Corporate Environmental Practices Research Articles

Doing more and doing better are two different entities: Different patterns of family control and environmental performance

AbstractFamily firms bear two types of agency costs, including type I and type II agency problems, in corporate environmental practices: (1) Outside executives at family firms hesitate to engage in environmental strategies, which can lead to drops in profits; (2) Controlling families employ opportunistically environmental management to achieve their interests. We argue that a primary cause for the agency problems lies on ineffective internal corporate governance at family firms, which can cause loss of managerial (or power) balance between outside executives and family executives. Our findings show that family firms with ownership and strategic control (FSC), which family executives and outside executives monitor and constrain each other, can achieve the highest environmental performance. Moreover, external controls, including product market competition and provincial environmental regulations, substitute effective internal control of FSC. The environmental performance premium of FSC is more prevalent when the production market competition is lower. Family firms with ownership, operational, and strategic control (FOSC) can achieve higher environmental performance within a province with more stringent environmental regulations.

The Practice of Environmental Training: A case of ISO 14001 Certified Businesses in Durban, South Africa

Environmental management has moved from a policy concept to a proactive strategy defining business responsiveness to stakeholder and market-related pressures towards improved environmentally sustainable business practices. There is increasing business responsiveness through corporate sustainability and environmental management practices. A growing number of environmental regulations make the adoption of environmental management systems such as ISO 14001 more common and this necessitates training. While environmental training is receiving international attention, it is seemingly less prominently investigated in the South African context. In this article, results from an empirical study into the environmental training practices of Durban businesses are presented. By applying the ISO 14001 certification criterion, 24 businesses were identified as research participants. The practice of environmental training was investigated considering three themes i.e. environmental attitudes and culture, training resources and commitment, and impediments to environmental training. In exploring these themes, the main questions of the extent of environmental training and its effectiveness are determined. It was found that environmental training is widely practised across all businesses sampled, with impact-focused training topics supported by positive environmental attitudes. However, other areas emerge as problematic, including limited organisational prioritisation of environmental training as well as insufficient further training topics which can limit the efficacy of training activities.Keywords: environmental training; environmental education; ISO 14001; Environmental Management Systems; corporate sustainability

Understanding the impact of symbolic and substantive environmental actions on organizational reputation

Research in corporate environmental practices has shown that stakeholders impose coercive and normative forces that drive firms to perform environmental protection actions. However, limited attention has been placed on how different constituents of stakeholders value the firm's environmental actions. By focusing on industry peers as a constituent of stakeholders, we examine how the firm's environmental actions impact its reputation. Based on institutional theory and signaling theory we propose that symbolic environmental actions negatively affect reputation, whereas substantive actions improve firm's reputation among its peers. Building on the notion of signaling process, the authors also observe that a firm's reporting practices moderate positively the negative effect of symbolic actions. Data from a sample of 213 publicly traded firms operating in polluting industries from 2006 to 2013 support these results. The findings emphasize the danger of using symbolic actions to signal environmental commitment in a context of high-involvement information search and opportunistic behaviors.

Impact of governance structures on environmental disclosures in the Middle East and Africa

PurposeThis study aims to investigate the impact of corporate governance structures on environmental disclosure practices in the Middle East and Africa (MEA).Design/methodology/approachThe research model uses a panel data set of 121 publicly listed (non-financial and non-utility) firms from 11 MEA countries over the period 2010-2017, uses alternative dependent variables and regression techniques and is applied to various sub-groups to improve robustness.FindingsThe empirical results strongly indicate that MEA firms with high governance disclosures tend to have better environmental disclosure practices. The board characteristics of gender diversity, size, CEO/chairperson duality and audit committee size impact positively on MEA firms’ voluntary environmental disclosures, whereas board independence has a negative influence.Research limitations/implicationsThis study advances research on the relationship between corporate governance structures and environmental disclosure practices in MEA countries, but is limited to firms for which data are available from Bloomberg.Practical implicationsThe results have important practical implications for MEA policymakers and regulators. The positive impact of board gender diversity on firms’ environmental disclosures, policy reforms should aim to increase female directors. MEA corporations aiming to be more environmentally friendly should recruit women to top managerial positions.Originality/valueThis is thought to be the first study to provide insights from the efficiency and legitimation perspectives of neo-institutional theory to explain the relationship between MEA firms’ internal governance structures and environmental disclosures.

