Eco-Efficiency: Achieving Productivity Improvements through Environmental Cost Management

Abstract

The purpose of this study is to assess how identifying, tracking, and monitoring environmental costs can assist an agenda adopted to improve environmental performance. We do so by providing a theoretical discussion and contextual model of eco-efficiency that includes cost management as part of its activities. This approach draws on the quality management literature and the Porter hypothesis, which assumes that pollution is a form of technical inefficiency and that properly designed regulations stimulate firms to develop pollution control innovations. Our paper provides several specific contributions. First, for all stakeholders we provide additional insight into the ongoing debate over the value relevance of environmental cost management by developing a general model of eco-efficient behavior. Second, our models demonstrate that there is room for opportunities to reduce pollution while simultaneously improving the value of the firm. To do so, however, requires a coordinated effort on the part of both the business community and legislators to understand the needs of each and to offer alternatives that will provide benefits for each party.

Institutional Pressures, Green Supply Chain Management Practices on Environmental and Economic Performance: A Two Theory View

“…The positive impact of GP on economic performance was in line with the results of [50,61,79,102]. The literature suggests that a supplier transfers the cost reduction benefits to its strategic customer through efforts to make the production process green with less pollution and use of resources, hence a buyer reaps the benefits in its attempt of GP [43,61,92]. IR had a non-significant positive effect on economic performance which was per the studies of [50,61], while results of CC supported the findings of Zhu et al [14], who found a negative effect of CC on economic performance.…”

“…PLS is a composite based approach and fits better for complex models even with small sample sizes [90,91]. PLS-SEM is considered an appropriate method of analysis when latent variable scores are needed to be used in subsequent analysis, and this method is also recommended if the model contains a higher order construct with only two first-order constructs [47,92]. SmartPLS 3 [93] software was used to examine the validity and reliability of the constructs and their linked manifest variables and test the hypotheses.…”

“…Same software is used to calculate the descriptive statistics presented in Table 2. Although PLS-SEM can handle non-normal data, we tested the normality of the data to substantiate the results and allow them to be replicable [92]. Values of skewness and kurtosis were within the recommended range of from −2 to 2, (see Table 2) [94].…”

“…At the initial level of the measurement model, all ten first-order reflective constructs were evaluated together. The reliability and validity of the reflective constructs was assessed through the Cronbach alpha, composite reliability (CR), and average variance extracted (AVE) [90,92,95]. To confirm the reliability of reflective measurement model, the indicator and construct reliability were measured.…”

Does sustainable supplier co-operation affect performance? Examining implications for the triple bottom line

“…Products produced under strict ecological and social standards also suffer from fewer process interruptions, which enhances throughput and reduces unit costs of production compared with less sustainable products (Brady et al 1999, Burnett et al 2007). According to the concept of eco-efficiency, firms can produce the same amount with fewer or the same level of resources than traditional methods, which results in decreased costs per purchased item (Gee 1994, Lye, Lee andKhoo 2001).…”