Environmental Performance Measurement Research Articles

Managerial practices and firms' environmental performance: An international evidence

AbstractThis study investigates the impact of managerial practices on environmental performance using firm‐level data from Eastern European and Central Asian regions collected during the 2019–2020 period through the World Bank Enterprise Surveys. Utilizing principal component analysis, we evaluate managerial practices across four key dimensions: targets, monitoring, incentives, and operations. Concurrently, we assess environmental performance through indicators encompassing energy efficiency, energy intensity, and disclosure practices. Our empirical findings highlight a strong correlation between higher scores in managerial practices and improved environmental performance within firms. These positive effects are transferred through environmental targets and adoptions, with moderation observed based on firm size. Robustness is evident in our results across various measures of environmental performance and managerial practices, as well as when accounting for potential endogeneity issues. This research offers valuable insights with implications for both policy development and managerial decision‐making, fostering sustainability and responsible practices.

Research on Environmental Performance Measurement and Influencing Factors of Key Cities in China Based on Super-Efficiency SBM-Tobit Model

In recent years, China has experienced significant economic growth and some degree of environmental pollution control. However, achieving a perfect balance between the environment and economic development remains a challenge. In order to seek solutions to this issue and promote the sustainable development of cities, this paper starts from the urban level, which is relatively lacking in existing research. Based on the panel data of urban indicators from 2013 to 2021, it quantifies the environmental performance of key cities using the slack-based measure (SBM) model of super-efficiency based on a non-expected output. Furthermore, it utilizes the Tobit panel regression model suitable for limited dependent variables to analyze the impact of driving factors on the environmental performance of key cities, and it further explores the reasons for the loss of urban environmental performance from the dual perspectives of inputs and outputs. The research findings indicate the following. (1) The average environmental performance of 30 key cities has shown an increasing trend but has not yet reached a valid state. The cities’ environmental performance rises in the range of [0.444, 0.821], indicating that there is room for improvement in urban environmental management. (2) Cities in the northeastern region of China have lagged behind the eastern, central, and western regions in terms of environmental performance over this nine-year period, and the redundancy of undesirable outputs is partly responsible for this decline. (3) The large proportion of the secondary industry, the number of vehicles on the road, and the population density have a significantly negative impact on urban environmental performance, while the per capita regional GDP and urban maintenance and construction funds make a positive difference. These research findings provide a scientific basis and valuable insights into urban environment performance enhancement and can serve as a reference for areas in need of balanced development between the urban environment and economic growth.

ESG rating results and corporate total factor productivity

As a measure of corporate environmental, social, and governance (ESG) performance, ESG ratings have increasingly gained attention from corporations, the public, and government agencies, gradually becoming a key factor influencing their perceptions and decision-making regarding corporations. This study explores the impact of corporate ESG ratings on Total Factor Productivity (TFP) and its underlying mechanisms. Using listed companies in China as the research sample, it was found that higher ESG ratings significantly enhance corporate TFP, a conclusion that holds even after conducting robustness checks and addressing endogeneity issues. Further analysis indicates that high ESG ratings improve corporate TFP by reducing financing constraints and increasing government subsidies. Heterogeneity analysis shows that the effect of ESG ratings on enhancing TFP is more pronounced for corporations with high levels of attention, good reputations, and high audit quality. Additionally, the study also examines whether ESG ratings can serve as an effective predictor of corporate TFP. By applying machine learning algorithms for validation, the results show that incorporating ESG ratings significantly improves the accuracy of predictions for corporate TFP.