Enhancing sustainability in the contemporary model of CSR: a case of fast fashion industry in developing countries

PurposeThis study aims to point out the importance and the relevance of sustainability issues and the need for their enhancement in the contemporary model of corporate social responsibility (CSR) as the top priority for business entities. Furthermore, it also highlights ways to enhance sustainability in the contemporary CSR model in the fast fashion industry of developing countries.Design/methodology/approachLiterature review has been extensively done through available databases, including ProQuest and ScienceDirect.FindingsThis study delivers a full insight into the current state of research on the CSR model and sustainability in developing countries. The prevalent corporate environmental sustainability practices of global apparel brands are identified to propose ways to enhance sustainability in the contemporary CSR model.Research limitations/implicationsThe growth of fast fashion industry brings the risks of unsustainability to developing countries. Thus, it is a must for the garment and textile companies to enhance a sustainable CSR model through promoting sustainable leadership and integrating corporate culture.Originality/valueTo the best of author’s knowledge, this study is the first to emphasise the role of sustainable leadership in promoting a sustainable CSR model in the fast fashion industry of developing countries.

Corporate Environmental Disclosure Practices in Vietnam

The purpose of the paper is to examine the extent of corporate environmental disclosure (CED) made by some major Vietnam listed firms (VLFs) on their annual reports, corporate governance reports and sustainability reports (if any) for the years 2017 to 2018 since some firms have not published sustainability reports for the year 2018 yet. And study also aims to support people with the overview of the importance and level impact of CED for business operations and stakeholders as well. Hence, with the theoretical framework of CED, international experience of CED, and the examination of situation of CED of some major VLFs in Vietnam, we would like to create the motivation, aspiration for readers to learn more about CED so that the form of disclosing environmental information will become familiar with other company annual reports.

The impact of corporate social and environmental practices on the cost of equity capital: UK evidence

PurposeThere has been an ongoing call from various groups of stakeholders for social and environmental practices to be integrated into companies’ operations. A number of companies have responded by engaging in socially and environmentally responsible activities, while others choose not to participate in these activities, which incur additional costs. The absence of consensus regarding the economic implications of social and environmental practices provides the impetus for this paper. This study aims to examine the association between corporate social and environmental practices (CSEP) and the cost of equity capital measured by fourex antemeasures using a sample of UK listed companies.Design/methodology/approachFirst, we undertake a review of the extant literature on CSEP. Second, using a sample of 236 companies surveyed in “Britain’s most admired companies” in terms of “community and environmental responsibility” during the period 2010-2014, we estimate four implied a cost of equity capital proxies. The relationship between a companies’ cost of equity capital and its CSEP is then calculated.FindingsThe authors find evidence that companies with higher levels of CSEP have a lower cost of equity capital. This finding determines the significant role played by CSEP in helping users to make useful decisions. Also, it supports arguments that firms with socially responsible practices have lower risk and higher valuation.Practical implicationsThe finding encourages companies to be more socially and environmentally responsible. Furthermore, it provides up-to-date evidence of the economic consequences of CSEP. The results should, therefore, be of interest to managers, regulators and standard-setters charged with developing regulations to control CSEP, as these practices are still undertaken on a voluntary basis by companies.Originality/valueTo the best of the authors’ knowledge, this is the first study to investigate the association between CSEP of British companies and their cost of equity capital. The study complements Ghoulet al.(2011), who examine the relationship between CSR and the cost of equity capital of the US sample. The authors extend Ghoulet al.(2011) by using a sample of the UK market after applying International Financial Reporting Standards.

The Deterrence Effect of a Penalty for Environmental Violation

The response to the penalty for an environmental violation on the firm level is a matter of reactive corporate environmental practices, about which the existence of a penalty is critical for environmental public policy. We propose that a penalty acts as a deterrence signal to enhance the perceived threat of legal punishment and the peer effect serves as the path through which peer firms learn from target firms. Based on the peer effect among firms and the deterrence effect in criminal economics, we investigated whether and how the peer firm responds to the penalty for environmental violation of target firms in the same industrial sector. Using samples of Chinese listed firms from 2008 to 2015, this paper finds that the penalty for the target firms can increase the peer firms’ environmental investment, and compared to the sample with low-level environmental regulation, the increase in the sample with high-level environmental regulation is more significant. These findings suggest that a penalty for target firms has a deterrence effect on peer firms and the environmental regulation strengthens the above deterrence effect. This is expected to help both theorists and practitioners achieve a better understanding of the implementation of a penalty for an environmental violation.

