Environmental proactivity and firm performance: a fuzzy-set analysis

Abstract

Purpose – The purpose of this paper is to explore causal complexity in the relationship between environmental proactivity and firm performance. Using data collected from 27 Australian firms and controlling for the organizational life cycle, type of industry and external contingencies, the study empirically examines environmental proactivity in high-performing firms from polluting industries. Design/methodology/approach – The data were analyzed using fuzzy-set qualitative comparative analysis. Findings – In general, the results of the analysis imply that environmental proactivity is not always associated with high firm performance, and that environmental proactivity is not as important as the other causal conditions for high-performing firms in highly polluting industries. Research limitations/implications – The study addresses the relationship between environmental and firm performance more holistically by including a number of the firm’s external and internal factors identified as important in past research. Second, it offers a new perspective on the relationship with its systematic comparative analysis of complex cases. Next, it identifies different combinations of conditions (paths) leading to a high firm performance and, finally, the core complementary model allows an exploration of which factors are essential and which are less important or even irrelevant to high-performing firms. Practical implications – Based on the findings, firms from highly polluting industries can determine in which circumstances, if any, the adoption of environmental proactivity will result in a positive firm performance. Originality/value – The study is valuable because it contains a rich set of measures of the firm’s external and internal environment, thus allowing a more holistic examination of the relationship between environmental proactivity and firm performance.

The moderating effect of ‘Green’ HRM on the association between proactive environmental management and financial performance in small firms

“…Today, many firms recognise that a reactive approach to environmental regulation that aims only at compliance is no longer a competitive option, and are adopting a proactive approach to environmental management; an approach characterised by future-oriented management practices initiated voluntarily with a strategic purpose that extends beyond compliance and mitigation to enhance firm performance through emphasis on prevention of waste, reduction in energy consumption, and product and process innovation to minimise environmental impact across a product's life cycle as a competitive priority (Aragón-Correa, 1998;Lannelongue, Gonzalez-Benito, & Gonzalez-Benito, 2015;Primc & Č ater, 2015). Additionally, the achievement of environmental sustainability, adoption of a proactive approach can have the strategic motivation of achieving competitive advantage and superior performance through improved revenue flows and reduced costs (e.g.…”

Corporate social responsibility and financial performance relationship: a review of measurement approaches

“…Examples of environmental activities include pollution control investment data (Peng & Yang, 2014), deployment of a carbon-reduction strategy (Cadez & Czerny, 2016;Lee, 2012;Liu, 2012;Liu & Liu, 2016), eco-control usage (Henri & Journeault, 2010), the ratio of toxic waste recycled to total toxic waste generated (Al-Tuwaijri, Christensen, & Hughes, 2004), adoption of global environmental standard (Dowell, Hart, & Yeung, 2000), environmental proactivity (Primc & Čater, 2015), environmental management accounting implementation (Mokhtar, Jusoh, & Zulkifli, 2016), environmental sustainability policies (Naranjo-Gil, 2016), etc. Examples of philanthropic activities include donations (Lin, Yang, & Liou, 2009), growth in charitable contributions (Lev, Petrovits, & Radhakrishnan, 2010) and public health policies (Naranjo-Gil, Sánchez-Expósito, & Gómez-Ruiz, 2016).…”

Carbon Emission Disclosure and Profitability – Evidence from Manufacture Companies in Indonesia

“…Increased disclosure of GHG emissions indicates a management perception of the legitimacy and usefulness of disclosure of GHG emissions to increase community confidence [30]. Primc & Čater (2015) explains that environmental activity is not always associated with an increase in company performance. However, business organizations are required to calculate their social and environmental impacts [33], companies must respond to climate change caused by GHG emissions by industry mechanisms and policies with regard to carbon emissions [48].…”

“…Reaffirmed that disclosure of carbon emissions is not necessarily linked to earnings, information disclosure may develop industry targets and disclosure practices that are more specific to the interests of stakeholders [11]. Environmental decisions affect organizational activities including production, marketing and distribution, and human resources to integrate that need special strategies to increase company value [44].…”