Environmental Performance and Firm Value: Profitability as a Moderator

The objective of this study was to ascertain how the firm's value is influenced by environmental performance, using profitability as a moderating factor. Additionally, it sought to compare firm value, profitability, and ecological before, during and after Covid-19. The study used secondary data for a sample size of 50 manufacturing companies and participants in PROPER from 2019 to 2022. The results show no discernible relationship between firm value and environmental performance. The correlation between firm value and environmental performance is strengthened by the noteworthy positive moderation effect of probability. The firm value continued to drop both during and after the Covid-19 era. Environmental performance and profitability during COVID-19 show a decrease, but after 2022, both tend to be able to increase again, similar to the pre-COVID-19 period. The originality of this research lies in examining the comparisons before, during and after COVID-19 on environmental performance, firm value and profitability. Future research ideas include utilizing additional independent variables (e.g., CSR, company size, board of commissioners) that can impact firm value, as well as using alternative environmental performance measurements other than PROPER

The Role of Ecopreneurship in Bali’s Sustainable Tourism Development: Insights into Government Policy, Tourist Awareness and Preferences

There are numerous environmental issues in Bali, a popular tourist destination in Indonesia, including the problems of waste, critical land, beach abrasion, coral reef destruction and water contamination, all attributed to the rapid expansion of the tourism industry. Ecotourism is one of the solutions to address these concerns, and the initiatives taken involve ecopreneurship, the process of starting and running green firms that support sustainable tourism growth in Bali. The goal of ecopreneurship in the tourism industry is to create and run enterprises that have as minimum negative environmental impacts as possible, while maximising positive social and economic consequences. This is done through improvements on both public policies and tourist preferences, to promote a sustainable tourism development. A mixed method was used, combining SEM PLS, Path Methods, and qualitative research, with comprehensive interviews conducted among ecopreneurs, government agencies, tourists, and academics in Bali. Ecopreneurship variables, comprising environmentally friendly products and services, green technology innovation, environmental and natural resource management, local community involvement, environmental education and awareness, waste and emission management, collaboration and partnerships, measurement of environmental performance and sustainability, moderated by the government policy and tourist awareness and preference, were found to have a significant influence on sustainable tourism variables, namely, natural environment preservation, social welfare and culture, local economic empowerment, resource management and environmental impact reduction, local community participation and public consultation.

Causal analysis of Canada’s environment-growth nexus for inclusive development metrics

Little is known about the relevance of alternative measures of growth in environmental and developmental economic analyses. In Canada, for example, no literature exists on whether there is a causal link between the level of environmental performance and alternative measures of economic progress (which are argued to better capture the overall economic wellbeing than the gross domestic product—GDP). As environmental policies may relate to overall economic wellbeing, we opine that understanding overall economic progress is essential for achieving sustainable development and emissions reduction targets. This paper addresses a knowledge gap by assessing the causal links and directions between Canada’s national-level greenhouse gas emissions (GHG—as an indicator of environmental performance) and three alternative measures of economic growth, namely, gross national disposable income (GNDI), human development index (HDI), and index of economic freedom (IEF); from 1995 to 2019. Our results indicate that causality exists between Canada’s GHG and the alternative growth measures. This implies that Canada’s GNDI, HDI, and IEF may be useful and complementary to GDP in forecasting the national-level total GHG emissions. The research provides insights to further consider the role of overall economic wellbeing in the quest for sustainable, lower-emissions, economic development in Canada and by extension in other nations.

Evaluation of Biochar Addition to Digestate, Slurry, and Manure for Mitigating Carbon Emissions

The contribution of animal waste storage on GHG emissions and climate change is a serious issue for agriculture. The carbon emissions that are generated from barns represent a relevant source of emissions that negatively affect the environmental performance measures of livestock production. In this experiment, CO2 and CH4 emissions from different animal wastes, namely, digestate, slurry, and manure, were evaluated both in their original form and with a biochar addition. The emissions were monitored using the static camber methodology and a portable gas analyzer for a 21-day period. The addition of biochar (at a ratio of 2:1 between the substrates and biochar) significantly reduced the emissions of both gases compared to the untreated substrates. Slurry exhibited higher emissions due to its elevated gas emission tendency. The biochar addition reduced CO2 and CH4 emissions by 26% and 21%, respectively, from the slurry. The main effect of the biochar addition was on the digestate, where the emissions decreased by 45% for CO2 and 78% for CH4. Despite a lower tendency to emit carbon-based gases of manure, biochar addition still caused relevant decreases in CO2 (40%) and CH4 (81%) emissions. Biochar reduced the environmental impacts of all treatments, with a GWP reduction of 55% for the digestate, 22% for the slurry, and 44% for the manure.

