Motivations for Organisational Eco-Innovations: Adoption of Environmental Management Systems by UK Companies

Abstract

The aim of this paper is to identify the key drivers of organizational eco-innovations by looking at the motivations of UK companies for adopting Environmental Management Systems (EMS). Besides competitive, ethical, and institutional motives, this study considers the importance of the capabilities and internal resources that firms hold in stimulating EMS. The empirical analysis is based on unique firm-level data of 2853 UK manufacturing companies from the DEFRA survey “Environmental Protection Expenditure by Industry” in years 2005 and 2006. This new information allows us to examine the motives behind the environmental commitment of UK firms that include both externally certified EMS and in-house EMS. In our probit model estimations, the findings suggest that both in-house and externally certified EMS are driven by ethical/strategic (i.e. CSR) and institutional (e.g. environmental regulations) motivations. Also, enhanced environmental technological capabilities (e.g. environmental R&D) are prerequisites for both types of organizational eco-innovation. The results underline an important difference between externally certified and in-house EMS in that, the first is driven by competitive motivations (i.e. cost savings) whereas the latter is not affected by these factors.