Article

Covenant with Weak Swords: ISO 14001 and Firms''Environmental Performance

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Abstract

Voluntary environmental programs are codes of progressive environmental conduct that firms pledge to adopt. This paper investigates whether ISO 14001, a voluntary program with a weak sword-a weak monitoring and sanctioning mechanism-can mitigate shirking and improve participants' environmental performance. Sponsored by the International Organization for Standardization (ISO), ISO 14001 is the most widely adopted voluntary environmental program in the world. Our analysis of over 3,000 facilities regulated as major sources under the U.S. Clean Air Act suggests that ISO 14001-certified facilities reduce their pollution emissions more than non-certified facilities. This result persists even after controlling for facilities' emission and regulatory compliance histories as well as addressing potential endogeneity issues between facilities' environmental performance and their decisions to join ISO 14001. © 2005 by the Association for Public Policy Analysis and Management

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... 2008; Daddi et al. 2011;Iraldo et al. 2009;Potoski and Prakash 2005), compliance with environmental regulations (e.g., Dahlström et al. 2003;Dasgupta et al. 2000) and technological environmental innovations (e.g., Lim and Prakash 2014;Rennings et al. 2006;Wagner 2007Wagner , 2008. The results are not necessarily in agreement, depending on how environmental performance is measured. ...
... 5 For example, Russo (2002) provided evidence that ISO 14001 certification helped U.S. electronics facilities reduce their toxic emissions. Potoski and Prakash (2005) found that ISO 14001 adoption results in decreased air pollutant emissions. Similarly, Iraldo et al. (2009) found that EMAS has a positive effect on the level of selfreported environmental performance perceived by the organization itself. 2 http:// www. ...
... For example, binary probit (Rennings et al. 2006;Iraldo et al. 2009), multivariate regression (Iraldo et al. 2009) were used, in addition to the analyses of EMS related statistics (Dahlström et al. 2003;Tan 2005) and meta analyses (Darnall and Sides 2008). To take into account potential endogeneity of EMSs, some studies employed bivariate probit and multinomial logit (Wagner 2008), two stage least squares (Dasgupta et al. 2000), and linear regression with endogenous treatment effect (Potoski and Prakash 2005). For longitudinal data, panel fixed effects and instrumental variables (Barla 2007;Nishitani 2011;Lim and Prakash 2014), fixed effects GMM and sample selection corrections methods (Lim and Prakash 2014) were applied. ...
Article
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To reduce their environmental impacts, a growing number of organizations worldwide have implemented environmental management systems (EMSs). In these organizations, energy conservation activities become usual behaviors for employees; thus, we hypothesize that employees continue such energy saving behaviors at home. This hypothesis is supported by data from surveys of individuals in Japan. Specifically, we find that the probability of engaging in energy saving practices at home is higher and that expenditures on electricity use are lower for individuals who work in organizations that implement EMSs than for individuals who do not work in organizations with EMSs. Our results suggest that beyond the original purpose of helping organizations reduce their environmental impacts, EMSs work as an intervention to promote household energy saving.
... They would choose this approach because they are confident the current approach maximizes environmental performance or minimizes the risk of a future accident (Judge et al. 1998, Schulz-Hardt et al. 2009). Of the three options, escalation would be the preferred response by regulators and environmental stakeholders because the number of EMPs a firm adopts is directly related to environmental performance (Anton et al. 2004, Hartmann and Vachon 2018, Klassen and Whybark 1999, Potoski and Prakash 2005, Toffel 2005). Conversely, de-escalation would be of concern because it results in firms adopting fewer EMPs in the current year, and possibly future years, than the firm would have adopted in the absence of an accident, with potentially significant negative ramifications for environmental performance. ...
... Examples include changes to process, product, and technology, revised managerial policies, environmental training, participation in strategic alliances and partnerships, conducting audits and risk assessment, managing supplier environmental performance, implementing KPIs and scorecards, environmental restoration efforts, and commitments to various emission reduction protocols, among others. The adopted EMPs constitute one dimension of firm-level corporate social responsibility (Klassen and McLaughlin 1996) and directly impact firm environmental performance (Anton et al. 2004, Hartmann and Vachon 2018, Klassen and Whybark 1999, Potoski and Prakash 2005, Toffel 2005. ...
... Benefits derived from EMP adoption are also varied. One obvious benefit is reduced air, water, and land pollution (Anton et al. 2004, Hartmann and Vachon 2018, Klassen and Whybark 1999, Potoski and Prakash 2005, Toffel 2005). Depending on the EMP, adopters may also realize a financial benefit Lenox 2002, Su et al. 2015). ...
Article
Spill and pollution (SP) accidents cause significant damage to the natural environment. They also result in financial costs and reputational losses for the offending firm. As such, understanding how firms respond to such crises is of significant interest to firm stakeholders, such as investors, customers, regulators, NGOs, employees, and local communities. In this study, we examine whether publicly disclosed SP accidents cause firms to alter their approach to environmental management, as expressed by the adoption of environmental management practices (EMPs). Using a unique panel data from 2002 to 2013, representing over 400 publicly‐traded US manufacturing firms, we find that in the absence of a SP accident, firms adopt more EMPs each year. However, when firms experience a SP accident they respond in surprising ways: while sustainability leading firms do not alter their existing approach to EMP adoption, regardless of the severity of the accident, all other firms do. Firms which are not sustainability leaders escalate the number of EMPs they adopt after low severity accidents and de‐escalate the number of EMPs they adopt after high severity accidents. We also find that de‐escalation can last for up to three years and firms do not seem to recover from de‐escalation in future years. Finally, incurring more accidents or more severe accidents leads to greater de‐escalation. Given that the number of EMPs firms adopt determines a firm’s environmental performance, de‐escalation can have significant negative consequences for both the natural environment and firms themselves.
... They also find it easier to incorporate new knowledge from VEPs into their existing practices because they have better experience with environmental practices (Sharma & Vredenburg, 1998). Finally, firms with superior prior environmental performance also use VEPs to differentiate themselves from firms with environmental legitimacy problems, or to develop "greener" brands (Arora & Cason, 1996;Potoski & Prakash, 2005a;Rivera, 2002). ...
... The two coders had a high degree of inter-rater agreement (Cohen's kappa: 0.98). school (e.g., Potoski & Prakash, 2005a), population density (e.g., Antweiler & Harrison, 2007), and community contributions to environmental NGOs (e.g., Brouhle et al., 2009). ...
... First, the positive effect of prior financial performance on participation is consistent with single program studies that find it gives firms patient capital needed to use VEP adoption strategically (e.g., Arora & Cason, 1995;Darnall, 2006;King & Lenox, 2001, Moon & de Leon, 2007. The tentative support from partial correlations for a positive relationship between prior environmental performance and VEP participation suggests that VEPs do in fact offer low-hanging competitive fruit for firms that already have strong environmental performance (e.g., Bansal & Hunter, 2003;Prakash & Potoski, 2005a). This result also has implications for studies of VEP effectiveness that use selection models to control for prior environmental performance in first stage analyses. ...
Article
We meta-analyze research on why firms join voluntary environmental programs (VEP) to assess the impact of program stringency, or the extent to which they have rigorous, enforceable standards on these decisions. Stringency creates trade-offs for firms by impacting programs’ effectiveness, legitimacy, and adoption costs. Most research consider singular programs and lack cross program variation needed to analyze program stringency’s impact. Our meta-analysis addresses this by sampling 127 studies and 23 VEPs. We begin by identifying common institutional and resource-based drivers of participation in the literature, and then analyze how program stringency moderates their impacts. Our results suggest that strictly governed VEPs encourage participation among highly visible and profitable firms, and discourage it when informal institutional pressures are higher, and firms have prior experience with other VEPs or quality management standards. We demonstrate that VEP stringency has nuanced effects on firm participation based on the institutional and resource-based factors facing them.
... They also find it easier to incorporate new knowledge from VEPs into their existing practices because they have better experience with environmental practices (Sharma & Vredenburg, 1998). Finally, firms with superior prior environmental performance also use VEPs to differentiate themselves from firms with environmental legitimacy problems, or to develop "greener" brands (Arora & Cason, 1996;Potoski & Prakash, 2005a;Rivera, 2002). ...
... The two coders had a high degree of inter-rater agreement (Cohen's kappa: 0.98). school (e.g., Potoski & Prakash, 2005a), population density (e.g., Antweiler & Harrison, 2007), and community contributions to environmental NGOs (e.g., Brouhle et al., 2009). ...
... First, the positive effect of prior financial performance on participation is consistent with single program studies that find it gives firms patient capital needed to use VEP adoption strategically (e.g., Arora & Cason, 1995;Darnall, 2006;King & Lenox, 2001, Moon & de Leon, 2007. The tentative support from partial correlations for a positive relationship between prior environmental performance and VEP participation suggests that VEPs do in fact offer low-hanging competitive fruit for firms that already have strong environmental performance (e.g., Bansal & Hunter, 2003;Prakash & Potoski, 2005a). This result also has implications for studies of VEP effectiveness that use selection models to control for prior environmental performance in first stage analyses. ...
... Senior managers' commitment to an ISO 14001-certified company will have a positive impact by improving the environmental mindfulness of the staff and changing organisational behavior based on the environmental concerns, thus increasing the chances of attaining desired EP [13]. Moreover, studies have brought to light that companies with an ISO 14001-certified EMS have stronger chances of achieving a higher EP [14,15]. Aiyub et al. [16] examined EP of 59 companies in the UK that were already ISO 14001 certified. ...
... The findings of this study agree with those of other scholars who have identified a statistically significant relationship between EPE and the implementation of ISO 14001. Such scholars include [4,8,[12][13][14][15][16][17][18][19][20][21][22][23][24] and they disagree with the voices calling for negative effects, such as in [9, 12, 25-29, 31, 32, 37, 45, 50]. Additionally, this study demonstrates that there is a relationship, which rejects the claim of MEPI [29] that there does not exist any statistically significant relationship between EPE and the implementation of EMS. ...
... Senior managers' commitment to an ISO 14001-certified company will have a positive impact by improving the environmental mindfulness of the staff and changing organisational behavior based on the environmental concerns, thus increasing the chances of attaining desired EP [13]. Moreover, studies have brought to light that companies with an ISO 14001-certified EMS have stronger chances of achieving a higher EP [14,15]. Aiyub et al. [16] examined EP of 59 companies in the UK that were already ISO 14001 certified. ...
... The findings of this study agree with those of other scholars who have identified a statistically significant relationship between EPE and the implementation of ISO 14001. Such scholars include [4,8,[12][13][14][15][16][17][18][19][20][21][22][23][24] and they disagree with the voices calling for negative effects, such as in [9, 12, 25-29, 31, 32, 37, 45, 50]. Additionally, this study demonstrates that there is a relationship, which rejects the claim of MEPI [29] that there does not exist any statistically significant relationship between EPE and the implementation of EMS. ...
... meaningfully address the targeted issues-with internal flexibility-the perception by member firms that the institution is minimizing the burdens of participation (Barnett and King 2008, Haack and Rasche 2021, Lenox 2006. Specifically, since perceived credibility with external stakeholders is central to its ability to deliver reputational benefits to its member firms, PRIs face ongoing pressures to appear stringent enough to satisfy external stakeholders (Gunningham andRees 1997, Potoski andPrakash 2005). At the same time, PRIs face ongoing pressures to ensure participation is not overly burdensome for member firms, else they risk losing members that perceive the burden to be excessive. ...
... To achieve these reputational benefits, the institution must be perceived as credible by key external stakeholders (see Arevalo and Aravind 2017, Cashore et al. 2003, King 2014, Miller and Bush 2015. Accordingly, a key objective in the design and ongoing development of PRIs is to ensure the perceived credibility of the institution, since doing so gives PRIs their legitimacy as a form of regulation (Cashore 2002, Potoski andPrakash 2005). ...
Article
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The forces that threaten to break apart private regulatory institutions are well known, but the forces that sustain them are not. Through a longitudinal inductive study of the Towards Sustainable Mining (TSM) program in the Canadian mining industry, we demonstrate how private regulatory institutions are sustained by strategically manipulating different aspects of an institution’s stringency. Our findings show how shifts in external conditions decreased benefits of participation for firms, triggering institutional destabilization. We demonstrate how the interdependent mechanisms of hollowing—actions that ratchet down aspects of stringency associated with high compliance costs—and fortifying—actions that ratchet up aspects of stringency associated with low compliance costs—worked together to stabilize the institution by rebalancing the competing pressures that underpin it. However, these same mechanisms can hinder the ability of these institutions to substantively address the targeted issues, even as they become more stringent in some areas. Our study advances research on private regulation by showing how different aspects of stringency can be simultaneously ratcheted up and ratcheted down to sustain private regulatory institutions. Further, in positioning institutional stability as an ongoing negotiation, we elucidate the key custodial role of governing organizations like trade associations in institutional maintenance. Funding: Financial support fromthe Social Sciences and Humanities Research Council of Canada [Grant 752-2012-2294] is gratefully acknowledged.
... This equated to a difference of~ 25 days out of a year. In subsequent research, Potoski and Prakash (2005b) found that ISO 14001 certified facilities reduced pollution emissions more than non-certified facilities. However, in their study of electronics plants, Russo and Harrison (2005) found that (a) ISO 14001 certification was associated with higher emissions and (b) it was more likely that poor past emission performance led to adoption of ISO 14001 than that the adoption of ISO 14001 led to superior environmental performance. ...
... This led Russo and Harrison (2005: 588) to wonder if ISO 14001 certification, which does not mandate emission reductions, was adopted merely to 'provide cover for poor emissions performance' . Potoski and Prakash (2005b) developed a useful framework for conceptualizing and comparing voluntary programmes, including ISO 14001. They used the metaphor of the covenant and the sword (weak sword as monitoring only; medium sword as monitoring and public disclosure; strong sword as monitoring, public disclosure and sanctioning) to differentiate among programmes based on the method used to cajole members to honour programme obligations. ...
Chapter
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Increasingly corporations and other business organizations are being urged to take the major responsibility for halting environmental degradation or have come to the realization on their own that they should play the key leadership role in addressing and abating environmental problems. The result has been ambitious campaigns to ‘green’ business and other organizations and institutions, campaigns that have become so popular that they have been described as a management fashion (Fineman 2001; Rhee and Lee 2003). In this chapter, we examine this trend as a form of green politics. We refer to it as the new corporate environmentalism (NCE) – defined as rhetoric concerning the central role of business in achieving both economic growth and ecological rationality and as a guide for management that emphasizes voluntary, proactive control of environmental impacts in ways that exceed or go beyond environmental laws and regulatory compliance. The NCE is most directly relevant to business organizations but, to some degree, it puts pressure on all contemporary organizations and their leaders. Taken at face value, the NCE seems like a positive development, one certain to contribute to environmental protection and restoration. Not everyone, however, sees this as a uniformly positive trend. Some analysts contend that much of the greening of business and other organizations can be dismissed as greenwashing – all style and no substance (Greer and Bruno 1996; Tokar 1997; Beder 2002). Due to the pervasiveness of NCE campaigns, others have questioned whether business interests have co-opted or hijacked the broader environmental movement (e.g. Welford 1997; Bruno and Karliner 2002). The position we take in this chapter is that the voluntary greening of organizations is too important to green politics to dismiss, and green politics are too important to the establishment of peace, security, social justice, ecological welfare and other vital ends to settle for a one-dimensional public sphere controlled by limited business interests. The main purpose of this chapter is to critically review and analyse the NCE discourse, principally the academic research on this phenomenon.
... shirking (Potoski & Prakash, 2005), or greenwash (Kim & Lyon, 2015;Lyon & Montgomery, 2015). Symbolic self-regulation occurs when firms claim compliance with a self-regulatory regime but fail to meaningfully integrate its rules, norms, and practices. ...
... The costs and audit process required for certification are thought to limit greenwash by firms with low environmental performance (Delmas & Burbano, 2011;Delmas & Keller, 2005;Potoski & Prakash, 2005, 2009Spence, 2002), but no system is perfect. For example, LEED requires firms to submit evidence of environmental improvements, but there was no on-the-ground or on-going audit process for the initial certification standards. ...
Article
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Does voluntary participation in eco‐certification become more substantive over time, or less? Although past research on voluntary programs suggests that later participants are more likely to greenwash by only symbolically adopting voluntary standards, theories of regulatory competition suggest a possible “race to the top.” We argue that participation in voluntary programs can facilitate competition that enables a race, and we advance a theory of self‐regulatory competition to explain dynamics of participation in voluntary environmental programs. Under this perspective, environmental self‐regulation may facilitate a race to the top, despite possibilities for purely symbolic adoption. Analyzing data from a voluntary green building certification program in the United States, we introduce a methodology to distinguish propensities for symbolic certification from more substantive environmental performance. Data demonstrate that later adopters invest additional resources to attain higher certification, becoming greener and suggesting a race to the top in a voluntary greenbuilding certification program.
... This would lead firms to commit to avoid purchasing products whose production contributed to deforestation, especially in the global south (Brody, 1987;Rainforest Alliance, 2001), as well as engaging stakeholders (Sharma, 1998). These efforts were subsequently reinforced, and followed, by firms seeking outside certification of their internal 'environmental management systems' that were put in place to help achieve organisational sustainability goals (Potoski and Prakash, 2005). However, following concerns that firms may not be best placed to develop the standards to ameliorate the environmental challenges their operations were causing, and similar concerns that extractive businesses had 'watered down' intergovernmental processes, a range of NGOs, led by the WWF and likeminded private sector interests, came together to create the Forest Stewardship Council (FSC) global certification system (Cashore et al., 2004b). ...
... This would lead firms to commit to avoid purchasing products whose production contributed to deforestation, especially in the global south (Brody, 1987;Rainforest Alliance, 2001), as well as engaging stakeholders (Sharma, 1998). These efforts were subsequently reinforced, and followed, by firms seeking outside certification of their internal 'environmental management systems' that were put in place to help achieve organisational sustainability goals (Potoski and Prakash, 2005). However, following concerns that firms may not be best placed to develop the standards to ameliorate the environmental challenges their operations were causing, and similar concerns that extractive businesses had 'watered down' intergovernmental processes, a range of NGOs, led by the WWF and likeminded private sector interests, came together to create the Forest Stewardship Council (FSC) global certification system (Cashore et al., 2004b). ...
... Green IT standards facilitate the sustainability reporting and tracking of sustainability requirements through the management and control of documents and reduction of overhead associated with green IT standards such as ISO 14001 (El-Gayar & Fritz, 2006). Standards audits induce firms to uphold their commitment to standards and increase their sustainability-monitoring capability (Potoski & Prakash, 2005). As green IT standards promote environmental cognition among employees (Jenkin et al., 2011), the learning attained from these standards enhances efficiency and profit via lower cycle times and higher productivity (Isaac et al., 2004). ...
Article
How do green information technology (IT) standards and organizational strategies jointly influence firms’ environmental sustainability and financial performance? This is an important question, as many firms adopt green IT standards without considering the fit with their organizational strategies, and therefore face uncertain or mixed outcomes. We address this question by developing a theory-driven conceptual framework and collecting archival data on green IT standards and green IT organizational strategies from more than 230 firms in India. Our analysis yields two main findings. First, an environment-focused green IT organizational strategy has a stronger positive moderating effect than a cost-focused green IT organizational strategy on the association between green IT standards and sustainability-monitoring capability. Similarly, an environment-focused green IT organizational strategy has a stronger positive moderating effect than a cost-focused green IT organizational strategy on the association between green IT standards and financial profit. Second, a dual-focused green IT organizational strategy positively moderates the association between green IT standards and profit. This study provides a theoretical explanation and empirical evidence to support the salience of green IT standards and complementary organizational strategies in advancing environmental sustainability and financial performance objectives. It also informs managerial decision-making about how a firm can choose the appropriate green IT organizational strategy to enhance the sustainability-monitoring capability and financial benefits of green IT standards.
... They also told that role of top management is very important to understand various environmental issues of organisation and they assure to realize these issues in their system. Potoski and Prakash (2005) confirmed that government regulations and enforcement are the drivers which significantly affect firm's environmental policy. Various regulations and legislations of government made for environmental protection will force firms to be more environmentally sound. ...
Article
Due to various government regulations and many other environmental related problems industries have to focus on these issues if they want to make business in the competitive market. Implementation and certification of Environmental Management System (EMS) is very important for industries as it will help to remove many environmental related issues and for sustainable development. Environmental related issues play different role in developed and developing countries. Developed countries have set up their own environmental standards and regulations which should be fulfilled by industries of other countries to have business with them. Regulatory pressure play important role to save environment but other factors like customer awareness, competitor’s pressure, societal pressure etc. are also important. Environmental issues related to automotive sectors need appropriate investigations in developing countries. Various drivers which create pressure on companies to adopt EMS practices are identified by extensive literature review which is the main objective of this paper. It includes providing a background on related concepts, literature review on various environment related issues and the concluding remarks for this review to save environment to some extent.
... Including environmental management within the overall strategy of the company will allow according to Conde et al. (2003, p.45) to comply with the current legislation so as to avoid administrative sanctions (Saizarbitoria et al., 2008), and to respond to consumers' demands and other interest groups, as well as to meet the requirements of competition and the customers in relation to environmental protection. This is reflected in a cost-saving amount (Melnyk et al., 2002;Pan, 2003;Zutshi and Sohal, 2004), in an improved external image among its clients and internal image among its workers (Zeng et al.), improved productivity (Pan, 2003;Poksinska et al., 2003;Gavronski et al., 2008) and improvement of the environmental performance of organizations (Potoski and Prakash, 2005;Link and Naveh, 2006), among others. ...
Conference Paper
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Globally, the Muslim population is growing and if current trends continue, Muslims will make up 26.4% of the world’s total projected population of 8.3 billion in 2030. This worldwide growth of the Muslim population in the middle class and younger population has meant that Muslim tourists are becoming a significant segment within the global travel and tourism sector. According to the latest statistics total Muslim tourist arrivals were 116 million in 2014 and the Islamic Republic of Iran, despite having 7th rank in terms of Muslim tourist arrivals with 4.1 million total Muslim tourist arrivals, was in the 11th rank in terms of Islamic and Halal tourism receipts with US$ 942.5 million recorded in 2014. Sub-optimal place of Iran in Islamic and Halal tourism market as one of the most important Islamic countries, its low share of this highly profitable market despite possessing maximum Muslim population and an Islamic government with high compatibility of this type of tourism with its socio-cultural and religious values and norms, depicts the importance of this newfound type of tourism as one of the most appropriate options for tourism industry development in Iran and necessity of paying attention to its high potential in this countries tourism planning and policy-making process.
... Furthermore, EMSs enable companies to reduce emissions (e.g. Potoski & Prakash, 2005;Russo, 2009) and the risk of environmental accidents (e.g. Bravi et al., 2020). ...
Article
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The growing societal and political focus on sustainability at global level is pressurizing companies to enhance their environmental, social and governance (ESG) performance to satisfy respective stakeholder needs and ensure sustained business success. With a data sample of 4292 companies from Europe, East Asia and North America, this work aims to prove through a cross-regional empirical study that quality management systems (QMSs) and environmental management systems (EMSs) represent powerful business tools to achieve this enhanced ESG performance. Descriptive and cluster analyses reveal that firms with QMSs and/or EMSs accomplish statistically significant higher ESG scores than companies without such management systems (MSs). Furthermore, the results indicate that operating both types of MSs simultaneously increases performance in the environmental and social pillar even further, while the governance dimension appears to be affected mainly by the adoption of EMSs alone. To the best of the authors’ knowledge, such large-scale, cross-regional analysis of the impact of QMSs and EMSs on ESG performance is absent from the literature, thus paving the way for pioneering academic research. The study is grounded in stakeholder theory and demonstrates managers how the implementation of MSs can assist in successfully translating stakeholders’ sustainability concerns into actionable business practice. Furthermore, it allows decision-makers to gain insight into the strengths and weaknesses of QMSs and EMSs for tackling specific ESG issues and highlights the performance advantages of combining both MSs. The work also depicts policymakers how corporate sustainable performance (CSP) can be improved by fostering MSs adoption, thereby emphasizing the importance of supporting and facilitating the diffusion of these systems.
... Empirical studies to date have produced mixed results about the impact of ISO 14001 certification on environmental performance (Arimura et al., 2016). While some papers show that ISO 14001 adopters outperform non-adopters on environmental dimensions (Arimura et al., 2008;Dasgupta et al., 2000;Potoski and Prakash, 2005), some other papers do not point to a performance-enhancing effect (Barla et al., 2007;Blackman, 2012;Darnall and Sides, 2008). According to Arimura et al. (2016), differences in institutional factors and regulatory settings and how the endogeneity of ISO 14001 adoption is tackled explain the findings of equivocal results. ...
... The implementation of the environmental management system in the organization is part of the implementation of the principles of the sustainability concept, which consists in striving to achieve a balance between environmental, social and economic goals (Wysokińska-Senkus 2013). Most researchers of environmental management systems indicate the visible positive effects of implementing and maintaining an environmental management system according to the requirements of ISO 14001 at the level of environmental efficiency (Wysokińska-Senkus, 2008;Dahlström and Skea 2002;Florida and Davidson, 2001;King and Lenox, 2002;Poksinska and Dahlgaard, 2003;Potoski and Prakash, 2005;Ambec and Lanoie, 2008;King, Lenox, and Terlaak, 2005 Organizations implement and certify environmental management systems for compliance with the PN-EN ISO 14001 standard. This standard includes requirements for an environmental management system that enable the organization to design and implement environmental policies and objectives. ...
... On the other hand, it is important to focus on firm performance as well as environmental performance. The dual externalities of environmental management, the reorganisation of resources, management, human resources, and green Responsible Editor: Nicholas Apergis technological innovation all impose additional costs on firms, and it is crucial for sustainable development that they can bring about an increase in the value of a firm (Pinkse and Kolk 2010;Potoski and Prakash 2005). Therefore, it is necessary to verify whether green innovation and environmental management improve environmental performance and the value of a firm. ...
Article
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There is a debate in the literature about the relationship between green innovation, environmental management, environmental performance, and the value of a firm. Herein, the effects of green innovation and environmental management on environmental performance are analysed using a stochastic frontier model for energy-intensive listed companies from 2011 to 2017; the effects thereof on the value of a firm are assessed empirically. The results show that green innovation and environmental management have a positive effect on corporate environmental performance, and green innovation plays a complete mediating role between environmental management and environmental performance. The significant positive effect of green innovation on value of a firm confirms Porter’s hypothesis, but the positive effect of environmental management on value of a firm is not verified. Finally, recommendations that are aimed at improving corporate environmental performance are given.
... EMS ISO14001 enables high interactions between human resource management (HRM) and environmental management [100], resulting in green HRM. Similarly, green HRM is likely integral for the successful implementation of EMS ISO14001 [15]. ...
Article
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Sustainability is integral for organizations to manage environmental issues. Environmental awareness among stakeholders builds pressure on manufacturers to adopt green human resource management practices (GHRMPs), environmental management system (EMS), and foster organizational citizenship behavior for the environment (OCBE) to improve sustainable performance (SP). This study investigates the mediating effects of OCBE and EMS on the relationship between GHRMP and SP among ISO14001-certified manufacturing firms and SP. The quantitative design employed, and data of 227 respondents were analyzed via the SEM technique using AMOS 24™. Thus, findings revealed that GHRMP is positively related to SP, while OCBE and EMS partially mediated the relationship between GHRMP and SP among ISO14001-certified Malaysian manufacturing firms. This study makes novel academic and practical contributions to green HRM, organizational behavior, and sustainable performance. However, this study also has some limitations.
... There is a large body of literature in the accounting and management disciplines that has examined issues concerning organisational (particularly corporate) responses to the sustainability challenges facing the world at present. These studies are varied and have examined issues pertaining to organisational change (Arjali es & Mundy, 2013;Narayanan & Adams, 2017), sustainability reporting (Cho, Roberts, & Patten, 2010;Clarkson, Li, Richardson, & Vasvari, 2011), the adoption of environmental initiatives (Anton, Deltas, & Khanna, 2004;Darnall & Edwards, 2006;Darnall, Henriques, & Sadorsky, 2010;Melnyk, Sroufe, & Calantone, 2003;Potoski & Prakash, 2005) and the impact of such initiatives on environmental performance (Daddi, Magistrelli, Frey, & Iraldo, 2011;Darnall, Gallagher, Andrews, & Amaral, 2000;Darnall, Henriques, & Sadorsky, 2008;Khanna & Anton, 2002;King, Lenox, & Terlaak, 2005;Phan, Baird, & Su, 2018). This line of research adopts a pragmatic approach, and emphasises the role of academics and others in engaging with corporations to bring about improvements that may lead to more sustainable outcomes for all stakeholders (Adams & McNicholas, 2007;Adams & Whelan, 2009;Larrinaga-Gonzalez, Carrasco-Fenech, Caro-Gonzalez, Correa-Ruýz, & Paez-Sandubete, 2001). ...
Article
While there are broader socio-political, psychological, and structural factors that influence investment decisions (see Harris et al., 2016), in line with the critical approach, this study provides an empirical insight into the notion that financialization, specifically the tendency to prioritise economic over environmental objectives, has a strong bearing on how managers view investment trade-off decisions in relation to sustainability issues. The study empirically investigates this notion by examining the investment trade–off preferences of Australian managers in relation to three decision attributes – economic outcomes (i.e. financial returns), environmental impact (i.e. carbon emissions) and stakeholder pressure to consider environmental issues. We use the discrete choice experimental method to quantify the trade-offs between the above mentioned three attributes. In addition, we also investigate the potential effect of three contingency factors on individual's preferences. Specifically, at the organisational level, we explore the effects of financial and environmental rewards and at the individual level, we explore the effect of environmental consciousness. In line with the financialization hypotheses our results indicate that managers prioritise financial returns over carbon emissions and stakeholder pressures with the preference for financial returns found to be positively associated with rewards for financial performance. However, in line with the pragmatic approach and despite the overall dominance of financial returns, there is evidence that manager's focus on financial returns can be influenced, with the preference for financial returns negatively associated with rewards for environmental performance and environmental consciousness. In addition, while stakeholder pressure was not found to be associated with any of the three contingency factors and, manager's emphasis on carbon emissions was not associated with financial rewards, manager's emphasis on carbon emissions was found to be positively associated with both rewards for environmental performance and environmental consciousness. Therefore, our findings suggest that corporate management have an important role to play, both in respect to the design of performance rewards systems and the recruitment of environmentally conscious managers, in order to promote the sustainability agenda.
... First, VEPs refer to firms voluntary commitments to control pollution or conduct environmental protection activities (Blackman 2008), while the ISO 14,001 is a series of voluntary international standards, including environmental management activities standards (Bu et al. 2020;Tambunlertchai 2010;Baek 2017). Second, although there are many voluntary environmental projects, ISO 14,001 is the most widely adopted (Potoski 2010;Orecchini 2000).Third, a vast of research adopt ISO 14,001 to measure VEPs (Potoski and Prakash 2005;Lim and Prakash 2014). For example, Lim and Prakash (2014) study the impact of VEPs on innovation. ...
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... Its adoption signals to the market a firm's commitment to environmental management (Nishitani, Kaneko et al., 2012). There is empirical evidence reporting a significant association of EMS with a firm's financial performance (Potoski & Prakash, 2005) while other reports were rather conflicting (Boiral, Guillaumie et al., 2018), and some scholars did not find any effect of EMS on firm performance (Ziegler et al., 2007;Horváthová, 2010). In addition to this, Testa, Rizzi et al. (2014) provide comparative results of the financial performance of ISO certified and non-certified firms and did not find any significant difference. ...
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This study examines how board gender diversity can address the challenges to adopt environment management systems (EMS) to improve firm performance. Firstly, drawing on gender socialization and diversity theories, higher board gender diversity motivates firms to adopt EMS. Empirical evidence shows that firms with gender diverse boards are greener. Secondly, the study investigates the maxim that green pays to be green. The empirical findings highlight a positive and statistically significant but economically modest link between EMS and firm financial performance. However, the inclusion of board gender diversity as moderator significantly improves the relationship between EMS and firm performance. In addition, CEO gender is linked to better performance only in firms with low female board diversity. The findings strongly recommend higher board gender diversity as a mechanism to address the challenges of EMS and firm performance simultaneously. The findings are robust to controlling for propensity score matching technique and are different in different approaches.
... There is a legitimate need to enhance environmental management systems to improve environmental sustainability. We know from prior studies ( Melnyk et al., 2003 ;Ann et al., 2006 ;Potoski and Prakash, 2005 ;Gasbarro et al., 2013 ) that there are positive effects from EMS regulations that support the opportunity for policy makers to also support reduced environmental impacts. Now the question is which variable contributes to increased environmental pollution. ...
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In this study, we investigate complex, country-level relationships between ISO 14001 certification, re- newable energy consumption, access to electricity, agriculture, and CO 2 emissions within the South Asian Association for Regional Cooperation (SAARC) countries. These countries are important to look at they contain 20% of the world’s population, are investing in infrastructure, and are vulnerable to the impacts of CO 2 emissions. There is a gap in the literature addressing all of these countries while using novel mod- eling to try and understand dynamic relationships across countries. In this study we use multiple models to examine data covering the years 20 0 0 to 2014 starting with novel Grey Relational Analysis (GRA) mod- els to compute the weights and ranking of countries based on CO 2 emission. Next, using a Conservative (maximin) model, we check which country has the most CO 2 emission issues among all countries based on weights obtained by Second Synthetic Grey Relational Analysis (SSGRA). Finally, a Grey preference by similarity to ideal solution (G-TOPSIS) methodology prioritizes the factors that have more intensely impact CO 2 emissions. The results reveal that among all SAARC countries, India has substantial CO 2 emis- sion issues. We also find reductions in emissions from renewable energy consumption and the adoption of ISO 14001 certification in these countries. The outcomes of this study can assist organizations and policymakers in their decision-making and investments. [Citation: Ikram, M., Zhang, Q., Sroufe, R., & Shah, S. Z. A. (2020). Towards a sustainable environment: The nexus between ISO 14001, renewable energy consumption, access to electricity, agriculture and CO2 emissions in SAARC countries. Sustainable Production and Consumption, 22, 218-230.]
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Voluntary environmental management research has become a popular topic over the past two decades. This paper collects 3342 articles on research of voluntary environmental management in the Web of Science core database and uses the CitespaceV software to perform knowledge map analysis in this field. The results show: (1) in the field of corporate voluntary environmental management research, American universities are still playing a dominant role, but the number of Chinese scholars' publications has increased rapidly in recent years; (2) cluster analysis of the co-cited literature shows that sustainability reports, comparisons of voluntary environmental projects, managerial perceptions, voluntary management standards, environmental practices, industry self-regulation, environmental governance, and responsibility reporting are popular topics in the field of voluntary environmental management; (3) from the perspective of hotspot development, the early research mainly focused on industry self-regulation and environmental governance. In the early twenty-first century, the hotspots were mainly concentrated on comparisons of voluntary environmental projects, managerial perceptions, voluntary management standards, and responsibility reporting. Currently, researchers pay more attention to related environmental performance, corporate performance, the construction of comprehensive models, and the choice of environmental information disclosure methods. Topics with significance for further study include the impact mechanisms of environmental management certification on environmental performance and green innovation, the motivations of enterprise environmental information disclosure, and enriching the existing environmental management theory.
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The book studies emergence and consolidation of voluntary sustainability standards (VSS); private standards defining sustainability-related product features. The book takes stock of their success and their potential in mediating between economic and non-economic concerns of global production. Despite their private and voluntary nature, VSS generate profound consequences for the producers seeking certification, for the consumers purchasing certified products, and for others affected by their standards. VSS are used by public authorities in the EU as a functional complement to public measures regulating global value chains. At this juncture of market proliferation and public use of private regimes, this book studies how public authority can control, coordinate and review VSS. It studies how the regulation of VSS could unfold through substantive and procedural legal requirements in the domain of European Union law and World Trade Organisation law, as well as through the incentives offered by VSS employment in public measures.
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Academics and policymakers frequently discuss global governance but they treat governance as a structure or process, rarely considering who actually does the governing. This volume focuses on the agents of global governance: 'global governors'. The global policy arena is filled with a wide variety of actors such as international organizations, corporations, professional associations, and advocacy groups, all seeking to 'govern' activity surrounding their issues of concern. Who Governs the Globe? lays out a theoretical framework for understanding and investigating governors in world politics. It then applies this framework to various governors and policy arenas, including arms control, human rights, economic development, and global education. Edited by three of the world's leading international relations scholars, this is an important contribution that will be useful for courses, as well as for researchers in international studies and international organizations.
Chapter
Academics and policymakers frequently discuss global governance but they treat governance as a structure or process, rarely considering who actually does the governing. This volume focuses on the agents of global governance: 'global governors'. The global policy arena is filled with a wide variety of actors such as international organizations, corporations, professional associations, and advocacy groups, all seeking to 'govern' activity surrounding their issues of concern. Who Governs the Globe? lays out a theoretical framework for understanding and investigating governors in world politics. It then applies this framework to various governors and policy arenas, including arms control, human rights, economic development, and global education. Edited by three of the world's leading international relations scholars, this is an important contribution that will be useful for courses, as well as for researchers in international studies and international organizations.
Chapter
Academics and policymakers frequently discuss global governance but they treat governance as a structure or process, rarely considering who actually does the governing. This volume focuses on the agents of global governance: 'global governors'. The global policy arena is filled with a wide variety of actors such as international organizations, corporations, professional associations, and advocacy groups, all seeking to 'govern' activity surrounding their issues of concern. Who Governs the Globe? lays out a theoretical framework for understanding and investigating governors in world politics. It then applies this framework to various governors and policy arenas, including arms control, human rights, economic development, and global education. Edited by three of the world's leading international relations scholars, this is an important contribution that will be useful for courses, as well as for researchers in international studies and international organizations.
Chapter
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This contribution presents the findings from a two-stage systematic review. It relied on PRISMA’s methodical protocol to capture and analyze high-impact articles, that were fo-cused on the International Standards Organization’s ISO 14001 - Environment Management Systems. Whilst stage 1 shed light on the most cited publications since 1995, stage 2 nar-rowed down the search results between 2015 and 2021. The findings suggest that the use of this certifiable standard may result in operational efficiencies through better utilization of resources and waste management systems. It provides opportunities for practitioners to re-conceive their license to operate and to enhance their credentials with stakeholders. It considered potential pitfalls like high certification costs, time constraints as well as an in-crease in paperwork and red tape. Moreover, it recognizes that managers and employees may not be willing to implement changes as they may prefer the status quo or could not be knowledgeable enough to integrate the standard’s environment management systems with existing practices.
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In recent years, environmental sustainability has stimulated enterprises worldwide to not only develop green and sustainable innovations but also to move toward green and sustainable supply chain management. This study integrated the ideas of green supply chain management (GSCM) and sustainable supply chain management (SSCM) to define sustainable green supply chain management (SGSCM). Previous studies on GSCM/SSCM have contributed to research and practice, but few have explored the antecedents and consequences of GSCM/SSCM simultaneously. To address this research gap, we linked ecological modernization (EM) theory with SGSCM and sustainability performance to build a comprehensive research model. A total of 300 valid questionnaires were collected from electrical and electronics firms in Taiwan. The empirical results demonstrated that awareness of and pressure to engage in EM significantly positively affected SGSCM. Moreover, SGSCM significantly positively influenced sustainability performance (i.e. environmental, economic, and social performance). These findings should convince enterprises to actively promote SGSCM.
Chapter
This chapter analyzes the indirect effects of environmental management system (EMS) implementation and its certification and relates these to international governance in the context of new public environmental management. Building on a comprehensive quantitative dataset, it assesses the effects of ISO 14001 and EMAS (Eco-Management and Auditing Scheme) certification as well as temporal experience with EMS implementation on organizational activities outside the scope of EMS, while taking into account embeddedness and interaction effects. The analysis reveals heterogeneous effects, with limited evidence of embeddedness and interaction effects. As well, no influences of national business systems can be identified. Implications for the role of national governments in implementing sustainability strategies, even beyond environmental management, and aspects of standard flexibility in the process of governing firms to implementing such strategies in an international context are discussed.
Chapter
The organizational sustainability orientation represents the current context need to sustain the future. Hence all the organizational process must integrate a sustainable behavior—that could be fulfilled by implementing an Environmental management system (EMS). The organizational processes identification is not an automatic procedure, but an approach to interpret the company operation. The integration regarding a predefined activity set in a certain process is a choice based on phenomenon monitoring and not on the phenomenon objective existence. Likewise, to implement an EMS through a process perspective it’s very complicated because the literature is limited regarding information’s/knowledge associated with this correlation. Therefore, the main research objective is to develop/propose a theoretical framework regarding the EMS implementation seen as an organizational complex process.
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This article analyzes the contribution of certifiable environmental management standards—such as ISO 14001 and the Eco‐Management and Audit Scheme (EMAS)—to corporate environmental performance. Based on a content analysis of 414 third‐party‐verified environmental statements from EMAS‐registered Spanish organizations, which included information for around 6,700 detailed indicators, a weak improvement in environmental performance was found. Less than half of the analyzed indicators—namely, 48.27%—revealed a net improvement. Similarly, analysis of the justifications of the registered companies for the lack of improvement points to a rather symbolical adoption of the certification, intended to do only the bare minimum. These findings call into question the prevailing opinion about the positive impact of voluntary certifiable environmental management standards on environmental greening. Implications for managers and public policy makers, as well as for other stakeholders, are discussed.
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Purpose At present, the number of corporates certified by ISO14001 in China is ranked first in the world. This paper aims to explore the effectiveness of ISO14001 certification and the moderating effect of financial performance and external institutional pressures on the effectiveness. Design/methodology/approach This paper selects Shenzhen and Shanghai A-share listed companies in the heavy polluting industry from 2010 to 2017 as the research sample, and studies the impact of ISO14001 certification on corporate environmental performance and the moderating effect of financial performance and external institutional pressures. Findings This paper finds that ISO14001 certification has a positive impact on corporate environmental performance; corporate financial performance has a positive moderating effect in the relationship between ISO14001 certification and corporate environmental performance; government regulation, industry competition and media supervision also have positive moderating effects; and corporate environmental information disclosure has not yet had a positive moderating effect. Originality/value Most of the current empirical research on this topic are carried out in the context of developed countries, and lack empirical evidence from developing countries. This paper will help to make up for this deficiency. In addition, this paper will help explain why the effectiveness of ISO14001 certification generates variation in different corporates and under what conditions it will play a positive role.
Book
The literature on the ISO standards is multidisciplinary and scattered around a broad collection of journals, making it near-impossible to get an overview of what we do and do not know about Management Systems Standards. This monograph fills that gap by providing an integrated perspective on the entire body of academic literature related to ISO 9000, ISO 14000, and related standards. The aim is to provide an overview of the academic empirical literature on ISO 9000, ISO 14000 and related management systems standards to improve the quality, relevance and coherence of that literature. The authors provide an overview of the design, governance and evolution of the ISO 9000 and 14000 standards. They then offer a very short chronological overview of the evolution of research into ISO management standards. The monograph contains a section "about this monograph," which provides details about the methodology we followed, and refers to the intended audience and novelty of the work.
Chapter
This chapter suggests that MNEs’ voluntary environmental management efforts are increasingly recognized and research on MNEs’ environmental management strategies has grown over the years. Significant research has gone into the factors that affect the adoption of environmental management ‘standards’ (such as the ISO 14001, EMAS, and Responsible Care) by MNEs’ subsidiaries in a host country context. This chapter provides a review of extant literature on the determinants of MNEs’ environmental management standards adoption and sheds light on how MNEs’ subsidiaries can adopt such standards. A detailed analysis of theoretical explanations and empirical findings of existing literature is presented and summarized, identifying the institutional, market-based, non-market, and firm-level factors determining this behaviour. The chapter concludes with an argument that an MNE’s home-country institutional environment matters in the adoption of environmental management standard by its subsidiaries.
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There is broad consensus in the literature on regulatory enforcement and compliance that politics matters. However, there is little scholarly convergence on what politics is or rigorous theorization and empirical testing of how politics matters. Many enforcement and compliance studies omit political variables altogether. Among those that address political influences on regulatory outcomes, politics has been defined in myriad ways and, too often, left undefined. Even when political constructs are explicitly operationalized, the mechanisms by which they influence regulatory outcomes are thinly hypothesized or simply ignored. If politics is truly as important to enforcement and compliance outcomes as everyone in the field seems to agree, regulatory scholarship must make a more sustained and systematic effort to understand their relationship, because overlooking this connection risks missing what is actually driving regulatory outcomes. This article examines how the construct of “politics” has been conceptualized in regulatory theory and analyzes how it has been operationalized in empirical studies of regulatory enforcement and compliance outcomes. It brings together scholarship across disciplines that rarely speak but have much to say to one another on this subject in order to constitute a field around the politics of regulation. The goal is to sharpen theoretical and empirical understandings of when and how regulation works by better accounting for the role politics plays in its enforcement.
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The adoption of voluntary environmental certifications such as ISO 14001 and Eco‐Management and Audit Scheme (EMAS) has gained momentum in the last two decades. The scholarly literature has analyzed in depth the performance implications of the adoption of these certificates. Yet the findings are scattered and inconclusive. This article aims to shed light on this issue by meta‐analyzing the influence of the adoption of voluntary environmental certifications on corporate environmental performance, drawing on a sample of 53 scholarly studies analyzing a total of 182,926 companies. The findings show a positive influence of ISO 14001 and EMAS certifications on corporate environmental performance. A set of underlying moderating effects are also identified, such as a more pronounced positive effect for adoptions based on environmental innovation and for firms with a more mature certification. Implications for scholars, managers, and other stakeholders are discussed.
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A new global activism is shaming the world's top companies into enacting codes of conduct and opening their Third World factories for inspection. But before you run a victory lap in your new sweatshop-free sneakers, ask yourself: Do these voluntary arrangements truly help workers and the environment, or do they merely weaken local governments while adding more green to the corporate bottom line?
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Book
Often described as a public policy “bible,” Weimer and Vining remains the essential primer it ever was. Now in its sixth edition, Policy Analysis provides a strong conceptual foundation of the rationales for and the limitations to public policy. It offers practical advice about how to do policy analysis, but goes a bit deeper to demonstrate the application of advanced analytical techniques through the use of case studies. Updates to this edition include: A chapter dedicated to distinguishing between policy analysis, policy research, stakeholder analysis, and research about the policy process. An extensively updated chapter on policy problems as market and governmental failure that explores the popularity of Uber and its consequences. The presentation of a property rights perspective in the chapter on government supply to help show the goal tensions that arise from mixed ownership. An entirely new chapter on performing analysis from the perspective of a public agency and a particular program within the agency’s portfolio: public agency strategic analysis (PASA). A substantially rewritten chapter on cost-benefit analysis, to better prepare students to become producers and consumers of the types of cost-benefit analyses they will encounter in regulatory analysis and social policy careers. A new introductory case with a debriefing that provides advice to help students immediately begin work on their own projects. Policy Analysis: Concepts and Practices remains a comprehensive, serious, and rich introduction to policy analysis for students in public policy, public administration, and business programs.
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This article examines the emergence of local cooperative institutions-watershed partnerships-that resolve collective action problems involved in the management of natural resources. the political contracting approach to institutional supply suggests that watershed partnerships are more likely to emerge when potential benefits outweigh the transaction costs of developing a maintaining new institutions. We analyze the impact of social, political, economic, and ecological features of watersheds that affect benefits and transaction cost on the emergence of 958 watershed partnerships in the more than 2100 watershed in the United States. Our findings demonstrated that watershed partnerships are most likely to emerge in watersheds confronting severe pollution problems associated with agricultural and urban runoff, with low levels of command-and-control enforcement, and containing the resources to offset transaction costs.
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Systems of private regulation based on certification have recently emerged to address environmental issues in the forest products industry and labor issues in the apparel industry. To explain why the same regulatory form has emerged across these fields, the author uses a historical and comparative case study approach, closely examining early moments and paying attention to “roads not taken.” Two types of factors led to the initial emergence of private certification: (1) social movement campaigns targeting companies and (2) a neo-liberal institutional context. The analysis shows specific ways in which these factors led states, nongovernmental organizations, and companies to build or support certification associations.
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Preface Acknowledgments List of Figures List of Tables Part 1: Introduction to Public Policy Analysis 1. Preview: The Canadian Salmon Fishery 2. What is Policy Analysis? 3. Toward Professional Ethics Part 2: Conceptual Foundations for Problem Analysis 4. Efficiency and the Idealized Competitive Model 5. Rationales for Public Policy: Market Failures 6. Rationales for Public Policy: Other Limitations of the Competitive Framework 7. Rationales for Public Policy: Distributional and Other Goals 8. Limits to Public Intervention: Government Failures 9. Policy Problems as Market and Government Failure Part 3: Conceptual Foundations for Solution Analysis 10. Correcting Market and Government Failures: Generic Policy Instruments 11. Adoption 12. Landing on Your Feet: Organizing Your Policy Analysis 13. Implementation Part 4: Doing Policy Analysis 14. Government Supply: Drawing Organizational Boundaries 15. Gathering Information for Policy Analysis 16: Goals/Alternatives Matrices: Some Examples from CBO Studies 17: Benefit-Cost Analysis 18: When Statistics Count: Revising the Lead Standard for Gasoline Part 5: Conclusion 19: Doing Well and Doing Good
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This paper relates quality and uncertainty. The existence of goods of many grades poses interesting and important problems for the theory of markets. On the one hand, the interaction of quality differences and uncertainty may explain important institutions of the labor market. On the other hand, this paper presents a struggling attempt to give structure to the statement: “Business in under-developed countries is difficult”; in particular, a structure is given for determining the economic costs of dishonesty. Additional applications of the theory include comments on the structure of money markets, on the notion of “insurability,” on the liquidity of durables, and on brand-name goods.
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We exploit di®erences in early colonial experience to estimate the e®ect of institutions on economic performance. Our argument is that Europeans adopted very di®erent colonization policies in di®erent colonies, with di®erent associated institutions. The choice of colonization strategy was, at least in part, determined by the feasibility of whether Europeans could settle in the colony. In places where Europeans faced high mortality rates, they could not settle and they were more likely to set up worse (extractive) institutions. These early institutions persisted to the present. We document these hypotheses in the data. Exploiting di®erences in mortality rates faced by soldiers, bishops and sailors in the colonies during the 18th and 19th centuries as an instrument for current institutions, we estimate large e®ects of institutions on income per capita. Our estimates imply that a change from the worst (Zaire) to the best (US or New Zealand) institutions in our sample would be associated with a ¯ve fold increase in income per capita.
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The recent literature on evaluating manpower training programs demonstrates that alternative nonexperimental estimators of the same program produce an array of estimates of program impact. These findings have led to the call for experiments to be used to perform credible program evaluations. Missing in all of the recent pessimistic analyses of nonexperimental methods is any systematic discussion of how to choose among competing estimators. This article explores the value of simple specification tests in selecting an appropriate nonexperimental estimator. A reanalysis of the National Supported Work Demonstration data previously analyzed by proponents of social experiments reveals that a simple testing procedure eliminates the range of nonexperimental estimators at variance with the experimental estimates of program impact.
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We exploit differences in European mortality rates to estimate the effect of institutions on economic performance. Europeans adopted very different colonization policies in different colonies, with different associated institutions. In places where Europeans faced high mortality rates, they could not settle and were more likely to set up extractive institutions. These institutions persisted to the present. Exploiting differences in European mortality rates as an instrument for current institutions, we estimate large effects of institutions on income per capita. Once the effect of institutions is controlled for, countries in Africa or those closer to the equator do not have lower incomes. (JEL O11, P16, P51).
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Increasing attention to environmental management has raised many new dilemmas for firms. How can managers deal with environmental issues in a competitive situation that is international and heterogeneous? What are the strategic and financial implications of environmental management? How can they cope with regulation, considering the choices which range from compliance to voluntary initiatives? And how do other firms organise their environmental management and communicate with stakeholders? This book examines these different topics, without dogma or prescription. It demonstrates the complexity of an area in which there are often no right or easy answers. The Economics of Environmental Management: 7 shows the links between the main functional areas of a business and environmental management; 7 examines regulation and self-regulation in different countries and worldwide; 7 pays specific attention to multinational enterprises; 7 gives an international state of the art on environmental management systems and standards (especially ISO 14001 and EMAS); on environmental reporting and verification; and on environmental management accounting; 7 contains international case examples and a wealth of annotated references to paper and electronic sources.
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The article deals with the role of companies in the social market economy. An example of a successful international self-regulatory initiative and its implementation in German chemical industry is discussed.
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Provides findings from a survey of environmental management systems (EMS) auditors at ISO 14001-certified sites of Australian enterprises. Taking a legitimacy theory perspective, this study investigates the way in which enterprises with certified sites are meeting their implied social contract with stakeholders (also termed “relevant publics”) on environmental conduct. Investigates whether EMSs, and related environmental audit functions, are being treated as quality assurance tools for the betterment of environmental performance, or as impositions to be complied with so as to maintain the credential of ISO 14001 certification per se. Seeks to throw light on this legitimacy theory issue by providing evidence about management’s motivation behind, and strength of support for, the EMS auditing function at ISO 14001-certified sites. Obtains evidence about the objectives for the EMS auditing function, the resources committed to it and the perceived benefits arising from meeting the requirements for certification. Results point consistently to the conclusion that management have emphasised having enough compliance to maintain their site’s ISO 14001 certification credential.
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The first half of this book criticizes the motivational assumptions of classical economics, emphasizes the parallel disregard in practical life of social skills as compared with technical skills, and points up the disastrous social consequences of these errors. The second half reviews several studies by the Department of Industrial Research (Harvard Graduate School of Business Administration) and shows what light they throw on how these errors may be corrected. An appendix lists and describes briefly all the major studies conducted by the Department of Industrial Research (1926-1945) and includes a bibliography of publications by its members. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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Environmental Management Systems (EMSS) represent a new generation of voluntary “beyond compliance” environmental policies that neither set substantive goals nor specify final outcomes. As a result, many stakeholder groups are lukewarm toward them. Since 1993 two major supranational EMSs—ISO 14001 and the European Union's Environmental Management and Audit Scheme (EMAS)—have been introduced. Firms receive formal accreditation after their EMS has been certified by outside verifiers. This accreditation can potentially bestow monetary and nonmonetary benefits on these firms. Firm-level EMS adoption patterns in the United Kingdom, Germany, and the United States vary, thereby suggesting that national contexts influence firms' responses to them. In Germany and the U.K. a significant number of sites have become either ISO 14001 or EMAS certified, while the take-up of ISO 14001 in the U.S. (EMAS is available only to European sites) has been less enthusiastic. This article begins with the hypothesis that firms in countries with adversarial economies— where regulators and business are on less than friendly terms—are less likely to adopt EMS-based programs. This hypothesis explains why ISO 14001 take-up has been relatively high in the U.K. and relatively low in the U.S. However, it cannot explain (1) the high rate of take-up of both ISO 14001 and EMAS in Germany, where the stringency of environmental legislation has been a contentious issue between the government and industry and (2) why EMAS has been more popular in Germany than in the U.K. This article argues that the original hypothesis, while largely correct, is underspecified. To better explain the cross-national differences in EMS adoption, one must take into account the type of adversarial economy (adversarial legalism versus prescriptive interventionism) and the nature of the policy regime (procedural versus substantive).
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Across Europe, there is considerable interest in establishing stronger links between environmental regulation and standards for environmental management systems (EMSs) such as ISO 14001. If it can be demonstrated that possession of an EMS results in improved environmental or regulatory performance, then there is a case for granting ‘regulatory relief’ in the form of, for example, reduced inspection frequencies. This paper describes the analysis of information on almost 800 sites regulated under the UK's Integrated Pollution Control regime. It demonstrates that having an EMS improves certain procedural aspects of environmental management but does not appear to reduce the likelihood of breaching permit conditions. Interviews with certification bodies revealed the factors, such as differentiation of services in the market for certification, that underlie this finding. It is concluded that some limited recognition of EMS in regulation is warranted, because there is overlap between some regulatory and certification procedures, and because having an EMS facilitates the supply of information necessary for regulation. The broader implications for regulated industry, certification bodies, regulators and wider environmental policymaking are considered. Copyright © 2003 John Wiley & Sons, Ltd and ERP Environment.
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This paper analyzes the effect of participation in the Department of Energy's Climate Challenge Program on CO2 emission reduction activity of the largest 50 electric utilities east of the Rocky Mountains from 1995 to 1997. Based primarily on regulatory influence theory of voluntary behavior developed by Lyon & Maxwell (1999), a twostage model was developed and tested in which the first stage predicts voluntarism and the second stage uses the predicted values to test how voluntarism contributes to pollution reduction. Findings show a moderate level of support for regulatory influence theory with firms more likely to volunteer if they were located in states characterized by higher levels of environmentalism and if they were subject to higher levels of direct federal and state regulation. Findings also support previous empirical evidence that larger firms are more likely to adopt voluntarism, while larger, high-polluting utilities voluntarily committed to reduce greater quantities of CO2. Nevertheless, adoption of the program seems to have no effect on reduction levels and those firms predicted to volunteer higher reduction levels were found to reduce CO2 emmissions less. It is hypothesized that the ineffectiveness of the Climate Challenge Program, compared with other voluntary programs, such as the 33/50 Program, may be due to the general weakness of the CO2 regulatory regime in the United States. © 2000 by the Association for Public Policy Analysis and Management.
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Compared to other economically advanced democracies, the United States is uniquely prone to adversarial, legalistic modes of policy formulation and implementation, shaped by the prospect of judicial review. While adversarial legalism facilitates the expression of justice-claims and challenges to official dogma, its costs are often neglected or minimized. A survey of existing research, together with a case study of environmental regulation in the Port of Oakland, indicates the extent to which adversarial legalism causes (or threatens) enormous dispute-resolving costs and procedural delays, which in turn distort policy outcomes. Adversarial legalism, moreover, has increased in recent decades, as Americans have attempted to implement the ambitious, socially transformative policies of activist government through political structures, forms of legislation, and legal procedures that reflect deep suspicion of governmental authority.
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The corporate approach to environmental protection has been evolving from a regulation-driven reactive mode to a more proactive approach involving voluntarily adopted management systems that integrate environmental concerns with traditional managerial functions. Several hypotheses about the factors explaining the diversity in the environmental management systems adopted by firms are tested using survey data for a sample of S&P 500 firms. The analysis shows that the threat of environmental liabilities, high costs of compliance, market pressures, and public pressures on firms with high on-site toxic emissions per unit output create incentives for adopting a more comprehensive environmental management system.
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Proponents of federal environmental standards argue that competition for industrial development creates a “race to the bottom” in which states relax their own environmental standards to avoid losing businesses to states with more “business-friendly” regulations. This article presents results from a unique survey of state clean air programs that show—contrary to the race to the bottom—a substantial number of states exceed federal EPA standards in a broad variety of clean air programs. Multivariate analyses of these state policies indicate that states strengthen their environmental programs in response to citizen demands rather than weaken their programs in deference to economic pressures.
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Green marketing subsumes greening products as well as greening firms. In addition to manipulating the 4Ps (product, price, place and promotion) of the traditional marketing mix, it requires a careful understanding of public policy processes. This paper focuses primarily on promoting products by employing claims about their environmental attributes or about firms that manufacture and/or sell them. Secondarily, it focuses on product and pricing issues. Drawing on multiple literatures, it examines issues such as what needs to be greened (products, systems or processes), why consumers purchase/do not purchase green products and how firms should think about information disclosure strategies on environmental claims. Copyright © 2002 John Wiley & Sons, Ltd and ERP Environment.