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.     

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.     

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.     

Eco‐efficiency and dematerialization: Scenarios for new industrial logics in recycling industries,automobile and household appliances

The environmental field has been continuously overloaded with new concepts in the area of environmental impact such as environmental space, ecological backpack, carrying capacity, ecological footprint, dematerialization and eco‐efficiency. The latter two concepts have a particular relevance to corporate environmental management. This article discusses the concepts of dematerialization and eco‐efficiency with respect to their implications for industry logics. It is based on a project that was initiated by the Swedish EPA. Within the project we used the scenario technique to explore the future industry logics of recycling industries related to the automobile industry and household appliances. One scenario, ‘business as usual’, indicates a focus on products with incremental improvements and a stepwise departure from today's practices. The other scenario, ‘dematerialization’, indicates a focus on functions and needs, and a significant departure from today's practices. Concluding from the empirical analysis of present industry logics, based on interviews and data analysis in specific industries, we realized that changes in industry logics and business systems are inevitable, if industry takes a responsibility for the whole life cycle seriously. Accordingly, we propose the transformation of business systems as a research agenda for the future. Such an agenda follows ecologically motivated transformation and translation processes throughout the whole system of actor networks and action nets of society and creates an enhanced understanding of the emerging processes of corporate environmental management. It also considers different institutional arrangements between those actors that constitute the system as a whole. Copyright © 1999 John Wiley & Sons, Ltd and ERP Environment.     

Web content mining for comparing corporate and third‐party online reporting: a case study on solid waste management

This study investigates the coverage of solid waste management on 1142 websites maintained by companies, news media and non‐governmental organizations to validate an automated approach to content and language analysis. First, a frequency analysis of waste management terms sheds light on the breadth and depth of their environmental discourses, revealing that corporate and media attention to waste management is small compared with that of non‐governmental organizations. Second, an investigation of their attitudes toward waste management suggests that companies avoid negative information in environmental communication, unlike news media or non‐governmental organizations. Ultimately, an automated tool for ontology building is employed to gain insights into companies' shared understanding of waste management. The ontology obtained indicates that companies conceptualize waste management as a business process rather than framing it from an ecological perspective, which is in line with findings from previous research. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Corporate environmental performance,environmental management and firm risk

Using a sample of 1,632 U.K. firm‐year observations from 2002 to 2013, this paper investigates the impact of multidimensional corporate environmental performance (CEP) on firm risk. Considering two dimensions of CEP, namely environmental management performance (EMP) and environmental operational performance (EOP), we find that EMP serves as an effective mechanism in reducing firm risk, and such an effect is mainly driven by the manufacturing sector. Meanwhile, there is no clear association between EOP and firm risk. However, our findings highlight a moderating effect of EOP on the relationship between negative EMP and firm risk. This provides new insights into the value of multidimensional CEP and suggests that the complex relationship between outcome‐ and process‐based environmental performance is important for understanding the real effects of CEP on firm risk. Our results have important implications for managerial decision‐making in strategy and risk management, as well as for policymaking in environmental regulation.     

The evolution of environmental management: from stage models to performance evaluation

In the past two decades, academics and practitioners have attempted to improve understanding of environmental management by classifying companies' environmental behaviour, and evaluating their performance. Driven by both research and societal interest, this has resulted in a wave of stage or phase models, and a range of typologies. This article gives an overview of the development of such environmental management models, analysing their characteristics, strengths and weaknesses. An evolution can be noted in the direction of typologies and non‐linear models to deal with organizational and strategic complexities. Models are starting to pay more attention to the management side. To overcome problems of operationalization and limited company and sector specificity, environmental performance evaluation systems have emerged more recently. Although comprehensive performance assessments are still unavailable, the tenets of such a system can already be delineated. The paper presents these components, and draws conclusions on the contribution of environmental management models and performance evaluation systems. Copyright © 2002 John Wiley & Sons, Ltd. and ERP Environment     

Corporate motivations for environmental sustainable development: exploring the role of consumers in stakeholder engagement

This paper examines the extent to which the end‐consumer appears to influence corporate behaviour towards reporting specific environmental management activities, through examination of environmental disclosures by the UK FTSE 100 companies. The paper also explores whether proximity to the end‐consumer is associated with particular motivations for environmental management – whether cost‐reducing or reputational benefits, hypothesizing that close‐to‐consumer companies (C2C) will have a greater focus on reputational benefits than their counterparts. The results established that C2C companies were significantly more active in particular environmental measures (climate change and management processes) than their counterparts. They were also more likely to undertake environmental activities for which there was no explicit cost‐reduction benefit, suggesting that reputation with consumers/society may be a particular business motivator for them. These findings are important to policy makers, government and investors in terms of identifying which companies are leading particular aspects of the corporate environmental agenda and understanding the driving forces for it. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.     

