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.     

A Fresh Approach to Context Influence,Development and Performance in Environmental Management

Respect for the environment has rapidly gained importance in the context of firms, regardless of their pollution levels. Most of the existing research has related to the most polluting sectors and has been limited to the effect that the adoption of cleaner practices has on performance, primarily in terms of operations, financial performance and competitiveness. This paper expands the research towards a more complete picture of environmental management by examining context, development and performance to understand how other factors can influence the development of cleaner practices. In addition, we focus our research on the service sector. In our analysis, we differentiated between the affiliation and size of the studied companies to better understand their specificities. Based on a sample of 374 restaurants, the results show the importance of the influence of institutions and the limited influence of competitors in encouraging firms to adopt a strategic, clean approach, especially for the smallest firms. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Sustainable Development in the Transport Sector: Influencing Environmental Behaviour and Performance

Sustainable Development and Environmental Policy are becoming increasingly important in the development of business strategies. Consequently, corporate road freight transport comes under particular scrutiny due to its substantial impact on the environment. This paper explores the implementation of environmental management in the Austrian road freight transport sector. A model based on an extensive literature review is developed and adapted to show the impact of attitude, company size and sector affiliation. It is tested using data from a quantitative survey. Based on an extensive literature review a model of influencing factors is developed and tested using data from a quantitative survey. According to our findings, we adopted the model with respect to the impact of attitude, company size and sector affiliation. Although decision‐makers' attitudes have a significant influence on the companies' actual environmental performance, firm size and sector affiliation are shown to have a far greater influence. It is therefore necessary to offer external incentives and support in order to improve environmental behaviour, especially among smaller and transport companies. Such instruments, however, need to be aligned on an international basis and across industries to prevent friction and competitive disadvantage. In addition to policy intervention (legal restrictions and incentives) and improvements on a corporate level, consumer awareness should be raised in order to create public pressure for companies to implement environmental management. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

Outcomes of Environmental Management Systems: the Role of Motivations and Firms’ Characteristics

This article analyzes the influence of the sources of motivation that lead companies to adopt environmental management systems (EMSs) on the outcomes of these systems. A set of hypotheses derived from an extensive review of the literature is analyzed using cluster analysis – in order to identify groups of companies – as well as correlation and regression analyses, with data obtained from a survey of 361 Spanish organizations that have environmental certification. The results reveal that, for the groups identified, companies from the holistic cluster (with high levels of both internal and external drivers) and from the internal focus cluster (with more intensive internal sources of motivation) secure greater benefits from the process of adopting an EMS. This article also sheds light on the influence on the outcomes of some variables that have been under‐researched, such as the economic resources invested in an EMS and whether or not the certified companies belong to a sector with high environmental pressure. The findings help to characterize the firms with environmental certification and may also help managers, policy makers and other stakeholders to anticipate the potential benefits of EMSs. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment     

Do Individual Preferences Affect the Environmental Decision‐Making Process in Teams? The Role of Participation

Literature on organizations and the natural environment has focused on the importance of individual managers and leaders. However, this literature has scarcely ever focused on individuals in the team context, even when teams have been considered to be key for a firms’ environmental progress. Although teams’ environmental decisions can be enriched by the different contributions of team members, it is necessary that team members actually participate and contribute their preferences during the decision‐making process. We used an adaptation of the legislative dilemma task with 84 students to contribute to environmental management literature by analyzing members’ participation during the team decision‐making process. The results of this paper show how those members with environmentally proactive preferences have a higher participation during the decision‐making process, and as a consequence they have a greater influence on the team decision. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

Environmental Upgrading of Developing Country Firms in Global Value Chains

While the strategic management literature on corporate social responsibility (CSR) is abundant, it tends to consider the context of developed countries, with a focus on certain specific issues such as the strategic behaviour of firms with regard to sustainable development and the economic benefits of CSR practices. The present study examines the influence of western organizations on responsible corporate behaviour in developing countries, an issue that has been somewhat neglected in the existing academic literature. In particular, it explores the environmental upgrading of developing country firms in global value chains. This research, conducted with the analytic hierarchy process (AHP) method, involves 24 Tunisian olive oil companies. The findings indicate that exporting companies have indeed benefited from environmental upgrading, but, because of the cooperation strategy adopted by leading western firms (imposition of standards) and the absence of financial and technical assistance, the extent of environmental upgrading remains limited. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment     

