Does It Pay to Be Green? A Systematic Overview

Abstract

The conventional wisdom concerning environmental protection is that it comes at an additional cost imposed on firms, which may erode their global competitiveness. However, during the last decade, this paradigm has been challenged by a number of analysts (e.g., Porter & van der Linde, 1995), who have argued basically that improving a company's environmental performance can lead to better economic or financial performance, and not necessarily to an increase in cost. The aim of this paper is to review empirical evidence of improvement in both environmental and economic or financial performance. We systematically analyze the mechanism involved in each of the following channels of potential revenue increase or cost reduction owing to better environmental practices: (a) better access to certain markets; (b) differentiating products; (c) selling pollution-control technology; (d) risk management and relations with external stakeholders; (e) cost of material, energy, and services; (f) cost of capital; and (g) cost of labor. In each case, we try to identify the circumstances most likely to lead to a "win-win" situation, i.e., better environmental and financial performance. We also provide a diagnostic of the type of firms most likely to reap such benefits.

Green human resource management: a comparative qualitative case study of a United States multinational corporation

“…The size of the firm can be positively associated with the degree of environmental activity (Hofer et al, 2012) as can the degree of stakeholder interest (Jabbour et al, 2015;Tatoglu et al, 2014). Literature confirms the importance of the positioning of the 'greening' function as a key factor in improving the environmental performance of organizations (Ambec & Lanoie, 2008). Similar to Jabbour et al (2010) empirical study on manufacturing companies located in Brazil, this case study also identifies variations in the degree to which HRM activities are aligned with environmental management, as there is inconsistency in the alignment and positioning of the environmental and HR functions.…”

“…Research in the field of Green HRM is inter-disciplinary, drawing from organizational themes within strategic management (Aragón-Correa & Rubio-López, 2007;Boiral, 2009, Jabbour et al, 2010Schroeder, 2012), organizational performance and performance management (Clemens, 2006;Jabbour et al, 2015;Länsiluoto & Jarvenpää, 2010;Marcus & Fremeth, 2009;Ambec & Lanoie, 2008), organizational culture, employee engagement, staff development and training (Govindarajulu & Daily, 2004;Jabbour 2013b;Rothenberg, 2003;Vaccaro & Echeverri, 2010). The following literature review focuses on the two prominent areas in the Green HRM debate as identified earlier in this study: the positioning and alignment of the environment and HR function including the integration with organizational performance and Green employee engagement.…”

“…This requires the alignment between HR and other functional areas of the organization. Recent studies have suggested that, due to the emerging business case for green environmental management (Ambec & Lanoie, 2008), the positioning of the 'greening' function plays a key role in improving the environmental performance of organizations. The attention organizations wish to give to green issues is reflected in the extent of the integration of a company's corporate Green HRM strategy into its performance management system (Marcus & Fremeth, 2009).…”

Born to be green: new insights into the economics and management of green entrepreneurship

“…The conventional wisdom of green ventures, as derived from the study of large companies, tends to emphasise the benefits of going green in terms of cost-efficiency, innovation offsets, attendant revenue growth through product differen tia tion, inc rease d transp aren cy, re duce d organisational inertia, better risk management and improved relationships with external stakeholders, and the like (Ambec and Lanoie 2008;Porter and van der Linde 1995). Nevertheless, such logics often fail to apply or apply with significant qualification to their small entrepreneurial counterparts.…”

Does Eco-labeling of Services Matter? Evidence from Higher Education

“…5 There are many papers in the finance literature that examine the effect of environmental performance (often referred to as Corporate Social Responsibility) on firm financials. The results there are mixed; for reviews of these studies see Graff Zivin and Small (2005), McWilliams and Siegel (2000), and Stefan and Paul (2008) .…”