Motivations for Voluntary Environmental Management

Abstract

This article examines the motivations for firms to participate in voluntary environmental programs and to adopt environmental management practices using data gathered from a survey conducted in 2005 of facilities located in Oregon operating in six industrial sectors. It is one of the first studies of voluntary environmental management to include small‐, medium‐, and large‐sized facilities as well as to include both privately and publicly owned facilities. In particular, we examine the effects of both external factors such as regulatory, consumer, and investor pressures, and internal factors such as technical and resource capacity, in influencing voluntary environmental behavior. The intent is to describe potential influences that have implications for designing and implementing private and public policies that foster effective voluntary environmental management by firms. We find that larger facilities are more likely to participate in more voluntary environmental programs, but are likely to adopt more environmental management practices only if environmental issues are of significant concern to them. Presence of an R&D department stimulates the adoption of more environmental management practices, particularly if environmental issues are of significant concern to the facility, but does not have a statistically significant impact on participation in voluntary programs. We also find that while regulatory pressures are significant in motivating participation in voluntary programs and adoption of environmental management practices, competitive pressures are only important in motivating the former. Pressure from final good consumers or from investors in publicly traded facilities is not found to have a significant influence on voluntary environmental behavior of facilities in this study.