Proactive Environmental Practices Research Articles

Leveraging organizational culture to create competitive value from environmental practices

There has been a long-standing debate in the management literature as to the performance implications of environmental practices. Drawing upon the contingent resource-based view, we hypothesize that organizational culture moderates the relationship between environmental practices and firm performance. We use the competing value framework to explore the effects of developmental, group, rational, and hierarchical culture types on three key capabilities (i.e., stakeholder integration, higher-order learning, and continuous innovation) that stem from implementing environmental practices. We test our hypotheses using data from the fourth round of the High Performance Manufacturing survey. We find that the developmental, group, and rational culture types positively moderate the relationship between external proactive environmental practices and firm performance. By contrast, hierarchical culture negatively moderates the relationship between internal proactive environmental practices and firm performance, but positively moderates the relationship between external reactive environmental practices and firm performance. As such, our study contributes to the literature by unpacking the influence of organizational culture on the capabilities through which environmental practices affect firm performance. Our results can guide operations management executives in choosing the most suitable environmental practices that will align with their organizational culture.

기업의 환경 경영 태도에 대한 유형화 및 결정요인 분석

Purpose - The main objective of this study is to cluster companies based on environmental management attitudes using various indicators, and analyze differences in activities among the clusters to gain insights into environmental management performance.
 Design/Methodology/Approach - The study encompasses panel data from 12 countries, 22 industry sectors, and 3,402 companies from 2013 to 2022. This study uses both machine learning methodology and conventional econometric methodology. The primary methodology involves using an unsupervised learning technique, K-means clustering, to categorize environmental management attitudes. Subsequently, Kernel Density estimation and Multinomial Logistic Regression were employed to conduct comparative analyses of environmental performance indicators within each cluster and identify the determinants shaping environmental management attitudes.
 Findings - The research revealed the existence of five distinct clusters of companies with varying environmental management attitudes. Through Multinomial Logistics Regression, it identified that variables such as greenhouse gas emissions, energy consumption, total assets, return on assets, and other significantly influence environmental management attitudes.
 Research Implications - By uncovering common characteristics and determinants within major countries and industries, this study offers valuable insights in promoting domestic environmental management in the context of rapidly changing international trade and investment environments. The findings provide policy implications and suggestions for fostering proactive environmental management practices among domestic companies.

The role of socially responsible investors in environmental performance. An analysis of proactive and reactive practices

Society's concern for the environment requires a response from businesses. In recent years in Europe, several policies have been institutionally promoted to encourage socially responsible investments (SRI) at the corporate level, in terms of corporate environmental performance and disclosure, and at the level of capital markets. Investors are called to consider the environmental effects of their investments and can influence the environmental practices of companies. The research proposes that the volume, stability, and value of socially responsible investors (SRIs) could be determinant in companies' adoption of environmental measures.From a sample comprising 406 observations of European companies listed on the Dow Jones Sustainability Europe Index during a period of economic stability from 2015 to 2019, the extent to which stable and significant SRI determines companies’ adoption of environmental practices, both reactive—leading to reduction of the environmental footprint and effect—and proactive—tending to achieve clean energy and the recovery of the environment is studied.The results show that the value and stability of SRI positively affects companies’ proactive environmental practices, while the volume of SRI is negatively related to reactive environmental practices. In addition, the volatility of SRI is positively related to reactive environmental practices.The impact of SRI on proactive and reactive environmental practices shows their decisive role in companies taking proactive measures. At a time when European companies are required to strengthen their environmental commitments, the promotion of institutional practices that stimulate the presence and stability of SRI can favour the development of proactive practices, as opposed to reactive ones that could be an indirect indicator of a company's environmental risk.

