Proactive Environmental Strategy Research Articles

Enhancing corporate sustainable development: Proactive environmental strategy, stakeholder pressure and the moderating effect of firm size

AbstractThe article evaluates the influence of pressure of 10 distinct types of stakeholders on the adoption of environmental strategies, with the special focus on the proactive environmental strategy (PES). The moderation effect of the company size on this relationship is investigated in depth. The existence of the relationship between stakeholder pressure and environmental strategies has been explored by numerous studies. The study adds significantly to this ongoing discussion as the moderation effect of the company size was explored scarcely so far in the literature. The results from the multinomial logistic regression models confirmed almost unanimously the effect of stakeholder pressure and the presence of the moderation. Positive, but nonlinear, direct and moderated effect of pressures of regulators, competitors, clients, NGOs, media, shareholders and employees on PES was discovered. In case of suppliers, consumers and top management, the pressure–PES relation was more complex. Also, large companies seem to be more resilient to pressures than the smaller ones when adopting PES.

Realizing the Environmental Benefits of Proactive Environmental Strategy: The Roles of Green Supply Chain Integration and Relational Capability

Although the impact of proactive environmental strategies on corporate performance has been extensively discussed in academia, the path of the impact of proactive environmental strategies on environmental performance remains unclear. In this study, we introduce a strategy–structure–performance (SSP) framework to explore the mechanism through which proactive environmental strategies improve environmental performance by utilizing green supply chain integration. Based on the questionnaire survey data of 252 Chinese manufacturing firms, a structural equation model was established to verify our hypothesis. The results show that firms that implement a proactive environmental strategy tend to promote the green integration of suppliers through internal green integration and thus improve their environmental performance. By distinguishing two kinds of activities of green supplier integration (greening the supplier and environmental collaboration with the supplier), we found that environmental collaboration with the supplier can directly promote the environmental performance of manufacturing enterprises, but supplier greening indirectly enhances the environmental performance of enterprises through supplier environmental collaboration. The boundary conditions of the influence of internal green integration on green supplier integration are discussed, and we found that the relationship cability plays a moderating role in the influence of internal green integration on supplier green integration.

The role of women on boards in corporate environmental strategy and financial performance: A global outlook

AbstractThis study examines the impact of board gender diversity on corporate environmental strategy and financial performance. Based on 12 corporate environmental policies in 3,389 firms worldwide, we identified four types of corporate environmental strategies by using the latent class regression model: an inactive strategy, a reactive strategy, a pollution prevention strategy, and a sustainable development strategy. The empirical evidence shows that women on boards (WoB) contribute to the promotion of proactive environmental strategies, including the pollution prevention strategy, which is found to bring about sustained competitive advantage in both short‐term and long‐term financial performance, and the sustainable development strategy, which is positively associated with long‐term financial performance. Following the natural resource‐based view of the firm, these findings indicate that WoB can be seen as a key resource in the organizational process, which provides a shared vision of the future and strong moral leadership to the top management team.

Proactive Environmental Strategy and Environmental Performance: A Resource-based Perspective

Proactive Environmental Strategy and Environmental Performance: A Resource-based Perspective

How Proactive Environmental Strategy Facilitates Environmental Reputation: Roles of Green Human Resource Management and Discretionary Slack

Based on natural resource-based theory, we examined how firms’ environmental strategies and environmental reputation depended on their green human resource management and discretionary slack. From the perspective of human resource management, we hypothesized that proactive environmental strategy predicted firms’ environmental reputation through the mediation of green human resource management. We further proposed that slack resources, which can be used discretely by managers for environmental management, enhanced the hypothesized relationships. Using data from firms in environmentally sensitive industries in eastern China, we provided empirical support for our hypotheses. The findings highlight the vital roles played by managers and green human resource management in implementing firms’ environmental strategies and promoting firms’ environmental reputation.

A Content-analytic Understanding of Factors Contributing to the Success of Proactive Environmental Strategy

A Content-analytic Understanding of Factors Contributing to the Success of Proactive Environmental Strategy

When companies improve the sustainability of the natural environment: A study of large U.S. companies

AbstractIn light of the call for companies to abandon current approaches to environmental management, this study adds to the environmental strategy literature and uses the evidence of competitive dynamics among companies to identify a mechanism by which companies invest in proactive environmental strategies and thereby improve the sustainability of the natural environment. An examination utilizing fixed effects regressions on a sample of large U.S.‐based companies reveal that even after controlling the number, environmental and financial performance of leading (environmental) companies, laggard (environmental) companies are more likely to invest in proactive environmental strategies when their leading peers display higher sustainability orientations. Neither the expectation of government regulation nor social movement pressure was found to be influential in this relationship. Therefore, the future dominance of companies' investments in the sustainability of the natural environment will be driven by companies themselves as long as competitive advantages are expected.

