Do financial penalties for environmental violations facilitate improvements in corporate environmental performance? An empirical investigation

Environmental regulations play an essential role in managing firm behavior and providing a reference point for the minimum standards of corporate environmental performance, yet certain firms fail to ensure their environmental performance meets these standards. This research focuses on public firms that the US government has penalized for violating environmental regulations and investigates whether these firms subsequently improved their environmental performance. Surprisingly, neither the receipt of a penalty for an environmental violation nor the imposition of a greater penalty was associated with improvements in environmental performance. Instead, a penalty for environmental violation predicted further, albeit mild, deterioration in environmental performance. While the existing literature has established that financial penalties deter most firms from committing environmental violations, this research contributes to this literature by revealing that these penalties fail to motivate firms that have violated environmental regulations to improve their environmental performance.     

Do Board's Corporate Social Responsibility Strategy and Orientation Influence Environmental Sustainability Disclosure? UK Evidence

The environmental implications of corporate economic activities have led to growing demands for firms and their boards to adopt sustainable strategies and to disseminate more useful information about their activities and impacts on environment. This paper investigates the impact of board's corporate social responsibility (CSR) strategy and orientation on the quantity and quality of environmental sustainability disclosure in UK listed firms. We find that effective board CSR strategy and CSR‐oriented directors have a positive and significant impact on the quality of environmental sustainability disclosure, but not on the quantity. Our findings also suggest that the existence of a CSR committee and issuance of a stand‐alone CSR report are positively and significantly related to environmental sustainability disclosure. When we distinguish between firms with high and low environmental risk, we find that the board CSR/sustainability practices that affect the quantity (quality) of environmental sustainability disclosure appear to be driven more by highly (lowly) environmentally sensitive firms. These results suggest that the board CSR/sustainability practices play an important role in ensuring a firm's legitimacy and accountability towards stakeholders. Our findings shed new light on this under‐researched area and could be of interest to companies, policy‐makers and other stakeholders. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Chief executive officer attributes,sustainable performance,environmental performance,and environmental reporting: New insights from upper echelons perspective

This study examines the impact of chief executive officer (CEO) attributes on sustainable performance, environmental performance, and environmental reporting, which are motivated by institutionally driven environmental policies, regulations, and management in the context of Chinese listed firms. With the use of a comprehensive dataset of 2,854 Chinese listed firms over the 2010–2017 period (i.e., making over 16,000 individual firm‐year observations), our findings are fourfold. First, our overall findings reveal that CEOs with research background tend to engage more in activities that improve sustainable performance, environmental performance, and environmental reporting than do those without research background. Second, CEOs with financial expertise are positively linked with increased sustainable performance and environmental reporting. Third, CEOs with foreign exposure are more eager to engage in activities that enhance sustainable and environmental performance than do those without foreign exposure. Fourth, young CEOs tend to take actions that reduce both sustainable and environmental performance than do their older counterparts. We interpret our results within upper echelons theoretical perspective. The results are robust to alternative measures, potential endogeneities, and sample selection problems.     

Government Engagement,Environmental Policy,and Environmental Performance: Evidence from the Most Polluting Chinese Listed Firms

This study empirically examines the implementation of environmental policies and how government engagement impacts on a firm's environmental performance based on a sample of Chinese listed firms in the eight most polluting industries over a 10‐year period. The findings of the study demonstrate that government engagement, measured as ownership structure, is positively correlated with environmental performance, measured by environmental capital expenditure, for state‐owned firms, but no significant relation is found for non‐state‐owned firms. In addition, non‐state‐owned firms are more likely to perform better in terms of environmental investment after the 2006 enactment of a new policy explicitly linking environmental issues with political incentives to regional governments. This study also reports that corporate environmental performance impairs firm value for state‐owned firms but has no impact on firm value for non‐state‐owned firms, suggesting that investors negatively respond to environmental investments made by state‐owned firms as a result of government engagement/political pressure. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

When Necessity Becomes a Virtue: The Effect of Product Market Competition on Corporate Social Responsibility

We test whether Corporate Social Responsibility (CSR) is driven by strategic considerations by empirically studying the link between competition and firms' social performance. We find that firms in more competitive industries have better social ratings. In particular, we show that (i) different market concentration proxies are negatively related to widely used CSR measures; (ii) that an increase in competition due to higher import penetration leads to superior CSR performance; (iii) that firms in more competitive environments have a superior environmental performance, measured by firm pollution levels; and (iv) that more product competition is associated to a larger within‐industry CSR variance. We interpret these results as evidence that CSR is strategically chosen.     

