Abstract
The aim of this paper is to examine the Porter hypothesis which defines that environmental regulations, under certain circumstances, could have positive effects on corporate environmental and economic performance. The majority of previous studies are based on questionnaire-based surveys, on normative models and on relative information at country level. To overcome some of the weaknesses of previous works, a benchmarking-scoring framework is suggested to draw useful and valuable information from corporate sustainability reports so as to examine the relationships between four dimensions of corporate performance, namely compliance with environmental legislation, green intellectual capital (GIC), environmental innovations, and corporate environmental performance. The proposed framework was applied in a sample of firms which operate in the metal products industry. The findings show that GIC could be a significant mediating factor between environmental legislation and environmental performance of firms. Additionally, it seems that GIC influences innovations and environmental performance.
Highlights
The impacts of firms on the natural environment and local communities have lately gained great momentum in academic and public debate (Vatalis et al, 2011)
This paper suggests a new methodological framework to examine the Porter hypothesis
It is based on scoring/benchmarking techniques which draw information from corporate sustainability reports
Summary
The impacts of firms on the natural environment and local communities have lately gained great momentum in academic and public debate (Vatalis et al, 2011). Volume 12 Issue 1 January-March 2021 and Sarkis, 2017, Vatalis, 2010). In this context, there are pressures which have either formal forms such as regulations (e.g. environmental taxes, legislations and tradable permits) or informal forms such as reactions of local communities and consumers associations (e.g. products boycotters). The second explanation is that firms merely adopt environmental management practices as a result of changes in the environmental legislations without investments in new innovations and firms fail in gaining other benefits from the adoption of such practices (Chang, 2015; Gürlek and Tuna, 2018)
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