What We Know About Environmental Policy: An Inductive Typology of the Research

Environmental performance is a multidimensional concept that is difficult to measure since it concerns the pollution generated by companies, their energy consumption and their different environmental policies. Academic research has used objective and/or non‐objective indicators to measure this performance, dealing with both its managerial and measurement dimensions. This paper provides an inductive typology of the academic work concerning environmental policy through a computerized content analysis of 151 articles from 1992 to 2014 related to the management and measurement of environmental performance. The results highlight four major themes around which the academic research is organized: the relationship between environmental and financial performance, environmental performance under stakeholder engagement and institutional pressures, the strategic management of environmental performance, and increasing awareness of the sustainable development issue. Environmental performance research has evolved from a quantitative towards a more managerial dimension, highlighting the integration of performance within the management of a corporate business strategy. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment     

Defining Eco‐efficiency: A Case Study on the Finnish Forest Industry

Environmental reporting is a tool of corporate environmental management that can also be used as research material. The aim of this paper is to produce a comprehensive definition of eco‐efficiency based on the literature and then compare it with definitions identified in the environmental reports published by selected companies. In addition, this paper presents a conceptual framework of the relationship between environmental and economic performance in the companies. Three Finnish companies in the forest industry are selected as case companies. This analysis reviews environmental reports published by the companies from 1998 to 2007. In short, eco‐efficiency can be seen either as an indicator of environmental performance, or as a business strategy for sustainable development. The case companies very seldom give an exact definition of eco‐efficiency in their environmental reports. However, different aspects of eco‐efficiency are often referred to. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

Applying the reduce,reuse, and recycle principle in the hospitality sector: Its antecedents and performance implications

Although the literature on eco-friendly strategies followed by firms is abundant, the focus on the reduce, reuse, and recycle (3Rs) policies as the cornerstone of environmental sustainability is scarce. This study examines the 3Rs environmental strategy among 143 large organizations in the hospitality industry. We use the resource-based view (RBV) of the firm theory to test the strategy's determinants and its impact on business performance on a suggested conceptualization level. As hypothesized, green corporate governance and environmental management systems, along with slack financial resources, were found to positively influence the adoption of a 3Rs environmental strategy. In turn, the implementation of the latter leads to superior business performance, measured in terms of operating profits and Tobin's Q. The study has several implications on a theoretical, managerial, and public policy level where intriguing directions for future research are provided.     

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.     

Integrating Environmental,Social and Governance (ESG) Disclosure for a Sustainable Development: An Australian Study

Addressing environmental, social and governance (ESG) issues has become a critical part of business strategy. This article explores the extent of ESG reporting of metal and mining sector companies listed in the Australian Securities Exchange to determine the nature of ESG indicators in use in the sector. The current study argues that stakeholder engagement is the key to enhance company environmental policy and sustainable development. According to the results of this study, ESG reporting motives are highly influenced by reporting regulations. Given the diversity in reporting of ESG, comparability of ESG strategic performance is problematic. This study contributes towards developing an ESG disclosure index, which companies could use as a legitimacy tool that external stakeholders could use to reliably measure and compare the ESG performance of companies. It also reveals there is an increased demand for more empirical research on integration of sustainability into strategic planning process. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

Being ‘Green and Competitive’: The Impact of Environmental Actions and Collaborations on Firm Performance

In this paper, we seek to enhance the understanding of the link between environmental management and firm performance, so contributing to the debate of being “green and competitive”. Relying on the resource‐based view, we study the effect of different environmental management capabilities on a firm's market and image performance. In particular, we analyze the capabilities to implement product and process‐related environmental actions with different types of environmental focus (materials, energy, pollution) and the capabilities to develop environmental collaborations with different types of actors (both business actors and non‐business actors). To this aim we conducted a survey on 122 Italian companies. Results show that market performance and image performance have partially different antecedents. Specifically, a firm's market performance is positively affected by the capabilities to implement environmental actions with a focus on energy and pollution and to develop environmental collaborations both with business and with non‐business actors. On the other hand, a firm's image performance is positively affected by the capabilities to implement environmental actions with a focus on materials and to develop environmental collaborations with non‐business actors. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Environmental business strategy: the Portuguese case

This study focuses on the adoption of environmental management systems and corporate social responsibility reporting as mechanisms for creating a differential advantage, looking at how different stakeholders in an organization perceive the importance of instituting these mechanisms as determinants of market success. The paper then aims to focus on environmental business strategy and corporate social responsibility reporting in companies, rather than prescribing policy for the entire sector. In so doing it postulates that compliance with market requirements on environmentally related issues, by instituting proper environmental management mechanisms and corporate social responsibility reporting, is a pre‐requisite for acceptance of the firm and its products in the market. The paper is methodologically based on a set of 60 interviews conducted with various agents in the Portuguese textile industry, ranging from policy‐makers to industrialists and NGOs, with a view to determining differences in perception between the various stakeholders. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Small and Medium‐Sized Enterprises and Sustainability: Managers' Values and Engagement with Environmental and Climate Change Issues