Linking internal environmental capabilities to sustainable competitive advantage in manufacturing SMEs: The mediating role of eco-innovation

With the world's growing emphasis on environmental issues and the increased pressure on small and medium-sized manufacturing enterprises (SMEs) to address such issues, sustaining competitiveness has become a critical concern for SMEs. Their organisational resources and capabilities must be configurated to align with environmental requirements to sustain their competitiveness. While mounting research has highlighted the importance of environmental capabilities in facilitating proactive environmental practices, it remains unclear how these capabilities can improve manufacturing SMEs' sustainable competitive advantage (SCA). This study, therefore, has investigated how; green absorptive capacity, organisational capabilities and strategic environmental orientation have affected firms' SCA, along with exploring the mediating effect of eco-innovation in such relationships. Using a sample of 176 manufacturing SMEs in Egypt, a cross-sectional survey approach was adopted to collect data on the research variables. The data were analysed using the Smart-PLS software application, and the results demonstrated the significant roles of; green absorptive capacity and strategic environmental orientation in facilitating eco-innovation, which in turn have helped SMEs sustain their competitive advantage. On the other hand, organisational capabilities did not appear to directly or indirectly affect firms' SCA. Hence, this study may pique the interest of SME managers as it has emphasised the importance of strategic environmental orientation and green absorptive capacity in fostering eco-innovation and sustaining competitive advantage.

Environmental Responsibilities and Firms Financial Performance: A Systematic Review and Bibliometric Analysis

The aim of this study is to present a systematic review and bibliometric analysis of 512 studies on environmental responsibilities and firm financial performance literature. The study aims to track the research trend and identify the reasons behind heterogeneity in the studied association. The Scopus database was comprehensively searched to collect bibliographic material, giving an overview of contributing and influential research areas, key authors, journals, and countries. Network visualization is used to identify clusters. Content analysis of the literature revealed the essential topics of the investigation. The systematic review revealed that geographical constraints, regulatory constraints, and lack of standardizability are significant reasons for heterogeneity. We identify three major researched areas: a) economic and financial impact, b) innovation, environment management system, and standards, and c) supply chain management development. Discussion on the significant clusters concludes that studies showing positive economic benefits dominate the literature. Overall, the results of different scientific production do not indicate consensus in one direction, but mixed results help to build a new perspective and expand the research horizon. Using a systematic process, this study recognizes the value-creation potential of proactive environmental management practices.

Firm, industry, and country effects on CO2 emissions levels

AbstractWe hinge on a panel data of 4660 firms across 79 countries and over 15 years to explore how country, industry, and firm effects influence firms' CO2 emissions. Our results show that firm effects are the main factor influencing firms' CO2 emissions (32.8% of the total variance), ahead of industry (30.6%), country (29.3%), or country‐industry effects (4.0%). These results highlight the need to overhaul current public policy baselines that mainly focus on environmental regulation and technological development, for the dissemination of proactive environmental practices within the firm also appears to be—at least—as important to ground a low‐carbon future. Our findings should also permeate the rhetoric of the agents setting business collective beliefs and influencing management training, as well as that of international organizations at the forefront of the crusade for decarbonization. By contrast, if the misleading idea of marginal firm effects entrenches in our set of beliefs, it could become a self‐fulfilling prophecy in the normative system under which policymaking and organizational behavior unfold.

Institutional pressure and eco-innovation: The mediating role of green absorptive capacity and strategically environmental orientation among manufacturing SMEs in Egypt

With the growing concern about climate change, businesses have been under increasing pressure from regulatory agencies and customers to implement proactive environmental practices such as eco-innovation. While environmental pressures have been extensively discussed in the literature as drivers of eco-innovation, empirical evidence on the influence of these pressures on eco-innovation behaviour remains inconsistent. Therefore, the current study essentially aims to investigate the direct effect of institutional pressures, namely, regulation, eco-friendly product demand, and competitive pressure on eco-innovation, coupled with the indirect effect of these pressures by mediating internal drivers of eco-innovation including green absorptive capacity and strategically environmental orientation among manufacturing SMEs in Egypt. Based on a sample of 176 managers and owners of these enterprises, a cross-sectional survey is conducted to collect data related to research constructs. The results of data analysis using Smart-PLS show that all external pressures are not directly associated with eco-innovation. Of the six indirect hypothesized effects, only four indirect effects are supported. The results illustrate that green absorptive capacity mediates the relationship between institutional pressure (eco-friendly product demand and competitive pressure) and eco-innovation. The results also show that strategically environmental orientation mediates the relationship between institutional pressure (regulation and competitive pressure) and eco-innovation. This study provides an in-depth understanding of firms’ responses to institutional pressures as well as the notable implications for SMEs managers, policymakers and future researchers.