Reducing Industrial Water Consumption: The Impact of Organizational Learning

Using factory-level data from a large multinational manufacturer, we examine the effects of both organizational experience and knowledge transfer on an increasingly critical environmental performance measure, the consumption of water required for manufacturing. We estimate the direct effects on water consumption from in-factory cumulative production experience and the vicarious learning from peer factories in the same product category. We consider vicarious learning from three potential sources: observation of peer factories’ cumulative production experience; and benchmarking of water consumption performance with the best and worst performing peer factories. For each learning channel, we test for the moderating effects of water scarcity and geographic proximity. We find that factories learn to reduce their water consumption from their own experience but at a greater rate in water-scarce locations. Although we find that factories learn significantly from observing the cumulative production experience of peer factories, this effect does not hold in water-scarce locations or across geographic regions. We document that learning effects from observing others’ experience are quite distinct from learning effects by benchmarking others’ performance. We find vicarious learning effects from benchmarking the best-performing peer factories result in significant reductions in water consumption, and this effect is greater when the factory is in a water-scarce location, and when benchmarking other regions rather than within the same region. Finally, we find less significant vicarious learning from observing the worst-performing factories.

Approach for the Development of a Sustainability-oriented Implementation Strategy of Smart Automation Technologies

With respect to the increased demands on sustainability, Smart Automation is a promising solution to realize an improvement of the environmental impact of production systems. However, the majority of companies are limited in their ability and resources to simultaneously install several technologies. Consequently, the selection and prioritization of technologies in terms of implementation strategies with a particular focus on the environmental impact is a major challenge for manufacturing companies. It is therefore the objective to introduce a framework for decision support for implementation strategies for Smart Automation technologies with special emphasis on environmental impact of the measures taken. An integral part of the approach is the identification of appropriate indicators for environmental performance measurement as well as location factors that may influence environmental impacts. In addition, a conceptual framework and an analysis of the net of bilateral interdependencies of the three pillars environmental location factors, Smart Automation technologies, and performance indicators are developed. Subsequently, these interdependencies are transferred to an assembly system using the methodology of hybrid modeling and simulation. Finally, the developed approach is validated in cooperation with a manufacturing company.

The Impact of Green Supply Chain Management Practices on Environmental Performance Metrics in Retail Organizations

The relationship between environmental performance measures and Green Supply Chain Management (GSCM) techniques in the retail industry is examined in this study. A large sample of retail companies' GSCM adoption rates and related environmental indicators were examined using a quantitative study design. The results showed that there were notable differences in the adoption of GSCM, and that organizational commitment affected sustainability initiatives. Adoption of GSCM at high levels was positively connected with positive environmental effects, consistent with previous research. The research highlights the significance of customized sustainability strategies and offers practical advice to retail establishments looking to improve their environmental stewardship in response to changing consumer demands.

Mapping the empirical relationship between environmental performance and social preferences: Evidence from macro data

This paper investigates the relationship between measures of environmental performance and of social preferences, thanks to the availability of a recently published dataset on global pref- erences. Using cross-sectional observations from 76 countries, this study finds evidence from macro data of a positive and statistically significant relationship between measures of proso- cial preferences, such as positive reciprocity, trust, and altruism, and environmental policy indicators in the categories of agriculture, forestry, and climate change after controlling for economic and geospatial factors. At the micro level, the results presented in this paper suggest a broader theory of collective action that is based on a behavioral approach to climate policy to mitigate motivational crowd out in settings of high reciprocity and trust. At the macro level, the results presented in this paper suggest a broader theory of climate clubs that includes pro- social preferences, such as positive reciprocity, trust, and altruism, as key cooperation mech- anisms in International Environmental Agreements.