Environmental Disclosure Practice of Nepalese “A” Listed Companies

The disclosure of environment related information is an inevitable component of corporate social reporting paradigm. Due to growing awareness to protect environment, firms around the globe are supposed to be involved in activities in protection and betterment of environment. The stakeholder theory suggests for considering stakeholders while making corporate strategies and reporting them information including initiations done in behalf of environmental responsibility. This paper attempts to study the corporate environmental disclosure practice of selected 45 NEPSE “A” listed companies of Nepal. Different ten measures of this environmental theme were considered for analysis. Content analysis was applied to know the extent of disclosure practice of the companies and variance test to examine variations in environmental disclosure of the companies within seven industry types. The result of content analysis indicated that disclosure status of environment information related items is very low and there is a significant variation in environmental disclosure practice of the companies across seven industry types.

Corporate Environmental Disclosure Practices in Different National Contexts: The Influence of Cultural Dimensions

The influence of different national contexts, including the effects of cultural environments, on corporate environmental disclosure practices has yet to be properly addressed in the literature. The purpose of this research is, therefore, to analyse how cultural factors affect the environmental disclosure practices of companies in different countries. This research is supported by the diversity of cultures across countries. Given that a cultural framework prompts different organisational actions and strategies, the question to be answered through this research is as follows: How do cultural aspects affect corporate environmental disclosure? Cultural factors are precisely those that can explain similarities and differences between stakeholders’ actions and preferences. The sample used in this research comprises companies in 28 countries and 9 economic sectors for the period 2004 to 2015. Our main findings show that companies operating in countries with individualist, masculine and indulgent cultures are less likely to disclose environmental information. Contrary to our predictions, cultures with a long-term orientation also discourage the reporting of environmental information, while uncertainty avoidance contexts tend to promote more environmental reporting.

An Investor Perspective on the Black Box of Corporate Social Responsibility

In summarizing the findings of their recent study, the authors report findings that suggest that not all socially responsible corporate policies are likely to have the same effect on a company's ownership and value. Using environmental policy as their proxy for CSR activities, the authors classify corporate environmental practices into two categories: (1) actions that reduce the likelihood of harmful outcomes by reducing the corporate exposure to environmental risk; and (2) actions that enhance companies' perceived ‘greenness’ through investments that go beyond both legal requirements and any conceivable risk management rationale.Although both groups of environmental practices are likely to be viewed as socially beneficial, corporate expenditures that reduce a firm's environmental risk exposure are more likely to benefit shareholders by limiting the risk of losses arising from environmental accidents, lawsuits, and fines—and possibly thereby reducing the firm's cost of capital. By contrast, corporate expenditures that enhance the firm's perceived greenness by going beyond legal requirements and risk management rationales could actually reduce shareholder value.Consistent with this hypothesis, the authors find that institutional investors tend to own smaller than average percentages of both companies the authors identify as ‘toxic’ and make limited efforts to manage their environmental risk, and companies they label ‘green’ with low environmental risk exposure but relatively high CSR spending on the environment. At the same time, such investors hold larger‐than‐average positions in ‘neutral’ companies with relatively low, or effectively managed, environmental risk exposures and limited investment in ‘greenness’ programs. The authors also find that both toxic and green companies have lower (Tobin's Q) valuations than neutral companies, and that otherwise toxic companies that effectively manage their environmental risk exposures have higher valuations.

The mediating effect of green innovation on the relationship between green supply chain management and environmental performance

The emerging environmental awareness of the public, as well as the implementation of governmental regulations, force organisations to employ corporate environmental practices such as green supply chain management (GSCM) and green innovation. Accordingly, both practices are crucial to achieve professional improvement in the environmental performance of these organisations. However, research on the relationship of GSCM, green innovation, and environmental performance is relatively rare. Therefore, this study is aimed to provide empirical evidence showing that GSCM and green innovation practices significantly improve environmental performance in order to encourage organisations to implement these practices. In addition, this study investigates the relationship between GSCM and green innovation practices and the influence of these practices on the environmental performance in 123 manufacturing organisations with ISO 14001 certification. The results of PLS-SEM revealed that there is a significant and positive relationship between GSCM and green innovation, and the environmental performance. Moreover, green innovation had a positive effect on the environmental performance. Furthermore, green innovation had a mediating relationship between GSCM and environmental performance. Therefore, the present paper confirmed the significant influence of GSCM on boosting the green innovation of organisations and on the manufacturing establishments, which eventually improve the environment. In brief, the outcomes of this study provide enhanced understanding about the significant role of green innovation in the manufacturers for improving their GSCM and organisational environmental performance.

