Abstract

The management of natural environments has become a fundamental issue for companies in recent years. A firm’s environmental commitment affects all levels of its operation. In this study, we investigated whether having an effective and constant relationship with customers over time (customer capital) makes a difference to firms with a high environmental commitment compared with less environmentally committed firms. We found support for our idea by using original survey data from 149 small and medium-sized enterprises (SMEs) in Iran (2016–2017). Furthermore, we found that customer capital enhances environmental collaboration with customers which, in turn, has a positive impact on the firm’s environmental commitments. These findings provide empirical evidence for the important role of “getting closer to customers” as a way of enhancing corporate environmental responsibility in developing countries with weak institutional environments.

Highlights

  • Industrial units have been considered as a major source of environmental degradation [1].environmental preservation by firms has gained the increasing attention of scholars in different fields in recent years [2,3,4]

  • Environmental preservation by firms has gained the increasing attention of scholars in different fields in recent years [2,3,4]. Earlier research in this area posed an interesting question in this context: what makes firms who are highly committed to protecting the natural environment different from less environmentally committed firms in developing countries with weak institutional environments? [5]

  • In business environments which are characterized by high levels of corruption, firms perceive less pressure to strictly implement costly environmental protection standards in their operational processes [17]

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Summary

Introduction

Environmental preservation by firms has gained the increasing attention of scholars in different fields in recent years [2,3,4]. Earlier research in this area posed an interesting question in this context: what makes firms who are highly committed to protecting the natural environment different from less environmentally committed firms in developing countries with weak institutional environments? Executive awareness of environmental issues is one of the primary steps for increasing a firm’s environmental responsibility [6,7,8]. Customers’ awareness about environmental problems and issues has increased in recent years [9] In order to have a better understanding of the origin of corporate environmental commitments, we need to identify those activities that enhance the generation and accumulation of environmental information inside organizations.

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