Corporate environmental performance,environmental information disclosure,and financial performance: Evidence from China

As pollution emitters and energy users, firms are important causes of environmental problems, making it increasingly vital for them to strengthen their environmental management and information disclosure policies. However, firms doubt whether it pays to be green and whether it is worthwhile to disclose their environmental information, and there are hot debates on these questions in the literature. This paper analyzes the relationships among corporate environmental performance, environmental information disclosure, and financial performance in China, which witnessed rapid growth at the price of environmental degradation. With 950 observations from 475 Chinese listed companies between 2013 and 2014, we find a U-shaped nonlinear relationship between corporate environmental performance and environmental disclosure, an insignificant relationship between environmental performance and financial performance, and a negative relationship between environmental disclosure and financial performance, which is different from most findings in developed countries. The aforementioned results imply that Chinese firms have few motivations to disclose environmental information or improve environmental performance; therefore, mandatory disclosure of environmental information is necessary, and proper environmental policy should be made to punish environmental violations and encourage better environmental performance.     

Is “going green” good to all? Evidence from South Korea

Abstract

Stakeholders have heterogeneous expectations and demands for corporate environmental responsibility (CER). Going green may cause potential conflicting-interests among stakeholders, because stakeholders who benefit from environmental-management endorse making and implementing environmental-friendly policies. In contrast, stakeholders who bear the costs of a firm’s corporate greening may not support CER initiatives. Firms with differentiated strategic-orientation, which reflect preferences of select stakeholders (controlling families, consumers, and employees), exhibit different perception of and response to CER. Using a panel dataset of South Korean manufacturing firms from 2011 to 2015, this study investigates benefits and costs of CER by exploring relationships among family owned and managed, consumer-oriented, employee-oriented firms, and corporate environmental performance (CEP). Our empirical results show that family owned and managed and employee-oriented firms are less likely to engage in environmentally friendly management. This activity occurs because corporate greening may damage these firms’ interests, such as controlling family shareholders’ private wealth and their employee’s work-life balance.     

Does It Really Pay to Be Green? An Empirical Study of Firm Environmental and Financial Performance: An Empirical Study of Firm Environmental and Financial Performance

Previous empirical work suggests that firms with high environmental performance tend to be profitable, but questions persist about the nature of the relationship. Does stronger environmental performance really lead to better financial performance, or is the observed relationship the outcome of some other underlying firm attribute? Does it pay to have cleanrunning facilities or to have facilities in relatively clean industries? To explore these questions, we analyze 652 U.S. manufacturing firms over the time period 1987–1996. Although we find evidence of an association between lower pollution and higher financial valuation, we find that a firm's fixed characteristics and strategic position might cause this association. Our findings suggest that “When does it pay to be green?” may be a more important question than “Does it pay to be green?”     

Does it pay to be science-based green? The impact of science-based emission-reduction targets on corporate financial performance

The number of companies with highly ambitious carbon emission targets is increasing rapidly. So-called science-based emission-reduction targets (SBTs) are aligned with the aim of the Paris Climate Agreement to limit global warming to below 2°C and preferably to 1.5°C. These voluntary corporate emission targets are substantially more challenging than companies’ prevailing reduction objectives, because climate science guides the target setting. By 2021, more than 2200 companies had publicly engaged in SBTs, covering more than a third of the global market capitalization. The number of participating firms has essentially doubled every year since the first SBTs in 2015. Despite this increased empirical relevance, the impact of SBTs on firm outcomes remains unclear. Notably, their effect on corporate financial performance (CFP) is unknown. The present study addresses this research gap by empirically examining the relationship between corporate carbon emission performance (CCP) and CFP of firms with SBTs from 2015 to 2020. The cross-country panel comprises 2014 observations of 465 firms. Our findings indicate a positive association between CCP and CFP for firms engaging in SBTs, implying a positive relation between decarbonization efforts and financial results. We thereby advance research on the important question of when it pays to be green. On a practical level, we provide transparency on the effects of SBTs for managers and climate-change advocates.     

Are Top Executives Rewarded for Environmental Performance? The Role of the Board of Directors in the Context of China

Based on institutional and agency theories, this study investigates whether firms use environmental performance as a criterion in incentive schemes for top executives in China, where the weakness of environmental regulations is criticized, and examines the potential moderating effects of board composition on the relationship between environmental performance and top executives’ compensation. Our analysis of 687 publicly traded firms in the manufacturing industry for the period 2008–2010 finds evidence of a positive association between environmental performance and top executives’ compensation. It shows that in firms with Chief Executive Officer–chairperson duality and larger boards, there is a tighter environmental performance–pay relationship, while top executives are found to be rewarded less for environmental performance in firms whose directors hold significant ownership. The presence of independent directors is not found to exert a significant influence on the environmental performance–pay relationship.     

Relationship between Positive Environmental Disclosures and Environmental Performance: An Empirical Investigation of the Greenwashing Sin of the Hidden Trade‐off

Firms make positive discretionary disclosures about their environmental efforts in order to signify attention to the environmental impacts of their operations. On the one hand, firms may choose to make these disclosures to deflect attention away from other activities that may contribute negatively to their environmental performance (i.e., greenwashing in the form of the “sin of the hidden trade‐off ”). On the other hand, firms making these disclosures may legitimately improve their overall environmental performance. Our study empirically addresses the following question: Do firms that make positive discretionary environmental disclosures improve their overall environmental performance more than the firms that do not make such disclosures? Specifically, because press announcements have been shown to be a popular medium for positive discretionary disclosures, we examine the relationship between announcements in the press of firms’ environmental efforts beyond compliance, and suitably weighted‐aggregated firm‐level releases of the range of pollutants reported to the U.S. Environmental Protection Agency's Toxics Release Inventory (TRI). We employ matching methods (coarsened exact matching and propensity score matching) that account for potential sources of endogeneity, including the relationship between firms’ prior environmental performance and their propensity to disclose environmental information. Our findings from the matching methods provide encouraging evidence that greenwashing in the form of the sin of the hidden trade‐off does not appear to be prevalent. Additionally, our post hoc analysis explores factors based on the content of disclosures and industry, that may help explain differences in environmental performance among the firms making the disclosures.     

Eco‐efficiency Based on Social Performance and its Relationship with Financial Performance

As corporate responsibility for environmental management has gained attention, eco‐efficiency has become recognized as an important concept for improving the social performance of the business sector as well as that of the public sector. Improving eco‐efficiency is widely accepted not only as a means of increasing economic value, but also as a means of reducing environmental effects. However, managing for eco‐efficiency should take into consideration the differences among industries, because the impact of eco‐efficiency on financial and social performance varies among industries. To explore this variation, we conducted a cross‐industry analysis of eco‐efficiency based on social performance using data envelopment analysis (DEA). DEA measures relative efficiency and is a useful tool for taking into account the relative importance of industry‐specific characteristics. Using DEA, eco‐efficiency scores were derived based on the ratio of two factors of social performance: (1) value‐added inducing and production‐inducing economic spillover effects and (2) the amount of greenhouse gases emitted and energy used. Then, we identified the relationships between our eco‐efficiency score and financial performance, which is a measure of the firm's stability. The case study is based on 272 firms in 16 industries in South Korea. Results show that firms in product manufacturing and service‐intensive industries tend to have higher eco‐efficiency scores than those in raw material or chemical‐intensive industries. In addition, most of the industries reveal no relationship between traditional financial performance metrics and eco‐efficiency scores. A handful of industries had significant relationships with one or more financial performance metrics; in some cases, these relationships were negative, whereas in others they were positive. Surprisingly, almost all industries have no significant relationships between eco‐efficiency and financial performance. This result implies that government support for policies that reward firms that attempt to be eco‐efficient are needed, or that other nonfinancial metrics that influence eco‐efficiency, such as employment and brand reputation, should be considered. This article is expected to support policy makers as they formulate industry‐specific environmental strategies.     