Environmental Disclosure Practice of Nepalese “A” Listed Companies

The disclosure of environment related information is an inevitable component of corporate social reporting paradigm. Due to growing awareness to protect environment, firms around the globe are supposed to be involved in activities in protection and betterment of environment. The stakeholder theory suggests for considering stakeholders while making corporate strategies and reporting them information including initiations done in behalf of environmental responsibility. This paper attempts to study the corporate environmental disclosure practice of selected 45 NEPSE “A” listed companies of Nepal. Different ten measures of this environmental theme were considered for analysis. Content analysis was applied to know the extent of disclosure practice of the companies and variance test to examine variations in environmental disclosure of the companies within seven industry types. The result of content analysis indicated that disclosure status of environment information related items is very low and there is a significant variation in environmental disclosure practice of the companies across seven industry types.

The antecedents of corporate social and environmental responsibility discourse in Pakistan: Multiple theoretical perspectives

The primary purpose of the study is to explore the antecedents of corporate social and environmental responsibilities discourse practices in Pakistan. The industry sensitivity, government shareholding, block holder ownership, print media coverage, environmental monitoring programs, and strategic posture are examined as antecedents of corporate social and environmental responsibility practices. A multidimensional theoretical perspective namely stakeholder theory (ST), institutional theory (IT), agency theory (PAT), and legitimacy theory (LT) is used to conceptualize the phenomena. All the four of perspective theories (positive accounting theory, legitimacy theory, stakeholder theory, and institutional theory) claim that there are ‘pressures’ that impact the organization. How much ‘pressures’ are recognized, managed or satisfied differs from one perspective of theory to the other. To estimate the data, this study uses three sets of panel data models, i.e., the pooled ordinary least squares model (POLS) or constant coefficients model, fixed effects (FEM or least squares dummy variable/LSDV model) and random-effects models. The final sample is comprising of 173 firms over eight years from 2011 to 2017. The firms listed in PSX are included in the sample. Overall the findings of the study have shown agreement with the proposed results. However, the study has provided more support to the institutional theory and stakeholder theory. Keywords: Corporate Social Responsibility, Stakeholders Theory, Agency Theory, Pakistan

The Implementation of Corporate Social and Environmental Responsibility Practices into Competitive Strategy of the Company. Marketing and Management of Innovations

The Implementation of Corporate Social and Environmental Responsibility Practices into Competitive Strategy of the Company. Marketing and Management of Innovations

Interplay between information systems and environmental management in ISO 14001-certified companies

PurposeThe purpose of this paper is to identify the contributions of information systems (IS) for the evolutionary process of corporate environmental management by highlighting implications for big data research.Design/methodology/approachThe authors conducted two case studies with Brazilian enterprises certified by ISO 14001, by conducting interviews, document analysis and direct observation. Implications for a research agenda on big data are also presented.FindingsAs results, the authors present the identification of the main contributions of IS for the evolution of environmental management in the studied cases. The authors found that advanced stage regarding IS may be considered a factor that implies a more effective environmental management.Originality/valueThe main contribution of this research consists of the presentation of a framework that identifies the support of IS for corporate environmental practices. By confirming the relation between IS and maturity levels of environmental management, the authors highlight that application of big data has the potential of boosting the relation between IS and corporate environmental management.