Environmental Management Systems and Local Community Perceptions: the Case of Petrochemical Complexes Located in Ports

Most oil refineries and factories producing basic chemical products are located in port areas, with the result that industrial complexes potentially have a strong environmental impact on their area of influence. These externalities result in a loss of welfare for citizens residing in neighbouring areas. In a context of sustainable development, companies must integrate concerns about the natural environment in their business strategy. External stakeholders, as residents, find it difficult to visualize the actions firms take to reduce their environmental impact, and the adoption of voluntary certified environmental management systems (EMSs) acts as a signal indicating the adequate environmental behaviour of these companies. These certifications enable companies to achieve the social legitimacy they need for long‐term survival and competitiveness. In the context of a petrochemical industrial complex located in the port of Castellón (Spain), this paper primarily discusses whether such certifications – which act as signals of firms’ desirable environmental conduct – translate into higher trust in firms and lower risk perception by residents. Contrary to what might be expected, despite the widespread use by companies of voluntary and certified EMSs, the research findings confirm a relatively high citizen perception of risk regarding the industrial complex and a low trust in companies. On the other hand, the findings also show a low trust in the public institutions responsible for authorizing and monitoring firms’ activities and for enforcing possible sanctions in non‐compliance cases. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Different strokes: regulatory styles and environmental strategy in the North‐American oil and gas industry

The environmental management and policy literature presents competing arguments for and against different styles of environmental regulations – command‐and‐control versus flexible regulations that enable voluntary actions. On the one hand, it is argued that firms will not adopt minimum environmental standards without command‐and‐control regulations and that such regulations may actually result in competitive benefits for first movers. On the other hand, the literature argues that command‐and‐control regulations stifle innovation and that flexible regulations encourage proactive environmental strategies that lead to competitive benefits for organizations. This study compared the environmental strategies and competitiveness of oil and gas firms in two different regulatory contexts – the command‐and‐control based US environmental regulations and the flexible collaborative Canadian context. The study found no significant differences in the degree to which firms within the two contexts were more or less proactive in their environmental strategies or in the extent of competitiveness associated with corporate environmental strategies. Follow‐up interviews with 12 Canadian and US companies indicated that regulations appeared to be more important drivers of corporate environmental practices at initial stages and eventually other external and internal drivers became more important influences on corporate environmental strategies. Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment     

Moving to the Next Strategy Stage: Examining Firms' Awareness,Motivation and Capability Drivers in Environmental Alliances

Complementing extant studies on the antecedents of firms' environmental strategy, this article focuses on the trajectories of corporate engagement in proactive environmental alliances. Specifically, we build an awareness–motivation–capability framework and analyze factors that drive the move beyond incremental pollution prevention and facilitate firms' engagement in transformative, sustainable development strategies in their alliances. Based on 212 environmental alliance‐related observations, our test results indicate limited explanatory power of regulatory pressures, but highlight the role of firms' environmental networks to sharpen their awareness to engage in transformative alliances. Further, we elaborate on the nuances and boundary conditions of firms' risk‐taking propensity, industry concentration, financial capacity and especially prior sector‐spanning experiences as motivation and capability drivers. These insights contribute to the discourse on firms' environmental strategy and alliance formation by depicting how and to what extent environment‐specific and more general firm attributes predispose them to engage in transformative rather than incremental environmental projects. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

When companies improve the sustainability of the natural environment: A study of large U.S. companies

In light of the call for companies to abandon current approaches to environmental management, this study adds to the environmental strategy literature and uses the evidence of competitive dynamics among companies to identify a mechanism by which companies invest in proactive environmental strategies and thereby improve the sustainability of the natural environment. An examination utilizing fixed effects regressions on a sample of large U.S.‐based companies reveal that even after controlling the number, environmental and financial performance of leading (environmental) companies, laggard (environmental) companies are more likely to invest in proactive environmental strategies when their leading peers display higher sustainability orientations. Neither the expectation of government regulation nor social movement pressure was found to be influential in this relationship. Therefore, the future dominance of companies' investments in the sustainability of the natural environment will be driven by companies themselves as long as competitive advantages are expected.     