ENVIRONMENTAL HAZARDS AND RISK MANAGEMENT IN THE FINANCIAL SECTOR: A SYSTEMATIC LITERATURE REVIEW

AbstractWe conduct a systematic literature review on environmental and climate‐related risk management in the financial sector. We classify the current literature into three categories: (i) the impact of environmental concerns on financial risk; (ii) the current state of environmental risk practices in the financial sector; and (iii) measures to assess the financial exposure to environmental risks. We find that financial institutions can reduce their risk exposure by highly committing with environmental responsibility and performance. Moreover, the increase in willingness to assess climate‐related financial risk incentivizes corporate managers to adopt more proactive environmental policies and practices.

Influence of organisational and information systems and technologies resources and capabilities on the adoption of proactive environmental practices and environmental performance

There is little evidence of the role of resources and capabilities related to information systems and technologies (IS/IT) in the adoption of proactive environmental practices in firms. The purpose of this study is to explore the influence of organisational and IS/IT resources and capabilities on the adoption of proactive environmental practices as well as the ultimate effect on environmental performance. By conducting covriance-based structural equation modelling (CB-SEM) to a multi-sample of 129 small, medium and large firms operating in different industrial sectors in Bogota, Colombia, we found that organisational and IS/IT resources shape the development of capabilities for continuous improvement, stakeholder management, IS/IT support to general functional activities and IS/IT support to environmental management. Further, firm capabilities lead to the adoption of proactive environmental practices, which in turn, determine improvements in environmental performance. Findings support the relevance of IS/IT resources and capabilities in driving pro-environmental behaviour in firms.

Environmental policies and financial performance: stock market reaction to firms for their proactive environmental practices recognized by governmental programs

AbstractFirms implement proactive environmental practices (PEPs), and governments in developing countries such as China implement environmental policies such as pilot and demonstration programs to promote these PEPs. However, it remains unclear whether and when firms recognized by such governmental programs improve financial performance. Using a sample of 233 firms recognized by a national Chinese government environmental program, event study is employed to estimate stock market reaction of recognized firms. The Heckman two‐stage procedure is followed to examine the moderating effects. We find that the average stock market reaction is not significant. Cross‐sectional analyses indicate that firms with earlier recognitions, recognized for demonstration projects (compared with pilot ones), and operating in more‐polluting industries have greater market reactions, while types of PEPs (internal versus external), export intensity and government ownership (state‐owned or not) do not moderate the market reaction. This paper provides implications for firms about whether and when they should participate in a government environmental program.

How managerial ties affect hotels’ proactive environmental practices in China: The contingent role of institutional environments

Despite the increasing attention of environmental management in the hotel industry, few studies have examined how managerial ties impact hotels’ adoption of proactive environmental practices (PEPs) in China. Drawing on institutional theory, this study develops a model that investigates the differential effects of political ties and business ties on PEPs in the presence of important institutional factors. Using a primary survey and multiple secondary datasets on 190 Chinese hotels, we find that political ties inhibit a hotel’s adoption of PEPs whereas business ties facilitate PEPs. Moreover, advanced legal development and high levels of regional pollution reduce the impacts of both political ties and business ties on PEPs. We also test the relationship between PEPs and hotels’ financial performance. These findings provide novel insights into how managerial ties shape a hotel’s strategic behaviors for environmental protection under the influence of institutional environments in emerging economies.

