save their money. Prior research has shown that increases in the number of customers making deposits are driven by bank pricing policy and switching costs for depositors. By employing a dynamic panel data model, this study empirically tests how environmental performance influences the depositors' choice on where to put their money in a sample of worldwide financial institutions from 2011 to 2018. The main results suggest that there is a negative relationship between banks' environmental performance and customers' deposits. Furthermore, the banks that are the best at managing carbon emissions and at pursuing sustainable development pay lower interest rates on customer deposits.     

Exploring environmental,social, and governance disclosure effects on the S&P 500 financial performance

Much of the literature measuring the relationship between environmental, social, and governance (ESG) scores and firm performance treats the score as a measure of sustainability performance. In this study, we treat a firm's ESG score as a demonstration of strategic choice in the level of transparency that results in increased firm performance as measured by Tobin's Q and return on assets. Performance differences are a result of choice moderated by the size of the firm as measured by employees and sales. We analyze 467 firms in the S&P 500 from 2009 to 2015. Applying legitimacy and stakeholder theory, we find that there is significant difference between groups with respect to disclosure and performance. The results of quartile analysis by sales, capitalization, and Tobin's Q are relevant to understand the influence that the ESG score has on financial performance. ESG influences on Tobin's Q are greatest for large firms as measured by sales, as opposed to the ESG affects on Tobin's Q and return on asset for smallest firms as measured by market capitalization.     

Institutional Constraints,Stakeholder Pressure and Corporate Environmental Reporting Policies

Within the theoretical framework of socio‐political economics, and more specifically of stakeholder theory, this work examines whether companies operating under different institutional constraints and stakeholder pressure tend to emphasize different models of corporate environmental reporting. Furthermore, the paper tests whether different corporate environmental reporting policies are driven by the countries' corporate governance systems. A sample of 3931 international companies was examined through a logistic biplot and conditional mean linear regression models. The main results reveal that companies follow two distinct environmental reporting approaches, which depend on specific stakeholders and institutional requirements. The first model, which is followed by firms within codified law countries, mostly focuses on water and emissions. The second approach, mainly followed by companies operating in common law countries, emphasizes materials and energy issues. This finding reveals that companies gradually modify their environmental strategies to make themselves more compatible with the characteristics of the social and institutional environment, which will result in several corporate benefits. The paper provides several outstanding implications for companies' strategic managers, national institutions and firms' stakeholders, especially for investors and customers. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Sustainable tourism in Greek islands: the integration of activity‐based environmental management with a destination environmental scorecard based on the adaptive resource management paradigm

Tourism is a major industry that can lead to economic gains as well as to degraded environment and social infrastructure. Tourism has the potential to destroy the available common environmental resources through overuse and poor management practices, as limited information disclosure and poor monitoring of actions encourage the perpetuation and extension of environmental problems. Based on the adaptive resource management paradigm for addressing problems related to the use of the commons, this paper suggests a methodology for the development of a management tool that can provide island hotels with a continuous flow of timely, relevant, accurate and objective information on the environmental impact of critical corporate activities. The tool, named the destination environmental scorecard (DES), draws on activity‐based management concepts and can help local hotel SMEs measure and compare their performance against certain standards and thus conduct operations in a responsible and measurable way to the benefit of both business financial performance and regional sustainability. The paper presents the DES operational characteristics and the potential benefits from its implementation. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Out of the Cold – the Rising Importance of Environmental Management in the Corporate Governance of Russian Oil and Gas Producers

Oil and gas producers play a pivotal role in the Russian economy. The industry itself is very energy consuming and capable of producing major environmental damage. For a long time, however, innovative ways of production were low on their priority list, leading to heavily outdated equipment and hardware. Recently, Russian oil‐ and gas producers have kicked off major programs to catch up with their western counterparts. Until now, however, insights into the importance of environmental management of oil and gas producers are very limited. We studied the annual reports and environmental reports of the six most prominent industry actors between 2008 and 2010 and analyze their changing approaches to green management. Most companies start in 2009 to address their environmental activities in the statement of the CEO and chairmen. In 2010, the environmental activities have made it up to the list of top priorities in the companies. On an industry‐level, we find that management's own initiatives drive companies' adoption of greener production technologies and are much more influential than government regulation. In fact, we see that leading industry actors inform government regulation and thereby lift up the greening of production also in late followers. Green innovation either stems from international cooperation for industry leaders or out of in‐house knowledge generated through own R&D institutes. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

Environmental management practices and financial performance using data envelopment analysis in Japan: The mediating role of environmental performance

This study investigates the relationship between environmental management practices (EMPs) and financial performance (FP) and consequently ascertains whether environmental performance (EP) can mediate the EMPs–FP nexus. Distinctly using data envelopment analysis and generalised method of moments techniques to analyse a comprehensive dataset of Nikkei 225 listed firms from 2007 to 2018 (1920 firm-year observations), our findings first suggest that EMPs have a positive effect on FP. Second, the desired EP can be achieved through the adoption of comprehensive EMPs. Third, improved EP has a substantial impact on shaping the EMPs' effect on FP. These findings are consistent with the predictions of resource-based view and institutional theories. The results are robust to controlling for different types of alternative measures and endogeneities. The findings have important implications for academics, investors, managers, policymakers and regulators.