Applying GRI reports for the investigation of environmental management practices and company performance in Sweden, China and India

Abstract

The relationship between environmental management practices (EMPs) and company performance has recently been debated in literature and is of interest for both industrial managers and political decision-makers. This paper investigates the relationship between EMPs and firm performance in manufacturing companies in Sweden, China and India. With the content analysis of Global Reporting Initiative (GRI) reports and financial reports of sample companies, the levels of EMPs and the companies' financial performances were coded. Further statistical assessment was conducted in order to identify patterns and correlations. The results indicate that only selected EMPs have been employed differently in three different countries. Most EMPs clearly do not have a positive correlation with the financial performance; i.e. employing EMPs does not necessarily improve the economic consequence of companies. Nevertheless, a number of EMPs do have a strong correlation with improving innovation performance in various companies. It is also interesting to note that a negative correlation exists between the Environmental standard for suppliers and Sales growth. This is possibly due to increasing operational costs and a delay in market acceptance. This research illustrates the possibility of using standard environmental data from GRI reports as a resource for future studies of EMPs. In order to improve long-term financial performance, this study also suggests that innovation should gain a substantial amount of attention when EMPs are employed.