Can proactive environmental strategy improve Multilatinas' level of internationalization? The moderating role of board independence

AbstractThis paper explores the relationships between proactive environmental strategy (PES) and internationalization in emerging markets multinationals from Latin America (Multilatinas). Drawing on the resource‐based view and institutional theory and using a sample of 86 listed firms during the period 2013–2017, we find that Multilatinas with higher tiers of PES are associated with higher degrees of geographic international diversification. Because adopting PES is directly conditioned by institutional pressures to comply with stakeholders' regulations and expectations, Multilatinas that implement advanced PES will be able to achieve a higher level of international presence in foreign markets. Our results also reveal that board independence positively moderates the relationship between PES and geographic international diversification. Specifically, board independence provides Multilatinas with the opportunity to integrate valuable knowledge and expertise and thus to take advantage of implementing advanced PES to achieve even greater levels of internationalization. This study expands understanding of how environmental strategies influence internationalization of firms in the Latin American business context.

Exploring the Proactivity Levels and Drivers of Environmental Strategies Adopted by Vietnamese Seafood Export Processing Firms: A Qualitative Approach

Export processing firms from emerging markets often need to adjust their export strategies towards environmentally friendly directions to address strict regulatory requirements and increasingly environmental concerns among the public and consumers in advanced countries. This study aims to explore and evaluate different proactivity levels and drivers of environmental strategies (ESs) adopted by Vietnamese seafood export processing firms. Data was obtained from two sources: Public archival data of 32 listed firms, and semi-structured interviews with 44 managers from seafood export processing firms. Content analysis revealed that reactive ESs were adopted the most by Vietnamese seafood export processing firms, followed by opportunistic ESs, focused ESs and proactive ES, respectively. The findings also demonstrated that both internal factors and external factors in home and host countries motivate the firms to pursue different ESs. This study sheds light on unexplored characteristics and drivers of ESs in Vietnam and it assists key stakeholders including export processing firms and policymakers in the adoption, development and promotion of ESs.

Unraveling the complex relationship between environmental and financial performance ─── A multilevel longitudinal analysis

Many business managers start to adopt environmental-friendly activities due to pressures and concerns regarding the potential adverse environmental impacts from their regular activities. However, there is no consensus regarding whether better environmental performance can lead to superior financial performance. Academic research also shows mixed or even contradictory results, possibly due to various limitations and problems. This study builds a multilevel framework to study the complicated relationship between environmental performance and financial return and synthesize those non-consensus results in many previous studies. An overall positive relationship is found between environmental and financial performance with variations across companies and industries due to the company- and industry-level heterogeneities. A negative relationship is also identified for some firms in some industry sectors. Moreover, the bi-directional causal relationship between environmental and financial performance also implies that it is necessary for companies to have sufficient financial resources in order to implement proactive environmental strategies and initiatives. The findings in this study make contributions to the literature, provide guidelines for managers and investors, and give implications for policymakers.

What determines environmental proactiveness in the Indian cement sector? An empirical study

The lack of clarity in the environmental strategies has created uncertainty towards industrial efforts to protect the environment. However, some firms are more apprehensive regarding environmental protection in comparison to their counterparts. What determines the environmental proactiveness of these firms which go beyond extant laws to adopt proactive environmental strategies (PES)? This article, through an empirical study of the Indian cement sector, identifies the determinants of adoption of PES. Quantitative analysis of survey data from 310 respondents identifies four determinants; organisational capability, market benefits, stakeholder pressure, and environmental risk management. Four hypotheses are proposed to test the Confirmatory Factor Analysis (CFA) outcome. Organisational capability and market benefits are observed to be the key determinants. The study determines the strength of the identified determinants on PES adoption using structural equation modelling (SEM) and path analysis. Path analysis ranks the determinants in the order; organisational capability, market benefits, environmental risk management and stakeholder pressure. The evidence based findings from the research are expected to be useful for the environmental management practitioners as well as academicians. On the global front, the developing countries having identical socio-economic and political structure may gain from the findings of the study.

Effects of proactive environmental strategy on environmental performance: Mediation and moderation analyses

Contradictory findings on the relationship between proactive environmental strategy and performance are reported in the existing literature. The way that proactive environmental strategy is defined, the omission of crucial mediating variables and the misfit between strategy and business structures may help explain these conflicting findings. Drawing upon the logic of strategy-action-performance, this study tests the effects of two implementation variables of proactive environmental strategy—green human resource management (GHRM) and environmental legitimacy (EL)—on environmental performance as well as the mediating roles played by the implementation of green operational practices (GOP). Further, based on contingency theory, this study proposes that the impacts of GHRM and EL on the implementation of GOP might be moderated by operational barriers (OB) and managerial barriers (MB). The proposed hypotheses are empirically tested using a dataset of 260 sample plants in 11 countries/regions (Finland, Sweden, Germany, Taiwan, Israel, Mainland China, Spain, Brazil, Italy, South Korea and Japan). The results show that the effect of GHRM on environmental performance is fully mediated by the implementation of GOP (the path coefficient b for the direct link between GHRM and environmental performance changes from 0.436, p < 0.001 to 0.180, p > 0.1). EL has no statistically significant direct or indirect effects on environmental performance (direct effect: b = −0.08, p > 0.1, indirect effect: b = 0.083, p > 0.1) but has a marginally significant effect on the implementation of GOP (b = 0.218, p < 0.1). The results also indicate that OB reduce the effectiveness of EL in facilitating the implementation of GOP (b = −0.103, p < 0.1), and MB reduce the effectiveness of GHRM in supporting the implementation of GOP (b = −0.11, p < 0.1).

Proactive environmental strategy, innovation capability, and stakeholder integration capability: A mediation analysis

AbstractThis study investigates the underlying mechanisms through which proactive environmental strategy develops organizational capabilities. The results of a survey of publicly listed companies in China reveal that proactive environmental strategy has a more positive influence on stakeholder integration capability than on innovation capability. Moreover, organizational learning plays a greater role in mediating the effect of proactive environmental strategy on innovation capability than on stakeholder integration capability, whereas cross‐functional coordination plays a greater role in mediating its effect on stakeholder integration capability than on innovation capability. These findings provide important implications on organizational capability building via proactive environmental strategy.

The influence of environmental dynamic capabilities on organizational and environmental performance of hotels: Evidence from Mexico

This article proposes a proactive environmental strategy (PES) and eco-innovation as environmental dynamic capabilities and analyzes the relationship between these capabilities as well as their influence on performance in 126 hotels in Oaxaca, Mexico. Based on survey data, path analysis was used for hypothesis testing. The results show a positive and significant link between a PES and both eco-innovation and performance (organizational and environmental); eco-innovation shows a positive and significant link to environmental performance as well as a negative and significant link to organizational performance. Our research provides a better understanding of the use of environmental dynamic capabilities in value creation but also notes limitations and challenges in their implementation in the hotel industry.

A comparison of proactive and reactive environmental strategies in green product innovation

Companies are exposed to different kinds of pressures to respond to environmental sustainability issues. It is critical to understand how firms integrate environmental issues into their corporate agendas and how these integration strategies affect corporate performance. This paper investigates factors that motivate firms to adopt environmental marketing strategies and their relative impact on green product innovation performance. A comprehensive conceptual framework is developed and tested that portrays the antecedents and consequences of environmental marketing strategy (EMS). The results show that developing environmental strategies that exceed regulations (proactive strategies) leads to better new product performance than those that only adhere to regulations (reactive strategies). In addition, we find that commitment from top management becomes critical only for proactive strategies, not for reactive strategies. Finally, with regard to the consequences, we show that environmental marketing strategies lead to new product advantage and, ultimately, improved sustainable new product performance.

Strategically-framed environmental disclosure index: a measurement approach of Malaysian public listed companies' corporate environmental reporting practices

This study aims to measure the corporate environmental reporting (CER) practices of Malaysian environmentally sensitive public listed companies based on measurement approach named strategically-framed environmental disclosure index. The content analysis technique based on a measurement index related to firm's environmental strategies has been employed. The CER practices of 209 Malaysian environmentally sensitive public listed companies are examined for the years 2010 and 2014. Results suggest that there are three types of firm behaviour in CER in response to institutional pressures: 1) 'negative deviance' (i.e., non-compliance environmental strategies leading to no quality environmental disclosures); 2) 'conformance' (i.e., compliance environmental strategies leading to low quality environmental disclosures); 3) 'positive deviance' (beyond-compliance or proactive environmental strategies leading to high quality environmental disclosures). This index shed light whether the environmental, social and governance (ESG) practice in Malaysian and global context as a deviance or normative behaviour. Moreover, this study identified whether mandatory reporting requirement force firm to actually improve environmental performance concurrently with pro-environmental policies or just as their greenwashing mechanism.

Strategically-framed environmental disclosure index: a measurement approach of Malaysian public listed companies' corporate environmental reporting practices

This study aims to measure the corporate environmental reporting (CER) practices of Malaysian environmentally sensitive public listed companies based on measurement approach named strategically-framed environmental disclosure index. The content analysis technique based on a measurement index related to firm's environmental strategies has been employed. The CER practices of 209 Malaysian environmentally sensitive public listed companies are examined for the years 2010 and 2014. Results suggest that there are three types of firm behaviour in CER in response to institutional pressures: 1) 'negative deviance' (i.e., non-compliance environmental strategies leading to no quality environmental disclosures); 2) 'conformance' (i.e., compliance environmental strategies leading to low quality environmental disclosures); 3) 'positive deviance' (beyond-compliance or proactive environmental strategies leading to high quality environmental disclosures). This index shed light whether the environmental, social and governance (ESG) practice in Malaysian and global context as a deviance or normative behaviour. Moreover, this study identified whether mandatory reporting requirement force firm to actually improve environmental performance concurrently with pro-environmental policies or just as their greenwashing mechanism.

Exploring the antecedents and consequences of environmental performance in micro-enterprises: The case of the Italian craft beer industry

This research aims at investigating the antecedents and consequences of environmental performance in the craft beer industry. Precisely, we assessed how some factors, i.e. the external pressures, internal drivers, environmental awareness, as well as the adoption of proactive environmental strategies, influences the environmental performance; we also assessed to what extent the latter leads to better cost and differentiation advantages and operating performance. Our exploratory research relies upon original data acquired surveying 203 firms operating in the Italian craft beer industry, a new and fast-growing sector. We test our hypotheses using structural equation modelling. Results highlight the importance of carefully considering the proactive environmental strategy and environmental awareness in order to increase the environmental performance that, in turn, has a significant impact on the operating performance through cost advantages.

A Proactive Environmental Strategy: Analyzing the Effect of SCM Experience, Age, and Female Representation in TMTs

As the importance of maintaining a proactive environmental agenda gains significance, an understanding of the impact of the characteristics of the top management team (TMT) on environmental strategy is of critical importance. Given the impact of environmental initiatives on the supply chain, experience in this area can benefit decision‐making in TMTs for a proactive environmental or green strategy. Drawing on upper echelon theory (UET), the theory of generativity, and prior work leveraging the knowledge‐based view (KBV), we analyze the impact of supply chain management (SCM) experience in TMTs for a proactive environmental strategy. To further contextualize the characteristics of the TMT in the SCM context, we include age and female representation in our analysis as important factors in setting the green agenda of a firm. The theory is tested with an original panel dataset of 2,703 firm‐year records. Measure of a proactive environmental strategy is drawn from Kinder, Lydenberg, and Domini (KLD) database, while TMT characteristics are derived from executive profiles recorded in Bloomberg. Our findings support the positive impact of executives with SCM experience in TMTs, aging TMTs, and TMTs with higher female representation on a proactive environmental agenda. Furthermore, the results reveal that the desire for a proactive environmental agenda in aging and in TMTs with increasing female representation can benefit from the additional presence of SCM experience. In sum, this study highlights the significance of female representation and age, and makes a strong case for the importance of SCM experience in TMTs for a proactive environmental strategy.

생태적 환경 불확실성과 주요 관계자들의 압력에 따른 환경경영 통제시스템의 이용 행태와 환경 혁신

The concrete relationships among external environmental factors, environmental strategy, the usage patterns of environmental management control systems (EMCSs), the types of corporate environmental innovations, and innovation openness have not been empirically examined in prior research. This study empirically investigated these relationships to identify and suggest the ways for increasing the degrees of environmental innovations through the use of EMCSs under adopted environmental strategy. The empirical data in this study were collected through the post-survey. 96 valid survey data were finally collected. The results of this study showed that ecological uncertainty and stake-holders’ pressures have a positive impact on the adoptions of ecological efficiency strategy and proactive environmental strategy. It was also observed that a proactive environmental strategy only positively influences the diagnostic and interactive usage of EMCSs. In the results of the effects of usage patterns of EMCSs on the types of innovation, it was showed that the EMCSs’ diagnostic use positively influences the levels of environmental-friendly product innovation, and interactive usage has a positive effect on the degrees of process innovation. According to the results, it was indicated that innovation openness has a moderating impact on the relationship between EMCSs’ diagnostic usage and environmental-friendly product innovation. Thus, it was demonstrated that under high levels of innovation openness, a high degree of environmental-friendly innovation can be achieved through the use of EMCSs. Based on these results, it is concluded that different usage types of EMCSs activate different forms of an environmental-friendly innovation in manufacturing firms. It is also broadly proposed that there exist influence relationships among the kinds of environmental strategy of a firm, the usage forms of EMCSs, and the different types of environmental-friendly innovations.