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     

Incentive Pay and Firm Performance: Moderating Roles of Procedural Justice Climate and Environmental Turbulence

In connection with the literature on strategic reward and agency theory, this study investigates the effects of incentive pay on employee outcomes and firm performance. We identify employee outcomes, such as commitment and competence, as mediating processes that explain the effects of incentive pay on firm performance. We further propose procedural justice climate and environmental turbulence as boundary conditions that determine the strength of the effects of incentive pay on employee outcomes. The research model is tested using multisource data collected at three time points over a five‐year period from 227 Korean companies. Our analysis confirmed that incentive pay enhanced employee commitment and competence, which, in turn, improved the operational and financial performances of firms. The effect of incentive pay on employee commitment was negative for firms with a low procedural justice climate, but positive for firms operated under a highly turbulent environment. By contrast, the effect of incentive pay on employee competence was positive only for firms operated under a stable environment. This study enriches the literature by presenting and validating plausible underlying mechanisms and boundary conditions under which strategic performance–contingent incentive pay affects firm performance. © 2015 Wiley Periodicals, Inc.     

Environmental supply chain management in the construction sector: theoretical underpinnings

Environmental implications of a product/project are typically spread across its supply chain, from design through to end-of-life. This is particularly acute for construction sector because of the inherent nature and complexity of its supply chain. The sector, therefore, could benefit from the application of environmental supply chain management (ESCM), a systematic and integrated approach towards restraining the adverse environmental impacts emanating from the supply chain. Unfortunately, uptake of ESCM in construction vis-à-vis other sectors is limited and fragmented. This formed the motivation, which using 39 interviews across 20 firms in the UAE construction sector, provide systemic insights on the various facets of ESCM namely, core and facilitating environmental practices, internal and external drivers (pressures/motives) and barriers/challenges affecting environmental practices’ implementation, and relevant environmental performance measures across different firm types and stakeholders with the support of several established/emerging theories. The findings is expected to enhance the application of ESCM in construction.     

STRATEGIC ENVIRONMENTAL MANAGEMENT IN THE IRISH CHEMICAL/PHARMACEUTICAL INDUSTRY

Business strategy publications about decision-making have provided a large amount of information on decision-making relating to market share, competitive advantage, managing change and achieving quality. Nevertheless, little research has been carried out on strategic environmental management. Four in-depth case studies of environmental strategy formation and implementation in chemical/pharmaceutical companies in Ireland are presented here. A continuum describing the differing levels of strategic environmental management among the companies is developed. The dimensions for the continuum include attitude towards environmental management, compliance record, level of environmental training, environmental department structure and community relationship, among others. The findings suggest that environmentally proactive companies follow a decentralized or holistic approach to environmental management. Furthermore, these companies have developed an environmental philosophy which has been adopted throughout the organization. This philosophy is identified as environmental caring     

Strategizing Environmental Policy and Compliance for Firm Economic Sustainability: Evidence from Taiwanese Electronics Firms

This study aims to examine whether the compliance of environmental policies can sustain firm economic performance, and whether a timing issue is relevant to firm economic sustainability in pursuit of eco‐friendly efforts. Offering models predominantly based on the institutional theory, this study tests hypotheses using data from 284 companies in the electronics sector in Taiwan during the period from 1997 to 2010. The findings reveal that the execution of environment policies mostly improves firm economic sustainability and some joint green efforts can even strengthen such sustainability; however, firms aiming to sustain their economic performance should not hasten to undertake eco‐friendly efforts, implying that first movers may not be guaranteed firm economic performance. Thus, managers should carefully strategize their green efforts to comply with environmental policies, and execute them in due course to prevent disadvantages, such as market uncertainty and complexity of green practices, while conquering organizational inertia. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment     

Do independent,female and specialist directors promote eco-innovation and eco-design in agri-food firms?

Eco-innovation and eco-design strategies are associated with firms' innovation capabilities. Moreover, they may impact on access to public subsidies and on financial performance. In this respect, the agri-food industry is especially vulnerable, because in general, this sector has less experience of technological innovation, and managers are more likely to be averse to such projects. On the other hand, the board may promote a proactive environmental approach to defend the interests of investors and other stakeholders, taking the view that these strategies reduce the environmental impact of the firm's products and its production processes and are therefore beneficial. Our study aim is to identify the profile of directors who may be favourable to eco-design and eco-innovation strategies, focusing on the traits of independence, gender diversity and environmental specialisation. The results obtained, from a dependence model based on panel data supplied by 321 agri-food companies for the period 2002–2017 (unbalanced panel data with 4878 observations), show that independent directors play a crucial role in implementing eco-innovation and eco-design projects. However, neither the diversity nor the specialisation of directors is a significant factor in this regard.     