Organizational transition management of circular business model innovations

Scholars and practitioners across fields increasingly recognize that business models for the circular economy may be an effective lever for solving ecological persistent problems such as climate change, biodiversity loss, and growing natural resource scarcity. Despite a growing interest in the potential of circular business models, interconnections between the organizational dimensions of firms and their business model innovation processes remain underexplored. Based on problem‐centered expert interviews with business consultants experienced in circular business development, this study creates a conceptual model that offers structured knowledge about why firms steadily reproduce linear BMs and how incumbents manifest themselves as a constant linear‐oriented value creation system. The model also demonstrates organizational conditions and management strategies that frustrate the reproduction of linear BMs and, thus, enable initial moves towards CBM innovation. Building on this, the article provides a set of propositions on how an organizational transition management may be configured and what incumbents require to successfully navigate circular business model innovation. The findings provide a foundation for a contemporary understanding of circular business model transition management, which simultaneously serve as impulses for future research investigations.     

High‐performance organizing,environmental management,and organizational performance: An evolutionary economics perspective

This study applies evolutionary economics reasoning to the green HRM context and examines whether and how environmental management routinization relates to organizational performance. In doing so, we introduce the concept of ecological routines, defined as deeply embedded, firm‐specific rules and procedures associated with organizing and practicing corporate environmental management that do not change very much from one iteration, period, or functional unit to another. We examine the extent to which ecological routines that encompass organizing (high‐performance organizing [HPO]) and practice routines of environmental sustainability relate to green decisions, green behaviors, and organizational performance. In a sample of 229 managers from 33 organizations in the environment‐sensitive industries of the United States, we find support for multilevel mediation of green decisions and green behaviors as well as interaction of HPO and environmental management practice routines. Implications for research and practice are discussed.     

Why Eco‐labels can be Effective Marketing Tools: Evidence from a Study on Italian Consumers

An emerging topic in environmental management studies is the role of eco‐labels in guiding consumers in their purchasing choices. In order to contribute to the current debate on this topic, this research paper aims to assess, through a quantitative analysis, whether the knowledge, awareness and information that consumers gather on the environmental impact of a product through an eco‐label can stimulate an eco‐friendly behavior. Moreover, we assess whether general attitudes in purchasing behaviors determine a personal attitude toward ecological consumption. The findings from this study, which is based on a large dataset of Italian consumers, highlight a significant role of eco‐labels in increasing the consumer's perceived behavioral control, unlike loyalty in brand and in store, which do not exert a significant influence. Practical implications for green business strategies emerge. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Why do standardized ISO 14001 environmental management systems lead to heterogeneous environmental outcomes?

Institutional theories and resource‐based views have suggested that, although they appear similar externally, standardized management systems may be implemented very differently in different organizations. This variability in implementation may be responsible for the heterogeneous performance of these standardized management systems. The current literature on the environmental impacts of ISO 14001 certification has largely neglected this phenomenon. Drawing on our survey of all US 14001 certificate holders, this study finds that great variability does exist in facilities' implementation of ISO 14001 standards. This heterogeneity has a significant impact on the linkage between ISO 14001 certification and facilities' environmental performance. In particular, we find that facilities that integrate ISO 14001 standards into their daily operations are more likely to report improvements in environmental performance. Environmental improvements are also more likely to occur in facilities that include performance management elements in their ISO 14001 standards. Furthermore, both types of facility are more likely to report that ISO certification contributes to this improvement. Neglecting the heterogeneity in facilities' implementation of ISO 14001 standards may explain the instability of findings from the empirical literature investigating the impacts of ISO 14001 certification. Theoretically, this paper informs the understanding of heterogeneous organizational behavior under isomorphic pressures. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Doing More with Less: Building Dynamic Capabilities for Eco‐Efficiency

This article sheds light on the manner in which managers perceive, develop and integrate dynamic capabilities for eco‐efficient activities inherent to industrial ecology. The research employs a case study of 12 Canadian facilities involved in the processing of a wide variety of waste materials. Findings from the experiences of 60 managers interviewed reveal that capabilities for industrial ecology largely depend upon the integration and coordination of competencies, innovations and new routines related to several functional areas: innovation and technological development; control of residual material flows; adjustments in human resources; management of environmental constraints; and networking and marketing. These dynamic capabilities are developed and integrated through a four‐stage process: local experimentation, internal operationalization, enlargement/cross‐functional integration and strategic consolidation. The paper contributes to the extant literature related to dynamic capabilities and the natural resource‐based view by offering an understanding of those factors necessary for the success of industrial ecology, and also by demonstrating the functional and dynamic nature of such factors. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Organizational structure and effective environmental management