产权性质、货币薪资公平与企业绩效 ——基于2010—2014年A股上市公司的经验数据

根据计薪原理将货币薪资公平分为企业货币薪资公平、高管货币薪资公平和员工货币薪资公平三类,基于2010—2014年我国A股上市公司的经验数据,对我国企业的产权性质、货币薪资公平与企业绩效三者之间的关系进行实证研究,结果表明：企业货币薪资公平和普通员工货币薪资公平均对企业绩效有着显著影响。在不同产权性质下,企业货币薪资公平、高管货币薪资公平、普通员工货币薪资公平对企业绩效的影响不一样。地方政府控制和非政府控制的企业的货币薪资公平对企业绩效有着显著影响,中央政府控制的企业的高管货币薪资公平对企业绩效有着显著影响,且无论是中央政府、地方政府还是非政府控制的企业,普通员工货币薪资公平对企业绩效都有着显著影响。     

The Effect of Family Ownership on Different Dimensions of Corporate Social Responsibility: Evidence from Large US Firms

Previous research has shown that family firms differ from non‐family firms with regard to aggregate measures of corporate social responsibility (CSR). We argue that CSR is a multidimensional concept that comprises several aspects, which range from employee relations to ecological concerns and product issues. Based on an organizational and family identity perspective, we argue that the effect of family ownership can differ across various CSR dimensions. Family firms can be responsible and irresponsible regarding CSR at the same time. We use a dataset of large US firms to test our hypotheses. Our Bayesian regressions show that family ownership is negatively associated with community‐related CSR performance and positively associated with diversity‐, employee‐, environment‐ and product‐related aspects of CSR. The largest positive effect of family ownership on CSR performance exists with regard to product‐related aspects of CSR. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

The Impact of Board Structure on Corporate Social Responsibility: A Temporal View

Time plays an important role in corporate social responsibility (CSR) decisions. In the context of time and the boardroom, the consideration of CSR can be affected by board structure. For example, because of considerable short‐term pressures, this study posits that insiders on the board are less likely to prioritize the longer‐term time horizons needed to affect CSR. Following this perspective, a hypothesis is put forth that insiders generally have temporal orientations that are more short term in nature and that they therefore have a negative effect on CSR. A study of 300 of Australia's largest firms confirmed this hypothesis. However, when inside director compensation linked to environmental and social metrics and inside director CSR training are introduced as moderating variables, their interactive effects lead to positive results: both positively moderate the negative insider–CSR relationship in environmental and social dimensions. The study contributes to a temporal view of boards of directors, as well as to corporate governance and CSR. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

Do board sustainability committees contribute to corporate environmental and social performance? The mediating role of corporate social responsibility strategy

The purpose of this study is to investigate the impact of board sustainability committees on environmental and social performance and to examine the mediating effect of corporate social responsibility (CSR) strategy on the relationship between the presence of board sustainability committees and corporate sustainability performance. Using data of U.K. listed firms for the period of 2009–2016, the study employs panel regression analysis and bootstrapping techniques to test study hypotheses. The results suggest that the presence of a sustainability committee improves the effectiveness of CSR strategies. The results also indicate that firms with effective CSR strategies exhibit better environmental and social performance. Further, the empirical results show that the effectiveness of CSR strategy explains the positive relationship between board sustainability committees and corporate environmental and social performance, thus supporting the theoretical framework of the study. The findings of the study shed new light on this research direction and could be of interest to board members, managers, practitioners, investors, policy makers, and regulators that plan to promote sustainability practices and strategies needed for sustainable development.     

The road to cooperative supply‐chain environmental management: trust and uncertainty among pro‐active firms

The pressures on firms to improve their environmental performance have caused them to look outside their boundaries towards their supply chains. In such approaches, firms work with vendors to develop the environmental profile of supplied materials (for example) by reducing materials' toxicity or the amount of packaging used. While large firms can mandate that their suppliers comply with such initiatives, more cooperative approaches are generally likely to be more fruitful. This article presents the results from an exploratory, two phase study of the conditions under which firms engage in cooperative supply‐chain environmental management. First, the authors conducted interviews with 14 leading‐edge firms. In the second phase, the authors conducted a theoretical‐sample survey to examine a model of the antecedents of cooperative supply‐chain environmental management. The results suggest that inter‐firm trust, uncertainty and pro‐active environmental management most directly affect the extent to which firms engage in cooperative supply‐chain environmental management. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.     

