Study of determinants of proactive environmental strategies in India's power sector

Abstract

Abstract Why are some firms more environmentally proactive than their counterparts from the same industry? What are these factors, which are responsible for the adoption of proactive environmental strategies which are beyond the requirement of extant laws? The power sector is a critical sector for the development of infrastructure in a developing economy like India. The emissions from the power sector are a cause of concern for the environmentalists and stakeholders. Some firms are observed to be more environmentally proactive than others even though the regulatory requirements are same. This paper aims to identify the determinants of the adoption of proactive environmental strategies in the power sector in India. The available studies are generalised and very few are sector-specific. No such research is carried out specifically for the power sector in India. Statistical tools like SPSS (Statistical Programme for Social Science) and AMOS (Analysis of Moment Structures) are used to analyse the quantitative data collected through a questionnaire-based survey from major power sector companies. Reliability and validity of data collected are checked using Exploratory Factor Analysis. Subsequently, Confirmatory Factor Analysis is applied to identify the determinants of adoption of proactive environmental strategies. The identified determinants are ranked using Structural Equation Modelling. The study identifies institutional pressure, performance improvement, business practices, and market pressure and benefits as determinants. Institutional pressure and performance improvement emerge as determinants which are ranked higher as compared to other two. The specific contribution of the study is to provide an understanding for the policymakers in Indian power sector to recognise these determinants in the formulation of policies and guidelines for environmental protection.