Company's Environmental Practices Research Articles

Profitability and Market Value Effect on Carbon Emission Disclosures: The Moderating Role of Environmental Performance

Climate change is an issue that is of concern to the global public and scientific community. There is a close relationship between climate change and carbon emissions, which are the primary cause of global warming. Reporting on carbon emissions is essential for corporate accountability to stakeholders when evaluating a company's financial and non-financial performance. Good management of carbon emissions will enhance the company's reputation. This study analyses the impact of company profitability and market value on the disclosure of carbon emissions, with environmental performance serving as a moderating variable in the context of Indonesian public companies. This study concludes that: (1) There is no significant impact on profitability, as measured by Return on Assets, on Carbon Emission Disclosure; (2) The study finds that there is a statistically significant positive relationship between market value, measured by Tobin's Q, and the level of carbon emission disclosure. This relationship is significant at a 5% significance level; (3) The moderating effect of environmental performance on the relationship between profitability, as measured by return on assets, and carbon emission disclosure is found to be insignificant; (4) The significance level of 10% indicates that the relationship between environmental performance, as a measure of a company's environmental practices, and market value, as represented by Tobin's Q, is strengthened concerning the disclosure of carbon emissions. This research can contribute to developing accounting knowledge to close gaps in the body of knowledge regarding the disclosure of carbon emissions in developing nations, particularly Indonesia.

‘Say Cheese!': Humane halos from environmental practices in dairy production

Awareness of the negative impacts of our food choices on planetary, human and animal health is growing. Research shows an increasing number of consumers consider ethical consequences when purchasing food. A new market sector has emerged which caters to the demands of these value-driven consumers. However, attempts to change the market through ethical purchases may be thwarted by advertising strategies which exploit the ‘halo effect', a cognitive bias which manifests when first impressions of one attribute influence subsequent evaluations of unknown attributes. This research investigates how two ethical domains, environmentalism and animal welfare, interact to influence consumer choice. In an online experiment, we recruited 267 participants and randomly assigned them to read either a pro-environmental, anti-environmental, or ethically neutral vignette about a cheese company. After being asked to rate the dairy on how well it treats its cows—an issue on which no information had been provided—participants indicated how frequently they would recommend the cheese compared to other brands. Results confirm that information about the company's environmental practices influenced perceptions of its animal welfare practices: a ‘humane halo' effect. Further, humane ratings predicted product consumption recommendations, indicating the humane halo acted as a mediator. Exploratory analyses suggest the strength of this mediated relationship depends on participants' environmental protection values, particularly if they received negative information. Our findings establish the existence of a cross-domain halo in food ethics and shed light on ways to increase the effectiveness of policies designed to shift consumers to more sustainable diets.

The role of Environmental Innovation in enhancing the firm performance

Company environmental practices are able to create competitive advantage, which in turn enhances their performance. However, environmental practices are expensive and complex to realise the expected benefits, and require effective implementation, thus making them a risky proposition with high failure rate. Thus, it is essential for the company to identify the truly environmental capabilities, for enhancing the company environmental competitive and financial performance. This research aims To capitalize the role of Environmental Innovation in enhancing the firm performance. In this study, a total of 124 responses were collected from managers of EMS14001 certified manufacturers in Malaysia, and data was subjected to a structural equation analysis using the Smart PLS version 3.2.7 software. Results endorse environmental innovation as the key enabler for the creation of economic values from environmental management i.e. environmental performance. This is owing to its function as the sole factor that directly contributes to firm performance. Moreover, environmental innovation is also found to be the full mediator that translates benefits of environmental performance into financial performance.

The Factors Affecting the Environmental Practices of Companies: The Case of Serbia

Environmental practices are often considered external to the business, and the impacts of self-regulation and other CSR company practices on environmental practices are important but not fully understood—especially in transitional and developing countries. The aim of this paper is to explore factors that influence the environmental practices of companies operating in Serbia. We observed four types of self-regulations (core values, codes of conduct, ISO 9001, and ISO 14001); the level of CSR practices in relationships with employees, customers, the local community, and society, and related to business transparency; as well as company features related to types of operations (manufacturing vs. service), size, and internationalization (multinational ownership and export activities). Based on the SEM analysis of data collected from 178 companies operating in Serbia, the findings showed that smaller, manufacturing companies that applied the observed types of self-regulations, which have a higher level of employee relations and are more social and community involved, are more likely to have higher levels of environmental practice. Among the observed self-regulation types, only ISO 14001 certification proved to have an individual effect on company environmental practices. However, our results also showed that the influence of core values, applied codes of conduct, and ISO 9001 certification cannot be neglected.