This article reports on an in‐depth, qualitative study into the pro‐environmental engagement of small businesses in the east of England, with respect to climate change in particular. Managers of environmentally pro‐active small businesses were asked about the pro‐environmental measures they had implemented in their firms, their motivations for doing so, and their understanding of climate change. The managers in this study had a relatively good understanding of environmental issues in general and climate change in particular, and had implemented a range of pro‐environmental measures in their firms. Their understanding of climate change was a holistic one, which sat within their overall understanding of environmental and social issues. While economic arguments and external pressure played a role in their pro‐environmental engagement, perhaps the most notable motivation for managers in this study to engage with environmental and climate change issues was personal values and beliefs. Environmentally engaged managers exhibited an internal locus of control. Some of these findings contrast with the views of key informants in local government and business advice organisations, who tend to emphasise the business case and cost arguments when trying to encourage small businesses towards greater environmental engagement. These findings suggest that public policy and business advice in this area should perhaps focus more strongly on personal values and a sense of being able to contribute to environmental protection in their engagement with small businesses. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

Sustainability reporting,materiality, and accountability assessment in the airport industry

Air travel is, nowadays, recognized as being one of the most popular modes of transport. Air transport is among the most significant contributors to the world gross domestic product and is accountable for a great environmental and social impact. Driven by the well‐established sustainability discourse and the vital role businesses can play in disseminating the sustainable development concept, this paper attempted to map airport industry's most material operational aspects and assess airport operators' accountability level on disclosing corporate information regarding airports' economic, environmental, and social performance. In this context, 33 reports and 903 material issues representing 193 international airports were reviewed and assessed, and a methodology for benchmarking the accountability level of best reporting airport operators was developed, showcasing materiality assessment as a useful management tool for strengthening airport operators' business strategy and enhancing their corporate performance. The paper indicated that (a) customer focus (i.e., health, safety and satisfaction), economic viability, and business continuity and preparedness are operational aspects of high materiality and (b) the disclosure level, especially concerning specific performance indicators, is still moderate. In conclusion, this study has shown that materiality assessment gains ground as a management tool among airports' management teams and the completeness of Sustainability reports is positively correlated with the “level” of adherence as described by the Global Reporting Initiative.     

Analysis of Shared and Sustainable Value Creation of Companies Providing Energy Solutions at the Base of the Pyramid (BoP)

This study was conducted to analyze the shared and sustainable value creation (SSVC) of 33 energy companies selling energy solutions at the base of the pyramid (BoP) markets. SSVC by selling energy technology solutions directed to address the cooking and lighting needs of BoP consumers were the main focus of analysis. Result showed that achieving profitability and affordability is affected by the kind of energy solution that is offered as well as the investment and level of commitment required. However, companies that fulfilled the profitable and affordable solutions were also able to deliver social and environmental sustainability benefits. Social sustainability benefits point to the ability of alleviating poverty by improving productivity or offering cost‐savings. Environmental sustainability benefits point to the energy savings. The findings show that inclusive business strategy is not necessarily required to reach the poor people profitably but a suitable business strategy depends on the type of energy solution. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

The role of project management maturity and organizational culture in perceived performance

This study investigates whether project management maturity (PMM) relates to perceived organizational performance and how an organization's cultural orientation is a contributing factor. Perceived organizational performance is defined as project effectiveness and efficiency followed by resulting business performance. A survey‐based research was conducted with 86 project professionals from various U.S. service and manufacturing organizations. The study revealed that PMM is significantly related to business performance but not to project performance. Furthermore, while clan organizational culture is a sole contributing factor for project and business performances, PMM interacts with market culture in improving business performance. This study shows that in order to deal with project time, budget, and expectations issues, an organizational culture change toward sharing, collaboration, and empowerment is a must. Furthermore, an increasing project management maturity along with a results‐oriented organizational culture improves an organization's competitiveness, resulting in cost savings and increased sales. PMM efforts are therefore crucial. PMM accompanied by an understanding of cultural orientation is a best strategy for today's project‐based organizations.     

Consumer eco‐innovation adoption: assessing attitudinal factors and perceived product characteristics

For business and environmental reasons, increased understanding of green consumer behavior is essential. This paper addresses consumer adoption and non‐adoption of a high involvement eco‐innovation (the alternative fuel vehicle, AFV). The purpose is to integrate two research streams to explore factors driving and hindering adoption. The factors are rooted in environmental psychology research and the diffusion of innovation literature. Survey results on Swedish car owners are reported. The results indicate that adopters and non‐adopters differ on norms, attitudes, novelty seeking and on how innovation attributes are perceived. Furthermore, the results show that the groups rank car attributes such as fuel consumption and carbon dioxide emissions differently. The main contribution of the paper is the integration of norms and attitudes together with consumer adoption factors in analyzing green consumer behavior in relation to a high involvement product. The implications for business and marketing strategy and for environmental policy are discussed. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.     