Corporate Carbon and Financial Performance: A Meta‐analysis

We use meta‐analytical techniques to address the question“When does it pay to be green?” Existing meta‐studies in this research field cover a range of ecological issues and synthesize a variety of environmental performance measurements. This precludes a detailed examination of how differences in measurement approaches account for variations in empirical results. In order to conduct such an examination, we focus on only one ecological issue, climate change, and one particular operational performance dimension: corporate carbon performance as expressed by a firm's level of carbon dioxide (CO₂) emission equivalents. Our sample comprises 68 estimations from 32 empirical studies, covering a total of 101,775 observations. In addition to our examination of the causal relationship, we analyze whether differences in operationalizations of carbon performance and financial performance predetermine empirical outcomes. The meta‐analytic findings indicate that carbon emissions vary inversely with financial performance, indicating that good carbon performance is generally positively related to superior financial performance. The results show that relative emissions are more likely to produce statistically significant results than absolute emissions. Furthermore, market‐based measures of financial performance are more positively related to carbon performance than accounting‐based measures. We conclude that measurement characteristics, which were not analyzed in detail by previous meta‐studies, may present a great source of cross‐study variability.     

A Method for Green Rating of Automobiles

Coherent information about the environmental impacts of a product is essential for pursuing market-oriented approaches to environmental protection. Such green rating information can influence consumers' choices and, by affecting product and corporate images in the marketplace, might also influence technology development and product planning. Automobiles and their supporting industries are the subjects of many environmental policies. Informational approaches to automotive environmental performance, however, have been relatively piecemeal. In the course of developing consumer information and market creation programs for vehicles of higher energy efficiency (an important determinant of environmental performance), the authors felt that it was necessary to address this fragmentation rather than treat efficiency in isolation from other factors. A green rating system was developed based on principles of life-cycle assessment and is usable within the confines of available data that permit discrimination among makes and models. The resulting methodology is applied in a consumer-oriented publication that rates vehicles in the U.S. market. The ratings cover all vehicles and do not constitute an eco-label, although the methodology provides groundwork for developing a label. The background, data issues, analysis, and future research needs for this rating system are described along with a summary of its application.     

生态产业共生网络形成机理及其系统解析框架

生态产业共生网络是由各种类型的企业通过经济、社会和环境方面的密切合作而形成的企业及企业间关系的复杂系统,其基本出发点是企业间必须具备环境合作,根本目的是提高资源生产力和生态效率。从形成生态产业共生网络的微观要素——企业环境责任入手,从环境伦理的角度阐释生态产业共生网络中企业的五类环境责任,并探讨其形成和运作机制——企业环境责任的市场化运作模式及约束机制。在此基础上,提出了基于技术可行性分析、经济可行性分析和社会环境可行性分析的生态产业共生网络三级解析框架,并对其解析方法做了探讨。     

Application of fuzzy VIKOR for evaluation of green supply chain management practices

Environmentally sustainable activities have received an increasing interest among the firms to improve their practices in the supply chain. Although environmental regulations force firms consider these issues, but, green issues are new, evolving every day, and requires a continuous study in the field to gain a complete understanding of the problems. In this study, we illustrate the case of a laptop manufacturer in Malaysia that pursues to evaluate green supply chain management (GSCM) indicators among its practitioners. This paper develops a quantitative evaluation model to measure the uncertainty of GSCM activities and applies an approach based on Vlsekriterijumska Optimizacija I Kompromisno Resenje (VIKOR) method which is an extension of intuitionistic fuzzy environment aiming to solve the green multi-criteria decision making (GMCDM) problem. The triangular fuzzy numbers (TFNs) were used to handle imprecise numerical quantities. Then, a hierarchical multiple criteria decision making (MCDM) model was proposed based on fuzzy sets theory and VIKOR method to deal with the problem. The results show the alternative ranks of the four evaluated companies which was based on their performance in GSCM initiatives. The results also indicated that the main criteria of the research ranked as follows respectively: eco-design, green production, green purchasing, green recycling, green transportation and green warehousing. Finally, a comparative analysis of results by fuzzy VIKOR is presented. Additionally the scope for future studies is provided at the end of the paper.     

Development of a sustainable balanced scorecard framework

The balanced scorecard (BSC) has recently been considered a proper tool for evaluating and designing the objectives of corporate sustainability. On the one hand, the theoretical body of literature provides normative sustainable balanced scorecard (SBSC) frameworks to indicate ‘what should be measured’ or ‘what should be done’ in order for firms to improve their sustainability performance. On the other hand, the empirical body of literature examines the barriers and the challenges faced by the firms in their endeavor to adopt the proposed normative frameworks. This paper aims at contributing to the theoretical body of literature by developing a new SBSC scoring framework using Global Reporting Initiative (GRI) indicators and scoring–benchmarking techniques to measure the corporate sustainability performance by drawing data from corporate sustainability reports. It also aims at contributing to the empirical body of literature by applying this framework to a sample of Greek firms.     

Economic Development Matters: A Meta‐Regression Analysis on the Relation between Environmental Management and Financial Performance

Although the existing body of empirical literature on the relation between corporate environmental performance (CEP) and corporate financial performance (CFP) is continuously growing, results are still inconclusive about this fundamental question in industrial ecology. Comparisons are difficult because of various estimation methods as well as the overall heterogeneous and complex interaction between the two constructs, but especially because of country‐specific data sets. Consequently, we raise the question of whether regional differences are the driving force buried underneath the inconclusiveness. Therefore, the aim of this article is to explore this heterogeneity by aggregating 893 existing results from 142 empirical primary studies that are based on more than 750,000 firm‐year observations. Our findings suggest a convex impact of a country's economic development on the magnitude of the CEP‐CFP effect (i.e., the effect is positive in developing countries, disappears in emerging countries, and is again positive in highly developed countries). We also find that the overall positive relation strengthens for market‐based CFP measures and diminishes for countries with civil law systems, firms from the service sector, reactive environmental activities, and process‐based CEP measures. Further, several aspects of the examined data sample and the inclusion of relevant control variables explain heterogeneity in previous research results.     

Corporate sustainability for architecture engineering and construction (AEC) organizations: Framework,transition and implication strategies

This research aims to propose a regenerative sustainability framework for AEC organizations, not only to focus on delivering green certified projects, but to encourage a revitalized approach to systematically drive their sustainability initiative. To achieve this aim, the study conducts an extensive global review of sustainable assessment systems in various industries and organizations, such as corporate sustainable reports, green company competitions, and green-renowned stocks. After learning the best practices from other industries, a sustainable development framework for the AEC organizations is developed. The proposed framework constitutes 110 key indicators covering three-dimensions of sustainability—social, environmental, and economic, respectively—and four-elements of corporate development essentials—projects, operations, governance, and stakeholders. By comparing the proposed framework to existing AEC practices, the study identifies the skewed development of corporate sustainability in the AEC industry where much awareness have been given to project-level environmental matters, but the social dimension, such as social stakeholders and social governance, are seriously lacking and need to be prioritized. A case study of a multi-millions construction company in China was investigated to validate this framework in practice. The case analysis justifies the practical value of the proposed framework, and elaborates the future need of regenerative sustainable initiatives for AEC organizations. The study contributes to the development of corporate sustainability theory in the AEC industry, and also provides industrial practitioners and policy makers with a better understanding of the next generation of corporate sustainable performance and implementation strategies.     

Methodological Reflections on the Use of Remote Sensing and Geographic Information Science in Human Ecological Research

Environmental analysts increasingly utilize remote sensing (RS) and geographic information science (GIS) techniques to study the relationship between human societies and their biophysical environment. This paper considers the influence these techniques have had on environmental research. Using the case of the Sahel, the paper first relates contemporary applications of RS/GIS to the history of the environmental scientific practice in the region. While facilitating an expansion of spatiotemporal scales, applications of these new techniques continue the methodological failings of the past by relying on visual measures of environmental change and problematic indicators of human land-use pressures. The human ecology fields (human, cultural, and political ecologies), by emphasizing the causal connections between local management and environmental change, can address the problems inherent with the spatial analytical turn in environmental science. Using the author's experience with the use of GIS in a political ecology study of grazing management in western Niger, ways of more closely integrating RS/GIS techniques into human ecological research are discussed.     

Ecological indicators for green building construction

Building construction is one of the largest final consumers of environmental resources as well as one of the largest emitters of greenhouse gas and other pollution. This paper aims to propose ecological indicators for green building construction by applying a slack-based data envelop analysis approach, in which resource conservation and environmental protection are both incorporated. We conduct an empirical analysis of ecological indicators for green building construction using China's regional panel dataset during 1995–2012, and use the analysis to further discuss the technological gaps across the regions. The findings show that: (i) half of China's provinces have a substantial potential increase of more than 60% in ecological performance for green building construction; (ii) the developed areas perform better than the developing areas; (iii) the 11th five-year plan period is a turning point for China's green building construction and development as the policies for green construction have significant effects.     

企业生态创新的研究脉络、内涵澄清与测量

生态创新因具有"双重正外部性"而得到实践界和理论界的双重青睐,与此形成鲜明对照的是,现有研究对生态创新概念的适用层次、理论定位、内涵与测量等基本理论问题的理解模糊而缺乏一致性。回顾了企业社会责任、环境管理和创新管理三大领域的相关研究成果,辨析了企业生态创新的内涵特征与外延,进一步梳理了企业生态创新的维度划分与测量,对企业生态创新的未来研究给出了展望。     

Environmental Supply-Chain Management in the Computer Industry:A Transaction Cost Economics Perspective

Our article uses the theory of transaction cost economics as a conceptual basis for examining the contracting mechanisms by which firms in the computer industry structure programs to encourage their suppliers to improve their environmental management systems and/or the environmental quality of their products. We explore the economic transactions hazards associated with asking suppliers to invest in the specialized technologies required to improve environmental performance of products and management practices and the relational contracting mechanisms computer industry firms are using to protect themselves against these hazards. We also describe the importance the managers we interviewed attributed to various transactions hazards and their perceptions of how well their firms were coping with them. We conclude by discussing questions for future research. By using TCE to frame our analysis of how computer manufacturers are structuring their relationships with their suppliers in the environmental area, we hope to show how social science theory can be used to enrich and increase the practicality of the work done by engineers and others in the mainstream areas of the industrial ecology field.     

Indicators for an expanded business operations model to evaluate eco-smart corporate communities

Major real-estate developers of business parks around the world have made environmental responsibility a priority in building design, construction, and operation. We review the green real-estate development movement occurring globally, and synthesize applicable concepts into a framework called the expanded business operations model (EBOM) to help companies gauge their goal of environmental stewardship. In contrast to the typical flow diagram of a typical business operations model, the EBOM indicates cycling behavior that synergistically enhances each of the four identified categories—Environment, Facilities, Business Synergism, and Green Image. The ultimate goal of these Eco-smart Corporate Communities is to positively impact the local and larger community, while increasing the economic success of property developers and their tenants. We review governmental policies that drive developers toward environmentally friendly techniques, outline tools and programs that assist in the implementation and evaluation of green design plans, and summarize other drivers (i.e., environmental and social issues) that encourage green building and synthesize them into an indicator system for practitioners’ reference. Using four independently operated eco-smart corporate communities as case studies, we identify the measures taken to enhance each of the four categories within the framework, and analyze the cascade of impacts. With this framework, it will be possible to set achievable goals that mark reasonable progress in corporate environmental policies.     

Does environmental management improve enterprise's value? – An empirical research based on Chinese listed companies

The company's environmental management behaviors can improve the relationship between the company stakeholders, help companies to sustainably develop. But it is more seen as an obligation and cost of the company's environmental protection in developing countries. So what kind of impact the environmental protection have on the value of the company? Taking Chinese listing Corporation as a sample. This paper analyzes the impact of enterprises’ environmental management and its disclosure on corporate value. We conclude that environmental management excluding independent environment report can improve corporate value. In specific environmental management measures, producing environmental friendly products can help environmental friendly products gain recognition and improve corporate value significantly.