Get the balance right: lessons from UK higher education in managing environmental and economic performance

Abstract

ABSTRACT Since 2008, there have been a growing number of social policies placed on UK higher education institutions (HEIs) to engage in reducing carbon emissions and meet self-imposed carbon reduction targets while producing graduates, publishing research papers and attracting research income. HEI managers thus face the challenging task of having to determine the optimal level between environmental performance and economic performance – from activities that generate income, to which we refer as overall efficiency. To that end, the current study measures the overall efficiency levels of UK HEIs from 2012/13 to 2018/19 using a slacks-based measure model that incorporates bad outputs. The study aims to determine the extent to which the optimal balance between environmental performance and economic performance has been achieved as evidenced by the efficiency of HEIs over the course of the sample period. The study also identifies factors associated with efficiency and provides policy recommendations. Over the study period, overall efficiency (incorporating the bad output of carbon emissions) initially fell and then rose in the last 2 years suggesting some optimism that carbon emissions management has improved since then. The second-stage analysis, which identifies factors associated with efficiency, suggests that the ratio of students to staff and HEIs in the Russell group is positively associated with the efficiency of inefficient HEIs. When both efficient and inefficient universities are considered, having an environmental management system is positively associated with efficiency, while the opposite is the case for having science, engineering and medicine disciplines and having carbon reduction targets.