A Model of the Global and Institutional Antecedents of High-Level Corporate Environmental Performance

Abstract

Stories of firms that exceed local compliance requirements in their environmental performance appear routinely. However, we have limited theoretical explanations of what propels these firms to exceed compliance. Our theory suggests that global competitive and institutional pressures lead multinational firms to develop highlevel, environmental management systems (EMS) that make them more competitive. For economic and other reasons, select firms make the choice to rationalize their collective environmental performance to the highest common denominator rather than the lowest. Regulations around the world differ widely and are a moving target in many settings. The need to comply with such myriad, shifting rules leads to firms creating EMS to help stay ahead of regulations worldwide. Using institutional and internationalization theories as our basis, we offer a propositional model concerning global competitive/institutional pressures and their effects on corporate environmental performance. We conclude the paper with a discussion of the implications of the model.

The influence of firm, industry and network on the corporate social performance of Japanese firms

“…Along these lines, a recent line of research based on institutional theory (DiMaggio & Powell, 1983) suggests that the ecological environmental policies of firms are in large part constructed by the influences of their industry business environments (Hoffman, 1997;Sharfman, Shaft, & Tihanyi, 2004;Sharma, 2000). Thus, we reason that the influence of industry-level factors on CSP stem not only from exceptional occurrences such as high-profile scandals, but also from more mundane market, institutional and environmental forces that shape the industrial context.…”

Multinational enterprises and the Sustainable Development Goals: An institutional approach to corporate engagement

“…And similar to regulative institutions, normative institutions that relate to professional or industrial societies, and the norms and values at the cultural-cognitive level, differ across countries (Husted & Allen, 2006;Jamali & Neville, 2011). Internationalisation therefore increases the number and diversity of stakeholder pressures on the firm (Brammer, Pavelin, & Porter, 2006;Sharfman, Shaft, & Tihanyi, 2004), which can be argued to both positively and negatively affect corporate responsiveness (e.g. Kolk & Fortanier, 2013).…”

Effect of R&D Collaboration with Research Organizations on Innovation: The Mediation Effect of Environmental Performance

“…Previous studies have identified several drivers that motivate firms to meet or exceed compliance requirements in their environmental performance, which includes both internal capabilities and external opportunities and constraints [2,4,10]. The resource-based view suggests that internal resources classified as tangible, intangible, and personnel-based enable firms to implement environmental strategies and policies [10,19].…”

“…As internal routines are established using accumulated tacit knowledge regarding environmental management, firm's environmental performance is likely to improve. In the case of multinational firms, the need to comply with varying environmental regulations worldwide often results in the establishment of environmental management systems [2]. Through such systems, multinational firms standardize their compliance procedures and seek to exceed the minimum environmental regulation standards of the countries that have the most stringent ones.…”

“…In recent years, there has been a growing interest in improving firms' environmental performance by meeting or exceeding environmental regulations [1][2][3]. The notion of environmental performance refers to the extent to which corporate strategies, policies, and operations are geared toward protecting the natural environment and promoting sustainable development [4].…”