Understanding the influence of environmental production practices on firm performance: a proactive versus reactive approach

PurposeExploring ways to sustain competitive positions as well as improve firm performance through environmental production initiatives has been a major preoccupying topic for mostly practitioners and researchers. Despite several studies on the influence of environmental initiatives on firm performance, many questions remain unanswered as to how to further extract more gains from environmental production initiatives. This study, thus, explores environmental production practices impact on firm performance from proactive and reactive perspectives.Design/methodology/approachThe study adopted a survey research design, a quantitative approach and partial least square structural equation modelling (PLS-SEM) technique in making data analysis and interpretations due to its suitability for predictive research models.FindingsThe results indicated that proactive environmental production practices positively related with process and environmental performances but negatively associated with financial performance. Although the findings contrast with majority of past findings, they gain the support of other scholars in establishing that early adoption stages of proactive environmental production initiatives strain financial capabilities and thus present a negative relationship. Reactive environmental production practices are positively and significantly related with process, environmental and financial performances.Originality/valueThe study is among the first to expose environmental production practices from a proactive and a reactive perspective and in the context of a developing country. As such, the study provides guidance to relevant authorities in further promoting sustainable production practices to preserve the environment by manufacturing safer consumer products through efficient sustainable production processes and practices.

Going green? Investigating the relationships between proactive environmental strategy, GSCM practices and performances of third-party logistics providers (TPLs)

This study investigates how green supply chain management (GSCM) practices help translate the proactive environmental strategies (PES) of third-party logistics providers (TPLs) into enhanced economic and environmental performances. The survey data from 232 French TPLs suggest that the positive influence of PES orientations on environmental performance depends on the types of GSCM practices that are mobilised. More specifically, the study reveals that environmental performance is positively influenced by both eco-efficiency and eco-branding orientations through three main GSCM practices: distribution and transport, warehousing and green building, and reverse logistics. However, neither of these orientations influence environmental performance through two other GSCM practices: cooperation with customers and eco design and packaging, and only eco-efficiency orientations positively influence environmental performance through green supply. The study further suggests that an improved environmental performance helps TPLs increase their economic performance. Overall, this study offers interesting insights into the role of GSCM practices in managing TPLs’ PES orientations to improve their performances.

Do Contextual Factors Matter in the Adoption Of Proactive Environmental Management Practices in Hotels? The Manager’s Perspective

Do Contextual Factors Matter in the Adoption Of Proactive Environmental Management Practices in Hotels? The Manager’s Perspective

Anteseden dan konsekuen strategi lingkungan proaktif pada perusahaan di Indonesia

Since the agreements of Environmental Sustainability Development (ESD) was initiated , environment issue has become an essential concern for daily business activities. This leads corporates to implement environmental strategy, especially in the proactive manner. Th e aim of this study is to investigate the effect of institutional pressures on proactive environmental practices and to examine the implication of proactive strategy to the corporate reputation. Using survey data from 76 companies in Indonesia, multiple regression analysis show ed that pressure from competitors and professional networks positively influenced proactive strategies, while regulatory pressure did not influence proactive strategies . Our evidence implied that external factors from competitors and professional networks pressures were important driving forces for corporates to apply proactive strategies. In addition, this study found a positive influence of proactive strategy on corporate reputation.

Lean-green manufacturing: the enabling role of information technology resource

PurposeThe purpose of this paper is to contribute to the existing knowledge about the relationships between information technology (IT), lean manufacturing (LM), organizational environmental issues and business performance.Design/methodology/approachA questionnaire-based survey was conducted to collect data from 122 elite manufacturers, and the hypothesized relationships were tested using partial least squares structural equation modeling.FindingsIT competence in LM acts as a lower-order organizational capability, and its business value should be recognized through the intermediate roles of LM effectiveness and environmental management capability. Findings recommend that the net benefits of LM are mainly materialized through waste and pollution reduction and simplified implementation of proactive environmental practices.Research limitations/implicationsAmong other limitations, relying on a rather small sample size and cross-sectional data of this research, and lack of generalizability of findings, tends to have certain limitations. An interesting direction for future research would be to extend this research by assessing interaction of other types of IT resources with LM and organizational environmental issues.Practical implicationsBoth LM and proactive environmental management are information-intensive. Investment in both technological and human aspects of IT resource aimed at increasing the effectiveness of LM activities and proactive environmental practices is imperative for contemporary manufacturers.Originality/valueThis study introduces the IT capability of IT competence in LM and two organizational capabilities of LM effectiveness and environmental management capability. By doing so, the study highlights the significant role of organizational environmental issues in devising firms’ IT and advanced manufacturing technology investment strategies in LM context.