Greenwashing and environmental communication: Effects on stakeholders' perceptions

AbstractSince the first Earth Day in the 1970s, corporate environmental performance has increased dramatically, and cases of greenwashing have increased sharply. The term greenwash refers to a variety of different misleading communications that aim to form overly positive beliefs among stakeholders about a company's environmental practices. The growing number of corporate social responsibility claims, whether founded or not, creates difficulties for stakeholders in distinguishing between truly positive business performance and companies that only appear to embrace a model of sustainable development. In this context, through the lens of legitimacy and signalling theory, we intend to understand and assess the different influences that various types of misleading communications about environmental issues have on stakeholders' perceptions of corporate environmental responsibility and greenwashing. Stakeholder responses to an environmental scandal will also be assessed. The hypotheses tested through a four‐for‐two design experiment reveal that different levels of greenwashing have a significantly different influence on stakeholders' perceptions of corporate environmental responsibility and stakeholders' reactions to environmental scandals.

Greenwashing and Environmental Communication: Effects on Stakeholders’ Perceptions

Since the first Earth Day in the 1970s, corporate environmental performance has increased dramatically, and cases of green-washing have increased sharply. The term green-wash refers to a variety of different misleading communications that aim to form overly positive beliefs among stakeholders about a company's environmental practices. The growing number of corporate social responsibility claims, whether founded or not, creates difficulties for stakeholders in distinguishing between truly positive business performance and companies that only appear to embrace a model of sustainable development. In this context, through the lens of legitimacy and signalling theory, we intend to understand and assess the different influences that various types of misleading communications about environmental issues have on stakeholders' perceptions of corporate environmental responsibility and green-washing. Stakeholder responses to an environmental scandal will also be assessed. The hypotheses tested through a four-for-two design experiment reveal that different levels of green-washing have a significantly different influence on stakeholders' perceptions of corporate environmental responsibility and stakeholders' reactions to environmental scandals.

How Have Green Companies Fared in Transactions with Banks? A Stakeholder‐Management Perspective

In a recent study, the authors investigated whether and to what extent a company's environmental practices and record affect the terms of its bank loans. The study reports evidence of a clear association between environment‐friendly corporate practices and both lower borrowing costs and less use of restrictive financial covenants. And consistent with the above findings, the authors also report that companies with better environmental practices have more stable income streams, lower leverage ratios, and higher future valuations. The authors also find that relationship (as opposed to first‐time) lenders respond to improvements in companies' environmental records by offering more favorable borrowing terms over time.Moreover, the authors find that the association between more effective environmental management and lower loan costs is more pronounced for corporate borrowers that operate in industries facing greater industry competition and stricter environmental regulation. In addition, borrowers with better records for green management are less likely to violate covenants, default on loans, or file for bankruptcy—a conclusion that should shed light on the current green finance policy debate among central banks and regulators as to whether they should reduce capital requirements or offer other policy inducements for bank financing of green assets.

Case study: Improving environmental management at Rhodia's Paulínia, Brazil chemical facility

AbstractAt the end of 1995, Lisě Monteiro, the engineer responsible for Industrial Security and the Environment at Rhodia, was seeking possible improvements that could be introduced into the company's environmental practices. He had noticed that one of the company's industrial units, the Adipic Acid Department at the Paulínia Chemical Plant complex, was getting good results in its efforts to control environmental pollution. An outside consultant was brought in to examine the department in greater depth to see what lessons might be learned from their experience that would help Rhodia improve its managerial procedures. This article details how this plant improved its environmental performance with many quality initiatives.

The South African Harvesting Code of Practice

SYNOPSIS The South African Harvesting Code of Practice is a set of guidelines developed by harvesting specialists to assist the Forest Industry to select correct harvesting and road construction practices that are consistent with appropriate environmental management principles. The focus is not only on “green issues” but on the effects of harvesting on ergonomics (worker's environment), economics, the natural environment and productivity. Environmental auditing is a management tool designed to protect and improve the environment by assisting management in the control of practices which may have an impact on the environment and to assess compliance with company environmental practices. The Harvesting Code of Practice will have an important role to play in setting environmental standards to be documented in company policies. The development of the Harvesting Code of Practice involved the evaluation of several other international codes, the assessment of local equipment and processes used and an investigation in their possible impacts on the working environment.