Success in ‘greening’ a business organization is likely to depend on an appropriate environmental management structure being developed in accordance with the general structure of the organization and then receiving the appropriate support from senior and middle management. The failure to assure such a relationship may provide an explanation of the development of gaps between policy and practice. This article explores differing choices in the structure of the environmental function in a number of UK regional electricity companies and how these choices impact upon the management of environmental issues, producing different outcomes. The paper argues that the environmental structure that is, either consciously or by default, adopted by a company would seem to have some impact on how environmental issues are perceived and dealt with by that company. Therefore, such a decision has the capacity to shape environmental strategy in its implementation and possibly even its conception. Copyright © 2000 John Wiley & Sons, Ltd and ERP Environment     

Understanding leadership for cross‐cultural knowledge management

This article examines the role of leadership in cross‐cultural knowledge management (CCKM) because both knowledge management and cross‐cultural management are now regarded as popular topics in both academic and practical research in the age of globalization. We discuss the existing literature on the relationship between leadership and cross‐cultural management as well as the relationship between leadership and knowledge management to illustrate the importance of leadership in each field. The concept of cross‐cultural knowledge management—an ambiguous term—will be presented from Nguyen, Umemoto, and Medeni's (2007) work, establishing an expanded role of cross‐cultural management, which could be viewed as a subset of knowledge management. To emphasize the impact of leadership on CCKM, we discuss the influence of leadership on each factor in the theoretical model of CCKM. Our understanding of the role of leadership in CCKM suggests that international leaders should pay careful attention to managing fragmentation, integration, and differentiation when they want to create and manage the cross‐cultural knowledge of their employees.     

Assessing the Comprehensiveness of Supply Chain Environmental Strategies

As environmental awareness grows, firms are expected to expand the scope of their environmental strategies beyond organisational boundaries and to address more comprehensively environmental issues in their supply chains and product life cycles. Drawing on different literature streams, international standards and corporate disclosure, this paper presents a conceptual framework for the quantitative assessment of the comprehensiveness of firms' environmental strategies. This framework allows us to capture: (i) the environmental inputs and outputs addressed, (ii) the firm versus supply chain orientation of environmental strategies, and (iii) the environmental management practices adopted by companies. We illustrate the application of this framework with a content analysis of corporate sustainability reports for a cross‐sectoral sample of sustainability leaders. Our results indicate that there is a need for greater specificity in environmental reporting and that, overall, companies remain firm‐oriented. It is also observed that supply chain orientation can generally be associated with stakeholder pressure. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

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.     

Cultivating Ecological Knowledge for Corporate Sustainability: Barilla's Innovative Approach to Sustainable Farming

In this paper, we link three theoretical perspectives – organizational knowledge, ecological knowledge and social–ecological systems – to derive new conceptions of multi‐disciplinary, multi‐tier, sustainability‐oriented knowledge. Our study examines how collaboration between pasta‐producer Barilla, the farmers/smallholders supplying the firm and scientists generated sustainability practices in the agri‐food industry by creating transformative ecological, technical and scientific knowledge. In 2010, Barilla initiated a sustainable farming project to significantly reduce the environmental impact of cultivating durum wheat, its most important raw material. Core components included replacing monoculture with crop rotation, collectively creating innovative approaches that support farmers’ decision making and generating widely accessible guidelines for sustainability‐oriented cropping knowledge and practices. These collaborative efforts initiated profound transformations within and beyond the organization's boundaries via increased production yields, reduced environmental impacts and improved sustainability of farming practices, which generated economic, social and ecological benefits for farmers, surrounding communities and the firm. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

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.     

Why don't we see more action? A metasynthesis of the investor impediments to integrate environmental,social, and governance factors

Investors increasingly commit to consider environmental, social, and governance (ESG) factors in their investment decisions. However, the challenges of investors for a holistic integration of ESG factors in their investment decisions are manifold and endanger reaching urgent societal goals. The paper uses metasynthesis to develop a comprehensive understanding of these impediments from a diverse set of papers. Supported by textual analysis, it identifies 161 different topics, which are subsumed within groups and aggregated along a four‐pillar framework of market‐, firm‐, regulatory‐, and individual‐based impediments. The most prominent impediments are found in the areas of a perceived lack of a business case, the quality of data, the absence of clear standards and definitions, and various behavioral biases. Moreover, a considerable research–practice gap in framing the relevant research questions that contribute to the slow‐moving integration process is discovered. Focusing additionally on potential blind spots on the investor and research sides will prove to be important for swifter ESG integration.