Beyond policy impacts: Internal strategic capabilities as determinants of industrial energy efficiency implementation

Abstract

Many countries have implemented policies to encourage higher Energy Efficiency (EE) implementation, but they seem insufficient and significant EE opportunities are unrealized. It is thus important to understand which internal strategic drivers can help further improve EE implementation by a firm. We develop a theoretical framework and empirically investigating how corporate strategy influences firms' EE implementation on top of EE policies. Drawing from the literature on Natural-resource-based view and Proactive Environmental Strategy, we hypothesize the impacts of several strategic capabilities, including shared vision, top management support and stakeholder integration on a firm's EE implementation. We test our hypotheses using combined secondary data of 572 publicly traded firms from the CDP report, COMPUSTAT Fundamentals North America and Global, and the World Economic Forum. Our study enriches the literature on firms' perceived EE drivers by dissecting the nuanced impacts of different strategic capabilities and exploring new dimensions. Our findings also suggest important policy insights in encouraging higher industrial EE implementation. It remains important to strengthen EE policies and regulation. However, to make further leaps in EE implementation, policy efforts could be spent in information campaigns helping redirect interpretation of EE improvements toward opportunities and away from risks/threats.