PurposeThe study aims to evaluate the informational value to investors of the Toxics Release Inventory (TRI) as an external outcome measure of corporate environmental performance. Emphasis is placed on the market response differences between three highly polluting industries.Design/methodology/approachThe study uses pooled cross‐sectional, time‐series data and an event study methodology to examine the effects of TRI emissions on abnormal market returns.FindingsThere is empirical evidence that market reactions to TRI emissions information vary by industry. Investors reward decreases in emissions in the electric utility industry, but do not penalize increases. In the chemical industry, increases in emissions are penalized, but decreases are not rewarded. Models do not capture any reaction to emissions changes in the pulp and paper industry. These results may be explained by the significant difference between industries in the US percentage of total firm sales.Research limitations/implicationsThis research analyzes only data from US firms in three industries and evaluates a single measure of environmental performance, TRI. The value of TRI information is measured for one stakeholder group. Future research should attempt to address these limitations.Practical implicationsThe results suggest that research on the effects of environmental performance on market‐based measures should estimate models by industry, whenever possible. From a public policy perspective, the results suggest that regulators may want to consider alternative methods of reducing chemical emissions beyond TRI disclosure in the chemicals and pulp and paper industries.Originality/valueThe study distinguishes between the value of TRI as a “message service” and the content of the “message”. TRI may provide information of value to investors, but performance changes may not be sufficient to merit a price response. The study also specifically addresses industry differences and clearly shows how average coefficients can be misleading relating to this one environmental performance indicator. The use of pooled industry coefficients may lead to inefficient resource allocation decisions within industries and ineffective policies at the regulatory level.
Driven by climate change and overuse, water stress is a worsening sustainability concern that threatens businesses and communities across the globe. Leading global organizations such as the United Nations have expressed an urgent need for sustainable water management strategies across nations and economies. Yet, the field of supply chain management does not have a substantial research stream related to water. A key challenge is the lack of a persuasive organizing framework within this setting. This study presents a systematic literature review of water stress from a supply chain perspective. Literature spanning over two decades across an array of journals is synthesized into an overarching framework that organizes topics related to water. Challenges firms face due to operational and contextual water risks are presented. Based on the proposed framework, research gaps for further exploration of the relationship between supply chains and water stress are suggested.
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