Green procurement and financial performance: the moderating role of international tourists

This article analyzes the effect of green procurement --the adoption of specific purchasing policies requiring suppliers to apply environmental standards-- on the firm’s financial performance and the influence of international tourists’ characteristics, long-term orientation and spending behavior, on this relationship. Our sample includes 122 tourism firms with environmental information from Sustainalytics database for a seven-year period (years 2009 up to 2015) creating an unbalanced panel with 479 observations. We apply random effects Generalized Least Squares (GLS) Regressions to test the proposed relationship and find support for the moderating effects. Our study contributes to the tourism literature by emphasizing that the behavioral characteristics of tourists, as one of the most prominent stakeholders, play an important role in increasing financial performance when adopting proactive environmental practices.

Internalization of Environmental Practices and Institutional Complexity: Can Stakeholders Pressures Encourage Greenwashing?

This paper analyzes the determinants underlying the internalization of proactive environmental management proposed by certifiable environmental management systems (EMSs) such as those set out in ISO 14001 and the European Management and Auditing Scheme (EMAS). Using a study based on 232 usable questionnaires from EMAS-registered organizations, we explored the influence of institutional pressures from different stakeholders and the role of corporate strategy in the “substantial” versus “symbolic” integration of environmental practices. The results highlighted that although institutional pressures generally strengthen the internalization of proactive environmental practices, the influence of stakeholders can either support the integration of these practices or encourage their superficial adoption. For example, while pressure from suppliers and shareholders contribute to corporate greening, pressure from customers and industrial associations tend to encourage greenwashing (i.e., the superficial and misleading adoption of environmental practices). Product quality-oriented strategies also positively influence EMS internalization. The paper sheds light on the institutional complexity underlying the substantial versus symbolic implementation of environmental practices, and questions the dominant isomorphic view of EMS adoption. The paper also bridges the gap between complementary approaches on corporate greening, notably neo-institutional and stakeholder theories.

Political Commitment, Policy Ambiguity, and Corporate Environmental Practices

A lack of clear political commitment together with confusing rules and enforcement often characterize the institutional context of policy implementation and regulatory compliance in developing countries. By connecting such contextual features to existing models of policy implementation and regulatory compliance, we examine how regulatory factors are related to basic and proactive corporate environmental management practices in the Pearl River Delta region in China. Drawing on data derived from both a survey and in‐depth interviews, we show that a perception of clear political commitment to environmental protection across multiple government levels and units is positively associated with business efforts in basic environmental practices, regardless of the specific enforcement intensity. Nevertheless, a perception of clear political commitment is not related to proactive environmental practices. Conversely, a perception of policy ambiguity, in the form of confusing regulatory standards and enforcement, is negatively associated with corporate efforts in both basic and proactive environmental practices; yet, intensive inspections mitigate these negative associations with policy ambiguity.

A Comparison of Regulatory Awareness and Green Supply Chain Management Practices Among Chinese and Japanese Manufacturers

AbstractLeading manufacturers in developed countries generally have high environmental awareness and implement proactive environmental management practices such as green supply chain management (GSCM). However, it is uncertain if smaller manufacturers in developed countries are more proactive than all manufacturers in developing countries. To understand this situation, we carried out surveys among small and medium‐sized Japanese manufacturers, leading Chinese manufacturers and traditional Chinese manufacturers. Statistical results show that leading Chinese manufacturers have the highest awareness of both domestic and international environmental regulations/policies, and implement all GSCM practices at the highest level. Leading Chinese manufacturers and Japanese manufacturers are aware of international environmental regulations/policies, but such awareness only motivates them to implement eco‐design practices. Traditional Chinese manufacturers have limited awareness of international environmental regulations/policies, but such awareness brings all types of GSCM practice. Such results can be helpful for different manufacturers in both developed and developing countries to develop suitable environmental strategies. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment