Motivations for Voluntary Environmental Management
Khanna, Madhu, Koss, Patricia, Jones, Cody, Ervin, David, Policy Studies Journal
Firms are increasingly undertaking initiatives to proactively improve their environmental performance and go beyond simply complying with regulatory standards. Some firms are adopting an internally structured mix of environmental management practices (EMPs) that reflect a commitment to integrating environmental considerations into operational decisions. These EMPs include the establishment of internal standards, goals, and policies for environmental performance improvements, use of environmental cost accounting methods, and training and compensating employees to improve environmental performance. Firms have flexibility in the mix of practices they adopt, and can tailor the mix to suit the needs of their organization. Firms also have a choice of participating in one or more voluntary environmental programs (VEPs)--such as ENERGY STAR, Climate Savers, and ISO 14001--established by regulatory agencies, trade associations, or third parties. While some programs such as ENERGY STAR and green building programs require firms to adopt specific equipment or certain types of materials, others, such as ISO 14001, require firms to adopt management practices that meet standards specified by the program.
This article classifies voluntary environmental initiatives by firms into two categories, participation in VEPs and adoption of EMPs. It investigates the factors motivating firms to undertake each type of initiative and explores any differences in the types of firms likely to participate in VEPs and those likely to adopt EMPs. Although there is likely to be some overlap among the firms that participate in VEPs and those that adopt EMPs, there could also be differences because the costs and benefits of undertaking the two types of initiatives are not the same. Participation in VEPs may allow firms to obtain credible recognition for their environmental actions because many of these programs allow participating firms to display logos on their products or recognize firms through newsletters, websites, and awards. This recognition may help differentiate firms from competitors and appeal to consumers with green preferences. These good faith efforts may also enable firms to preempt future regulations or mitigate the stringency of existing regulations. However, participation in VEPs can be costly, because modifications to equipment or certification to meet program standards is typically required.
On the other hand, adoption of internal EMPs without formal certification enables firms to avoid certification costs and remain flexible regarding the intensity of EMP implementation, although it may not provide the same level of public recognition. Moreover, EMPs typically must be tailored to meet a firm's needs, thereby requiring greater managerial innovativeness. By contrast, with at least some VEPs, firms can simply adopt off-the-shelf processes, practices, and labeled equipment.
Furthermore, firms may differ not only in whether they join a VEP or adopt an EMP, but also in the extent to which they engage in each type of activity. Since each VEP is typically focused on one environmental issue, facilities that seek to improve environmental performance across multiple indicators may be willing to participate in several VEPs. Firms may also adopt multiple EMPs because an individual practice by itself may achieve little. Synergistic relations between various practices may necessitate joint adoption to achieve meaningful and effective change in organizational behavior.
To explain differences in the number of voluntary activities being adopted by facilities while taking into account the discrete, nonnegative, and count nature of the data, we estimate Poisson regression models for each of the two alternative measures of voluntary environmental activity--the count of VEPs in which a firm participates and the count of EMPs adopted. We examine the importance of a variety of external and internal factors in influencing …
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Publication information: Article title: Motivations for Voluntary Environmental Management. Contributors: Khanna, Madhu - Author, Koss, Patricia - Author, Jones, Cody - Author, Ervin, David - Author. Journal title: Policy Studies Journal. Volume: 35. Issue: 4 Publication date: November 2007. Page number: 751+. © 1999 Policy Studies Organization. COPYRIGHT 2007 Gale Group.
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