G7 Ülkeleri ve Türkiye'nin ENTROPY, CRITIC ve EDAS Yöntemleriyle GGGI Göstergelerine Göre Sıralaması ve Değerlendirilmesi

The rapid increase in industrialization in societies causes environmental problems to emerge as an important problem. In all societies, the approach to the environment is becoming more sensitive and it is observed that studies on environmental performance have started to increase. The Global Green Growth Index (GGGI), an important measure of environmental performance, has been publishing reports comparing countries' performance scores since 2005. This study examines the changes in the rankings in the post-2010 period by using the Global Green Growth Index data to determine the environmental performance rankings of G7 countries and Turkey. The main objective of the study is to contribute to the realization of sustainable development by determining the position of G7 countries and Turkey according to GGGI. In the study, the performance ranking of the countries for the years 2010-2020 was made by using the ENTROPI and CRITIC weighting methods, which are among the Multi-Criteria Decision Making methods (MCDM), and the EDAS ranking method. In addition, sensitivity analysis was performed to determine the importance of criterion weights affecting performance rankings. While Germany exhibits the best performance in general, it is observed that Turkey performs lower than developed countries. It has been determined that the indicator of efficient and sustainable resource use has a significant impact on the environmental performance of countries.

Pollution control bonds and environmental performance in energy utility firms: is there an incantation effect?

PurposeThis study aims to examine the effects of green financing through pollution control bonds (PCBs) on environmental performance.Design/methodology/approachThis study is based on a panel of 189 US energy utility firms observed over the period, 2011–2021 ; this study applies Generalized Method of Moments regressions.FindingsThis study found that PCBs positively affect environmental performance (aggregate measure, greenhouse emissions, waste landfill, waste incineration and waste recycling). These findings remain robust when this study considers alternative measures of PCBs and environmental performance, the quantile regression method and some firms’ attributes such as financial performance and firm age.Practical implicationsThe results indicate that US energy utility firms have to adopt more PCBs. This study helps researchers, practitioners, shareholders, bondholders, equity analysts and local authorities such as the California Pollution Control Financing Authority, municipalities and investors understand PCBs issuance, usefulness and relevance.Originality/valueTo the best of the authors’ knowledge, this study is the first to explore the effectiveness of PCBs in reducing pollution.

Exploring the Measurement of Environmental Performance in Alignment with Environmental, Social, and Governance (ESG): A Qualitative Study

Exploring the Measurement of Environmental Performance in Alignment with Environmental, Social, and Governance (ESG): A Qualitative Study

The Relations Among Environmental Performance, Profitability, Firm Size, Firm Value, And Environmental Disclosure: A Case Study of Basic Material Industry

Environmental Disclosure is a information related to the environment, and is presented in financial statements. Financial Accounting Standards do not yet mandate corporate responsibility for environmental disclosures. This study aims to examine the factors that determine environmental disclosure in Indonesia. This research uses quantitative research methods, using secondary data of annual reports and sustainability reports from companies listed on the Indonesia Stock Exchange, especially companies engaged in the Basic Material sector. The data collection of this study used purposive sampling method with several criteria. The test tool used in multiple regression analysis is the Eviews program version 10. Environmental Disclosure uses GRI (Global Reporting Initiatives) standard indicators. Environmental Performance uses the performance ratings in PROPER. While profitability uses ROE (Return on Equity) indicators. Firm Size uses the Asset Growth indicator, and Firm Value uses the Tobin'sq indicator. The results of this study partially show that the firm size variable has an influence on the environmental disclosure variable. Environmental disclosure is not influenced by measures of environmental performance, profitability, or business value. But simultaneously all independent variables, namely environmental performance, profitability, firm size, and firm value affect environmental disclosure.

The orchestration of green supply chain management practices to enable performance measurement and evaluation

This study aims at investigating the relationship between the implementation of green supply chain management (GSCM) practices and the implementation of environmental performance measurement and evaluation (EPME) practices. The theoretical model was empirically validated using structural equation modelling in a survey of 199 Brazilian managers working in sustainability areas. We introduce a novel framework that bridges systems theory with the practice-based perspective of firms. The framework advances the current understanding of factors influencing EPME adoption, structuring GSCM practices as system components: inputs, processes, outputs, and feedback loops. More specifically, we identify the direct effects of different GSCM practices in the implementation of EPME but also indirect effects cascading through input, process, output, and feedback loop practices. Our research addresses industry needs for guidance on how to implement GSCM practices and facilitate EPME. Managers need to orchestrate the adoption of GSCM practices in each of these system components by monitoring of inter-organisational and intra-organisational activities of their supply chains. Both EPME and feedback loop practices (e.g. customer collaboration) are key to achieving benefits concerning the environmental impact of supply chain operations.