Environmental Orientation and Economic Performance: a Quasi‐experimental Study of Small Swedish Firms

This paper investigates the relationship between the environmental orientation and economic performance of small firms. We conduct a quantitative analysis on a sample of 299 environmentally oriented and all other small (2–49 employees) Swedish firms. We estimate the effect of environmental orientation on profit margin to examine how environmentally oriented firms perform in relation to non‐environmentally oriented firms. To do this, we employ a quasi‐experimental design in which we create a control group of non‐environmentally oriented firms that are very similar to their environmentally oriented counterparts. We use two measures of environmental orientation: (i) a third‐party classification, and (ii) a self‐assessment of environmental differentiation. The findings show a negative effect of environmental orientation on economic performance. Our contribution to the literature is in using a novel and more rigorous way to measure the relationship between environmental orientation and economic performance and providing implicit support for the existence of a causal link from economic performance to environmental orientation. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

‘Carrots for Corporate Sustainability’: Impacts of Incentive Inclusiveness and Variety on Environmental Performance

In this paper we explore the role that managerial incentives play in improving corporate environmental performance, finding that greater inclusiveness of incentive beneficiaries and greater variety of incentive types are important factors in firms' incentive schemes. Drawing on a large dataset of multinational enterprises, our results suggest that including more beneficiaries from different levels within the corporate hierarchy and offering both monetary and non‐monetary rewards are generally more likely to lead to reductions in corporate greenhouse gas emissions. Developing two principles of incentive design, inclusiveness and variety, and the conceptualization of patterns of these in organizations as configurations of incentives, our research contributes substantially to normative advice regarding the relative effectiveness of alternative systems of environmental incentives. Such an understanding of the potential of incentives is critical to informing how firms address complex problems such as sustainability in the context of increasingly extended organizational hierarchies and designs. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Influences on Sustainable Innovation Adoption: Evidence from Leadership in Energy and Environmental Design

The adoption of innovations associated with environmental sustainability has been a topic of growing interest among scholars. The research presented in this paper draws on Abrahamson's theoretical framework of fads and fashions to argue that dimensions of uncertainty and degree of external versus internal influence provide significant insights into firms' decisions to adopt sustainable building innovations. We develop three hypotheses, reflecting three views of adoption influence: fad, fashion, and efficient‐choice. We find that adoption of Leadership in Energy and Environmental Design (LEED) green building certification in the United States was more likely among firms similarly oriented toward end‐consumers and among firms strategically positioned as environmental leaders. These results provide support for the fad and efficient‐choice views of adoption, respectively. Contrary to expectations suggested by the fashion perspective, adoption was not more likely among firms located in states whose political leaders are more committed to environmental protection. Our findings offer important implications for practitioners and policy makers seeking to encourage sustainable building design. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

Environmental strategy and low waste operations: exploring complementarities

Organizations require guidance on the most effective functional areas in which to invest in order to improve and sustain environmental performance. As managerial practices progress from concerns with compliance towards practices seeking competitive advantage, more theory is needed regarding the manner in which corporate strategy and operational practices influence environmental performance. This research considers the potential for previously under‐researched complementarities between strategy and operations and the bridging role of environmentally specific practices such as the use of environmental experts as determinants of environmental performance. Using a sample of manufacturing firms, this study explores the relative contribution to environmental performance of strategic intentions, core operational practices such as data and quality management and environmentally specific practices that link strategy to operations. The most significant influence on environmental performance was found to be environmental expertise – which creates a bridge between strategy and operations – and information‐intensive practices such as quality and data management. Strategic intentions or core operational practices in isolation were not considered sufficient support to successfully maintain or improve environmental performance. This research provides a contribution to our understanding of interactions between those functions that have the greatest influence on environmental performance management in manufacturing firms. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Executive compensation and gender: S&;P 1500 listed firms