Revisiting the relationship between corporate governance and corporate social and environmental disclosure practices in Pakistan

PurposeThis study aims to revisit the corporate social and environmental disclosure (CSED) practices of Pakistani companies using unique CSED index which measures the CSED through three dimensions such as theme, news type and nature of information. In addition, the effect of board composition, ownership structure and corporate characteristics on CSED was tested through performing multiple regression analysis.Design/methodology/approachFor this purpose, data were collected from annual reports of top 120 companies’ selected based on market capitalization for three years period of 2013-2015.FindingsBased on the descriptive statistics, the results found that overall level of CSED in Pakistan is moderate. However considering CSED using three dimensions, the results demonstrate that highest level of disclosure on the basis of theme is reported in terms of human resource category as compared to other categories where, as in terms of news type and nature of information, analysis shows that companies in Pakistan feel resistant to disclose bad news, monetary and non-monetary aspect of CSED information. Using multiple regression analysis, the results found that all the variables have hypothesized relationship with CSED except government and institutional ownership. The variables such as chairman as non-executive director, board diversity, appointment of independent director as audit committee chairman, CSR committee, industry type and firm size are found to have significant influence on the CSED practices in Pakistan.Research limitations/implicationsThese results imply that the CSED phenomenon is still lacking behind. Under individual categories of CSED, descriptive statistics found that environment is still not a matter of concern for companies operating in Pakistan. In addition, the results demonstrate that CSED practices are only performed by very few companies in Pakistan based on standard deviation. In addition, appointment of non-executive and independent director as chairman of board and audit committee and representation of foreigners on the board should be encouraged in order to improve CSED practices in Pakistan.Originality/valueThis study contributes to the existing literature in developing country like Pakistan through using unique CSED index and also making comparison of financial versus non-financial sectors. The author suggests that regulatory authorities in Pakistan must take reasonable steps to make the company’s operations environment-friendly.

Institutional pressure and the implementation of corporate environment practices: examining the mediating role of absorptive capacity

PurposeContemporary frameworks on institutional theory and corporate environmentalism observe that institutional fields positively influence a firm’s environmental response in the form of implementation of environmental practices. These frameworks, however, provide little evidence on why firms facing similar institutional field differ in their environmental response. This paper aims to incorporate the intra-organizational dynamics within the traditional institutional theory framework to address this heterogeneity, examining specifically the role of absorptive capacity for environmental knowledge in the organizational implementation of corporate environmental practices.Design/methodology/approachIntegrating the institutional theory and resource-based view, this paper examines the mediating role of absorptive capacity in the relationship between institutional pressure for corporate environmentalism vis-a-vis the implementation of corporate environmental practices. Partial least square structural equation modeling was used for hypotheses testing based on data obtained from the Indian apparel and textile industry.FindingsThe results support the mediating role of absorptive capacity in the relationship between institutional pressure and implementation of corporate environmental practices. Further, this study highlights the importance of acquisition and utilization of environmental knowledge in driving environmentalism through developing absorptive capacity; the findings also suggest that the role of institutional pressure in the implementation of environmental practices should not be analyzed in isolation but rather in conjunction with the development of absorptive capacity that forms the internal basis of implementation.Practical implicationsManagers need to focus on the development of organizational capabilities for acquiring and exploiting environmental knowledge to complement their preparedness in responding to any institutional pressures for environmental sustainability. Firms also need to link their environmental orientation with various sources of environmental knowledge and capabilities residing outside the organizational boundaries. It is important to note here that the development of absorptive capacities for the exploration and exploitation of external knowledge is indeed both required and necessary to build sustainable organizational capabilities.Originality/valueThis paper is among the very few studies that address the issue of knowledge and development of related organizational capabilities for corporate environmentalism. Recognizing that environmental knowledge resides outside organizational boundaries with regulatory agencies and special interest groups, this paper highlights the importance of developing organizational capabilities for the acquisition and exploitation of environmental knowledge.

Proactive Corporate Environmental Responsibility and Financial Performance: Evidence from Chinese Energy Enterprises

With increasing concerns about environmental issues and the advancement of China’s “going global” strategy, a new issue-proactive corporate social responsibility has emerged. Proactive corporate environmental responsibility refers to business actions that go beyond regulatory requirements for supporting sustainable environmental development. This study examines the role of proactive corporate environmental responsibility on corporate financial performance in the Chinese energy industry by the multi-variables regression analysis of panel data. Using data of 264 firm-year observations from 2009–2014 in the energy industry, the results showed that Proactive corporate environmental responsibility has a positive effect on corporate financial performance passing the endogeneity test. The results also demonstrate that private ownership has stronger promotion on the relationship between proactive corporate environmental responsibility and corporate financial performance. This study helps to increase the body of knowledge about proactive corporate environmental responsibility of the emerging economy, provides insights into the corporate environmental responsibility practice, and government environmental regulation and policy.

Editorial Note

Editorial Note