Environmental considerations within manufacturing strategy: an international study

This paper examines the relative importance of environmental management in four key areas of manufacturing strategy: competitive priorities, action programmes, performance improvement and improvement goals. Its overall position in manufacturing strategy is measured through the creation of an original index using data from the 2001 International Manufacturing Strategy Survey (IMSS). Results show that in a minority of firms environmental management is positively positioned. The index's relationships with indicators of innovation and performance in manufacturing are examined. Some significant results include capabilities in the areas of strategy formalization, strategic fit and ISO14001 certification. While results are specific to the IMSS context, implications may be drawn for resource‐based view of the firm research on the application of resources and capabilities. An implication for policy makers is that the development of capabilities for strategy formalization and implementation should be incorporated into environmental policy. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.     

The business case for sustainability? An examination of small firms in the UK's construction and restaurant sectors

Studies show that despite a concerted attempt by UK policy‐makers to portray ‘eco‐efficiency’ measures as cost reducing, most owner‐managers of small firms view environmental measures as expensive to undertake. As a result, owner‐managers tend to be highly resistant to voluntarily improving their environmental performance. Given that SMEs are such a vast sector of the economy, this perceived discord between profits and environmental protection is clearly a major barrier to the ‘greening’ of industry. This ESRC‐funded study has sought to unearth the underlying motivations for why SME owner‐managers in the UK resist or accept the idea that there are business benefits for improving their environmental performance. The findings from 40 in‐depth interviews with SME owners in the UK's construction and restaurant sectors and 12 ‘key informants’ from industry and government are presented, followed by a discussion of SME perspectives on the ‘business case’ for sustainability and its implications for policy‐makers. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.     

Business strategy and firm efforts on environmental protection: Evidence from China

Although business strategy plays a fundamental role in firm operations, whether and how business strategy affects firms' environmental protection behaviors remain unclear. On the basis of a typical emerging market, we show that firms following prospector strategies take more environmental protection actions than do those following defender strategies. Our findings are robust to endogeneity checks and alternative measures of business strategy. We further find that prospectors engage in more environmental activities than do defenders when the degree of financial constraint or earning management is high. Our results are particularly pronounced in state‐owned enterprises, heavy‐polluting industries, and firms located in regions with strict environmental regulations. Overall, this study provides clear policy implications for regulators concerned with environmental protection.     

Changing Behaviour: Successful Environmental Programmes in the Workplace

There is an increasing focus on improving the pro‐environmental attitudes, behaviour and habits of individuals, whether at home, in education, travelling, shopping or in the workplace. This article focuses on the workplace by conducting a multi‐disciplinary literature review of research that has examined the influence of organization‐based behaviour change initiatives. The review includes only research evidence that measured actual environmental performance (e.g. energy use) rather than solely using self‐reported methods (e.g. questionnaires). The authors develop an ‘employee pro‐environmental behaviour’ (e‐PEB) framework, which contains individual, group, organizational and contextual factors that have predictive relevance across different behaviours and organizations. The review shows that the strongest predictors are environmental awareness, performance feedback, financial incentives, environmental infrastructure, management support and training. A key finding from this review is that attitude change is not necessarily a pre‐requisite for behaviour change in the workplace. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Banks' business strategy and environmental effectiveness: The monitoring role of the board of directors and the managerial incentives

The purpose of this paper is to investigate how banks' climate strategies affect environmental performance. To extend this line of research, the carbon disclosure of worldwide banks is examined. In particular, we focus on specific governance strategies: board of director monitoring and managerial incentives. Panel data are employed on a sample taken from 330 bank-year observations in the period after the financial crisis. The results show an increase in environmental performance through the implementation of managerial incentives related to climate change, associated with the highest level of responsibility of the board of directors. Overall, the present study contributes to both the academic literature and corporate governance, highlighting the importance of banks' business strategy on climate change risks and opportunities with respect to environmental performance goals.     

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.     

The Red Queen and the environment: reconciling public regulation and business strategy

Until the late 1980s, environmental regulation in Denmark was often carried out in an intensely politicized and confrontational climate marked by strong tensions between authorities and polluting firms. In recent years, however, the general spirit of regulation seems to have improved significantly. During this same period, ‘generic’ measures such as general discharge limits have been supplemented with more specific demands, tailored for individual companies. The present paper presents a case study based on the environmental regulation of TripleNine, a West Jutland fishmeal factory. In response to major changes in its market and regulatory environment, the firm has revised its general strategy and taken a more pro‐active stance on environmental issues, pursuing a policy of active co‐operation with local environmental authorities. Informed by this and other case studies, a theoretical model is developed to account for the incorporation of ecological concerns into firms' general business strategy. Against the background of this model, the paper addresses the long‐term possibilities of reconciling business strategy and public regulation in the future. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.