We examine if a gender gap persists in executive compensation and if the composition and the determinants of executive compensation for men versus women are the same for the S&P1500 listed firms during the period from 1992 to 2004. This analysis is also extended to high tech firms, where high scholarship is required both for male and female executives. The results reveal that the gender gap in executive compensation is reducing essentially after the year 2000. Also, the factors that explain the variation in executive compensation are not all the same for men and women. However, firms continue to pay women, who are considered more risk averse than men, a similar proportion of risky compensation components, such as stock options and restricted stocks, than they pay to men. In terms of technology firms, we find that the gender differences in total compensation are not statistically significant. Our study offers insight into recent data for executive compensation. The finding that the gender gap diminishes is a sign of a better functioning market for executives. Our findings could be potentially useful for compensation committees in order to develop compensation packages that take into consideration the degree of risk aversion in order to enhance performance. Compensation adjusted for risk aversion can produce a higher level of satisfaction for the employees and can lead to better performances. Future research should focus on international comparison of various dimensions of executive compensation.     

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.     

企业数字化转型与高管薪酬契约有效性

以2008—2020年沪深A股非金融类上市公司为研究对象,实证检验企业数字化转型对高管薪酬契约有效性的影响。结果显示,企业数字化转型显著降低了高管薪酬-业绩敏感性,并增加了企业高管的超额薪酬。机制检验发现,企业数字化转型赋予了管理层集中的决策自主权,弱化了外部对管理层经营管理行为的监督力度,增强了管理层利用其高度集中的权力影响董事会薪酬契约制定的能力,获得了更多与企业业绩不匹配的私有收益,从而降低了高管薪酬契约有效性。异质性分析发现,在内部控制质量或信息披露质量较高的企业,企业进行数字化转型对高管薪酬契约有效性的负面效应会得到抑制。研究结论为全面认识企业数字化转型的经济后果提供了经验证据,同时也为数字化转型公司高管薪酬契约的制定提供了一定的参考。     

CEO compensation: does it pay to be green?

The relationship between chief executive officer (CEO) compensation and various organizational variables (i.e., size, length of tenure of the CEO, board composition and firm performance) has been explored in academic research. However, the relationship between CEO compensation and the firm's reputation based on the firm's commitment to the community and the environment has been relatively unexamined in the academic research. This study's purpose is to empirically examine this relationship using the Fortune Reputation Index as revised by Brown and Perry (1995) . Using a sample of 186 firms in 1990 and 188 firms in 1991, the relationships between CEO compensation and organization size, financial performance and environmental reputation are examined. The results of the study demonstrate that there is a strong relationship between CEO compensation and firm environmental reputation, firm size and firm financial performance. Copyright © 2001 John Wiley & Sons, Ltd. and ERP Environment     

Impact of Environmental Performance on Firm Value for Sustainable Investment: Evidence from Large US Firms

This research examines the impact of environmental performance on firm value, applying the event study methodology to Newsweek’s ‘Green Rankings’ announcement of 2012 for large US firms. Specifically, it analyzes the impact of the absolute green score and green rank of firms on their performance in the stock market. We found that investors perceive the announcement as positive news, leading to significant positive standardized cumulative abnormal returns (SCARs). After controlling for industry‐ and firm‐specific effects, we observed that firms with repeated green rankings for enhancing environmental performance showed significantly higher SCARs than those with either reduced or unchanged environmental performance. In addition, the environmental impact score measuring environmental damage from a firm's operational activities was found to be the most influential factor in improving the firm's value. Our findings are beneficial to managers in allocating resources to different types of environmental initiative, and provide valuable insight for sustainable environmental investment. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Does Innovation Drive Environmental Disclosure? A New Insight into Sustainable Development

Sustainable development is a hot topic in business and the media, and there is a growing demand for reliable environmental disclosure from a wide range of stakeholders. Ethical performance, including social and environmental performance, is actively scrutinized. A firm's stakeholders expect reliable disclosure to correctly assess its performance. Research on the link between environmental disclosure and environmental performance shows mixed results. Both a positive and a negative association have been found. This study reexamines this association by considering environmental innovation as a key determinant of environmental disclosure. We find that environmental performance and environmental innovation jointly determine environmental disclosure. At low levels of environmental performance, innovative firms tend to disclose more than their non‐innovative counterparts to inform stakeholders about their innovation and strategy to obtain an improved environmental performance. This disclosure gap tends to diminish as innovative firms become better environmental performers. The higher levels of environmental disclosure are closely associated with firms' environmental performance for both groups. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment