Motivations and Barriers to Corporate Environmental Management

This paper integrates two conceptual frameworks, utility maximization and institutional theory, to analyze voluntary corporate environmental management. The utility maximization or economic approach centers on motivations to decrease cost, increase revenue and improve manager utility. Institutional theory emphasizes how external pressures from market and non-market constituents shape the firm's environmental efforts. We view the two frameworks as complementary and postulate a model that includes both types of influences. Survey data from six major industries consisting of a diverse set of facilities are used to estimate the effects of economic and institutional factors on a facility's use of environmental practices and pollution-prevention activities. Our results support the hypothesized model, and show that cost barriers, management attitudes toward environmental stewardship, company ownership and external institutional forces, including competitiveness, investor and regulatory pressures, all affect a facility's environmental practices and pollution prevention activities. Findings suggest that a multifaceted policy strategy is needed to advance corporate environmental management across diverse firms. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment

[1]  M. Nakano,et al.  Relationship between environmental performance and financial performance: an empirical analysis of japanese corporations , 2007 .

[2]  Basil Al-Najjar,et al.  Environmental Policies and Firm Value , 2012 .

[3]  Kathleen Segerson,et al.  Voluntary Environmental Agreements: Good or Bad News for Environmental Protection? , 1998 .

[4]  D. Morrow,et al.  Adopting Corporate Environmental Management Systems:: Motivations and Results of ISO 14001 and EMAS Certification , 2002 .

[5]  Toshi H. Arimura,et al.  Is ISO 14001 a Gateway to More Advanced Voluntary Action? The Case of Green Supply Chain Management , 2010 .

[6]  A. Gouldson,et al.  Corporate environmentalism: tracing the links between policies and performance using corporate reports and public registers , 2007 .

[7]  M. Simpson,et al.  Environmental responsibility in SMEs: does it deliver competitive advantage? , 2004 .

[8]  Lorne Cummings,et al.  Managerial attitudes toward environmental management within Australia, the People's Republic of China and Indonesia , 2008 .

[9]  A. Prakash,et al.  Covenants with weak swords: ISO 14001 and facilities' environmental performance , 2005 .

[10]  Madhu Khanna,et al.  Incentives for Environmental Self-Regulation and Implications for Environmental Performance , 2004 .

[11]  Madhu Khanna,et al.  Adoption of Pollution Prevention Techniques: The Role of Management Systems and Regulatory Pressures , 2009 .

[12]  Julien Labonne,et al.  Why do manufacturing facilities introduce environmental management systems? Improving and/or signaling performance ☆ , 2009 .

[13]  Jorge Rivera,et al.  Is Greener Whiter? Voluntary Environmental Performance of Western Ski Areas , 2004 .

[14]  Irene Henriques,et al.  Pathways of stakeholder influence in the Canadian forestry industry , 2005 .

[15]  Madhu Khanna,et al.  The effectiveness of voluntary environmental initiatives , 2009 .

[16]  J. González‐Benito,et al.  A review of determinant factors of environmental proactivity , 2006 .

[17]  N. Stoeckl.  The private costs and benefits of environmental self-regulation: which firms have most to gain? , 2004 .

[18]  C. Tovey,et al.  Time horizons of environmental versus non‐environmental costs: evidence from US tort lawsuits , 2007 .

[19]  Michael J. Lenox,et al.  Industry Self-Regulation Without Sanctions: The Chemical Industry's Responsible Care Program , 2000 .

[20]  Abdoul G. Sam,et al.  1 Voluntary Pollution Reductions and the Enforcement of Environmental Law : An Empirical Study of the 33 / 50 Program , 2004 .

[21]  D. Garvie.  Self-regulation of pollution: The role of market structure and consumer information , 1997 .

[22]  Graeme Auld,et al.  The New Corporate Social Responsibility , 2008 .

[23]  M. Glachant.  The Cost Efficiency of Voluntary Agreements for Regulating Industrial Pollution: A Coasean Approach , 1999 .

[24]  Daniel C. Esty,et al.  Green to gold : how smart companies use environmental strategy to innovate, create value, and build competitive advantage , 2006 .

[25]  Thomas P. Lyon,et al.  Corporate Environmentalism and Public Policy , 2004 .

[26]  M. Toffel,et al.  Stakeholders and Environmental Management Practices: An Institutional Framework , 2004 .

[27]  Madhu Khanna,et al.  Non-mandatory Approaches to Environmental Protection , 2002 .

[28]  Jeffrey M. Wooldridge,et al.  Solutions Manual and Supplementary Materials for Econometric Analysis of Cross Section and Panel Data , 2003 .

[29]  Kathleen Segerson,et al.  Assessing Voluntary Programs to Improve Environmental Quality , 2002 .

[30]  Ilan Vertinsky,et al.  Why Japanese Firms Choose to Certify: A Study of Managerial Responses to Environmental Issues , 2001 .

[31]  David E. Ervin,et al.  Factors Affecting the Use of Soil Conservation Practices: Hypotheses, Evidence, and Policy Implications , 1982 .

[32]  K. Nishitani.  An empirical study of the initial adoption of ISO 14001 in Japanese manufacturing firms , 2009 .

[33]  Teresa Hall.  Business decisions for voluntary environmental management : Motivations, actions, and outcomes , 2006 .

[34]  Thomas P. Lyon,et al.  Self-Regulation and Social Welfare: The Political Economy of Corporate Environmentalism , 1998 .

[35]  W. E. Watkins,et al.  Investment in Energy Efficiency: Do the Characteristics of Firms Matter? , 1998, Review of Economics and Statistics.

[36]  Ivan Montiel,et al.  Greening the Supply Chain: When is Customer Pressure Effective? , 2009 .