Beyond CO2 emissions – The role of digitalization in multi-dimensional environmental performance measurement

Beyond CO2 emissions – The role of digitalization in multi-dimensional environmental performance measurement

Bridging the gap: Building environmental, social and governance capabilities in small and medium logistics companies

Nowadays, the popularity of environmental, social, and governance (ESG) performance measurement has dramatically increased, particularly to listed companies, for supporting various investment decisions. Companies with high ESG scores imply that their ongoing business development is recognised to be economically, socially, and environmentally sustainable. From the current ESG measurement practice, the measurement frameworks are built on rating schemes, such as KLD and ASSET4, so as to derive the ESG scores for listed companies. However, such existing measurement frameworks are difficult to be implemented in small and medium enterprises (SMEs) with unstructured and non-standardised business data, especially in logistics and supply chain management (LSCM) practice. In addition, it is inevitable for listed companies to work with SMEs, for example logistics service providers, but they need a systematic framework to source the responsible SMEs to maintain the ESG performance. To address the above industrial pain-points, this study proposes an ESG development prioritisation and performance measurement framework (ESG-DPPMF) by means of the Bayesian best-worst method enabling the group decision-making capability to prioritise the ESG development areas and formulate the performance measurement scheme. Through consolidating the opinions from logistics practitioners, it is found that fair labour practice, reverse logistics and human right in supply chains are the most essential areas to further enhance ESG capabilities in the logistics industry. In addition, the viability of the ESG performance measurement has been validated, and thus the sustainable and human-centric logistics practice can be developed to achieve business sustainability.

The Impact of Government Performance Evaluation on Environmental Performance in Organizations

Using GPE performance gaps (the difference between actual and standard levels of performance), this article explores the relationship between the GPE outcomes of public organizations and their environmental performance (EP). We utilize Korean GPE data related to qualitative/quantitative and financial/non-financial performance indicators that the government uses to evaluate public organizations. The GPE does not cover every important environmental activity in which public organizations may engage; the EP measure can incorporate results from all environmental activities, even those excluded from the GPE. Our investigation revealed that the EP of public organizations varied according to their GPE performance gaps. Low GPE performers favored GPE-included environmental activities over GPE-excluded environmental activities, but high GPE performers engaged in environmental activities were excluded from the GPE. A negativity bias occurs when public organizations adjust their environmental activities in response to GPE performance gaps. For environmental activities excluded from the GPE, low GPE performers avoided them more than high GPE performers engaged in them. These findings indicate the importance of a well-designed organizational performance evaluation for balanced engagement in environmental initiatives. This article is of theoretical interest to academics and has practical value for practitioners.

Green human resource management: the role of positive levers of control and environmental performance measures in managing performance

PurposeThis study focuses on the role of green human resource management (GHRM) practices through providing an empirical insight into the mediating role of the use of environmental performance measures (EPMs) in the association between Simons’ (1995) positive levers of control (beliefs and the interactive use of controls) with environmental and organisational performance.Design/methodology/approachA survey questionnaire was distributed to 577 chief financial officers within Australian manufacturing organisations who were randomly chosen from the OneSource online database.FindingsThe use of operational EPMs is found to mediate the association between the use of the positive levers of control with two of the four dimensions of environmental performance (resource usage and stakeholder interaction), and non-financial performance (through stakeholder interaction). In addition, the use of management EPMs mediates the association between the use of the positive levers of control with the regulatory compliance dimension of environmental performance. The findings highlight the importance of GHRM practices, in particular, the need for managers to focus on the positive levers of control and using operational EPMs and management EPMs to a greater extent.Originality/valueThe study contributes to the limited empirical research examining GHRM practices, highlighting the importance of EPMs and integrating such measures with internal control mechanisms, specifically beliefs and the interactive use of controls.