What does targeting ecological sustainability mean for company financial performance?

This study empirically examines the effects of companies' environmental orientation on their long‐run financial performance. It also examines the mediating roles of environmental legitimacy and environmental performance. We use PLS‐SEM among a sample of large U.S.‐based companies. The results show that an environmental orientation that targets ecological sustainability is directly and positively associated with the debt ratio and with long‐run market value but to a lesser degree than what is obtained by not targeting ecological sustainability. Targeting ecological sustainability has a greater positive impact on environmental legitimacy than not targeting ecological sustainability. Environmental legitimacy, but not environmental performance, mediates the link between environmental orientation and long‐run profitability and market value. These findings suggest that targeting ecological sustainability is important for improving environmental legitimacy, but companies are not proactive in improving environmental performance. This study offers insights to managers for improving financial performance by targeting ecological sustainability.     

Issues in the implementation of proactive environmental strategies

Management consultants, environmental groups, and industry trade associations have all recently offered guidelines for companies to improve environmental performance.¹ The guidelines suggest ways that companies can implement strategic change to move beyond compliance with regulation, assume responsibility for the environmental impacts of their products, and gain public credibility. Much of the advice offered can be useful to managers who are responding to rapidly changing environmental pressures. Nevertheless, implementation of some of the general guidelines could impose undue costs or introduce untoward organisational consequences for certain companies. While mentioned as an issue in the management literature, companies need more systematic advice on how best to tailor these broad guidelines for environmental strategic change to the specific needs and capabilities of their companies. In addition, as many companies are comprised of diverse business units that are sometimes linked together only through financial controls, managers must adapt environmental management programs to unique ‘substructures’ within the firm. These substructures can differ dramatically in their environmental performance and their management capabilities. Elsewhere we have offered a framework for analysing environmental strategies and management programs.² In this paper, we identify some of the implementation issues that confront companies when they introduce environmental strategic change. We argue that environmental strategies are most effectively implemented when they are consistent with the organisational characteristics and operating context of the company involved. We use Volvo's experience with environmental strategic change to highlight many of the difficulties that companies may encounter when altering their approach to environmental performance. The case illustrates how a company can modify its own strategy and management programs for more effective change. It is an interesting case to study because of the proactive and comprehensive nature of Volvo's environmental strategy and management programs.     

Environmental Responsibility and Firm Performance: The Application of an Environmental,Social and Governance Model

This paper investigates the way in which environmental responsibility impacts on corporate financial performance, measured by return on equity (ROE) and return on assets (ROA). Using a sample of Korean firms covering the period 2011–2012, and employing two different test methods, namely the OLS and 2SLS methods, we show that the relationships between environmental responsibility performance and firms’ ROE and ROA are positive and statistically significant. However, we show that research and development (R&D) intensity (expenditure) does not affect either environmental responsibility or corporate financial performance. The results of this analysis encourage further empirical analysis of the industries, as well as the use of more than one estimation method to determine environmental responsibility and corporate financial performance within firms. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

The ethics of ‘going green’: the corporate social responsibility debate

A significant proportion of authors of green business texts proposes that managers should be the instigators and guardians of a societal change towards sustainable development. There is the notion of managerial duty towards the environment. This paper attempts to unravel the implications of this call for managerial eco‐heroism. The reason that this unravelling is important is that there is a growing body of evidence suggesting that win–win situations – the ‘low hanging fruit’ – are progressively becoming less apparent for many firms. This implies a conflict between profitability and environmental performance. This translates into a (perhaps familiar) scenario for business: one greener option is more expensive, and the financial gains associated with it are insufficient to justify it on the grounds of profitability – ‘going green’ then means losing potential profits. A neoclassical and a socio‐economic perspective are provided as foundations for managerial reasoning. Even though the corporate social responsibility debate is not resolved, it is nonetheless of importance, not least because environmentally proactive managers might intend to increase social well‐being but actually reduce it through their green decision‐making. Thus the real‐world applicability of the positions adopted by the opposing philosophical schools is analysed. Copyright © 1999 John Wiley & Sons, Ltd and ERP Environment.