[37]  M. Toffel,et al.  Organizational Responses to Environmental Demands: Opening the Black Box , 2008 .

[38]  K. Kearins,et al.  The political bottom line: the emerging dimension to corporate responsibility for sustainable development , 2005 .

[39]  R. Florida,et al.  Gaining from Green Management: Environmental Management Systems inside and outside the Factory , 2001 .

[40]  D. Dillman.  Mail and internet surveys: The tailored design method, 2nd ed. , 2007 .

[41]  Shameek Konar,et al.  Does the Market Value Environmental Performance? , 2001, Review of Economics and Statistics.

[42]  Mark Cordano,et al.  Exploring Individual and Institutional Drivers of Proactive Environmentalism in the US Wine Industry , 2005 .

[43]  Abeer Hassan,et al.  Corporate environmental information disclosure: factors Influencing companies success in attaining environmental awards , 2012 .

[44]  John d. McClelland,et al.  The Costs of Water Pollution Regulation in the Pulp and Paper Industry , 1999 .

[45]  George Deltas,et al.  Adoption of Pollution Prevention: The Role of Information Spillover, Mandatory Regulation, and Voluntary Program Participation , 2011 .

[46]  George Halkos,et al.  Determinants of environmental management systems standards implementation: evidence from Greek industry , 2002 .

[47]  Scott M. Smith,et al.  Fundamentals of Marketing Research , 2004 .

[48]  Timothy N. Cason,et al.  An Experiment in Voluntary Environmental Regulation: Participation in EPA's 33/50 Program , 1995 .

[49]  Anna Alberini,et al.  The appeal of voluntary environmental programs: which firms participate and why? , 2000 .

[50]  A. Prakash,et al.  Racing to the Bottom? Trade, Environmental Governance, and ISO 14001 , 2006 .

[51]  B. Kriström,et al.  Abatement investments and green goodwill , 2003 .

[52]  Aseem Prakash,et al.  Investing Up: FDI and the Cross-Country Diffusion of ISO 14001 Management Systems , 2007 .

[53]  M. Khanna,et al.  Striving to be green: the adoption of total quality environmental management , 2008 .

[54]  Madhu Khanna,et al.  Fostering Regulatory Compliance: The Role of Environmental Self-Auditing and Audit Policies , 2011 .

[55]  C. Carraro,et al.  Voluntary Approaches, Market Structure and Competition , 1999 .

[56]  Wu Junjie,et al.  Firms' Motivations for Environmental Overcompliance , 2009 .

[57]  J. Hamilton.  Pollution as News: Media and Stock Market Reactions to the Toxics Release Inventory Data , 1995 .

[58]  Perry Sadorsky,et al.  The Determinants of an Environmentally Responsive Firm: An Empirical Approach , 1996 .

[59]  Teresa Smallbone,et al.  How can domestic households become part of the solution to England's recycling problems? , 2005 .

[60]  David P. Baron,et al.  Private Politics, Corporate Social Responsibility, and Integrated Strategy , 2001 .

[61]  Junjie Wu,et al.  Environmental compliance: The good, the bad, and the super green. , 2009, Journal of environmental management.

[62]  Mark Cordano,et al.  Pollution Reduction Preferences of U.S. Environmental Managers: Applying Ajzen'S Theory of Planned Behavior , 2000 .

[63]  Shubhashis Gangopadhyay,et al.  Toward a theoretical model of voluntary overcompliance , 1995 .

[64]  R. Handfield,et al.  Integrating Environmental Management and Supply Chain Strategies , 2005 .

[65]  Audun Ruud,et al.  On the path to sustainability: integrating social dimensions into the research and practice of environmental management , 2003 .

[66]  David E. Ervin,et al.  Motivations for Voluntary Environmental Management , 2007 .

[67]  C. Michaud,et al.  Green consumer behaviour: an experimental analysis of willingness to pay for remanufactured products , 2010 .

[68]  M. Khanna,et al.  Corporate Environmental Management: Regulatory and Market-Based Incentives , 2002, Land Economics.

[69]  E. Masurel.  Why SMEs invest in Environmental Measures: Sustainability Evidence from Small and Medium-sized Printing Firms , 2007 .

[70]  Aseem Prakash,et al.  Voluntary Environmental Programs: A Comparative Perspective. , 2012 .

[71]  Charles P. Koerber,et al.  Is Greener Whiter Yet? The Sustainable Slopes Program after Five Years , 2006 .

[72]  Madhu Khanna,et al.  EPA's Voluntary 33/50 Program: Impact on Toxic Releases and Economic Performance of Firms , 1999 .

[73]  Floyd J. Fowler,et al.  Improving Survey Questions: Design and Evaluation , 1995 .

[74]  Shameek Konar,et al.  Information As Regulation: The Effect of Community Right to Know Laws on Toxic Emissions , 1997 .

[75]  Cody Jones,et al.  Exploring new ways of assessing the effect of regulation on environmental management. , 2010 .

[76]  R. Gulati,et al.  The dynamics of learning alliances: competition, cooperation, and relative scope , 1998 .

[77]  Ian R. Kerr,et al.  Leadership strategies for sustainable SME operation , 2006 .

[78]  Angus Morrison-Saunders,et al.  The impact of voluntary environmental protection instruments on company environmental performance , 2004 .

[79]  David Wheeler,et al.  What Improves Environmental Performance? Evidence from Mexican Industry , 1997 .

[80]  Daniel A. Levinthal,et al.  Fortune favors the prepared firm , 1994 .

[81]  Jorge Rivera,et al.  Is Greener Whiter? The Sustainable Slopes Program and the Voluntary Environmental Performance of Western Ski Areas , 2006 .

[82]  Lutz Preuss.  Rhetoric and reality of corporate greening: a view from the supply chain management function , 2005 .