Input, Output, and Environmental Management Productivity: Effects on Firm Performance

Abstract

Firms invest considerable resources to control any of their operations that may have environmental impacts in an attempt to reduce such impacts but also generate economic value. Various studies of the basic creation or destruction of monetary value through environmental performance offer contradictory evidence. Therefore, the present study proposes a new definition of environmental management as the transformation of inputs (resources assigned) into outputs (valuable results). Both inputs and outputs should be taken into account to explain financial outcomes; further consideration should also include a third aspect, namely, ‘environmental management productivity’, which describes the relationship between the outputs and inputs of environmental management. Empirical analyses of Spanish firms with a certified environmental management system subject to the European Union's CO2 emissions trading system provide evidence that all three aspects must be considered in combination to achieve a more comprehensive view of the impact of environmental management on financial performance. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment

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

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

Which green matters for whom? Greening and firm performance across age and size distribution of firms

“…In this context, Busch and Hoffmann (2011) suggest that both inputs and outputs relate to firms profits while Lannelongue et al (2015) examine the impact of both green inputs and green outputs on firm performance. Their results suggest that green inputs, as well as green outputs, impact the financial performance of firms.…”

“…Firstly, building on the input-output framework (Busch and Hoffmann 2011;Lannelongue et al 2015), it presents a novel greening framework for contextualising greening by firms. Secondly, it provides the first insights into how different types of greening impact firm performance along the size and age distribution of firms.…”

The influence of carbon cost pass through on the link between carbon emission and corporate financial performance in the context of the European Union Emission Trading Scheme

“…The environmental economics literature generally suggests that lower corporate carbon pollution, and thus better carbon emission performance (EP), positively affects firms' economic performance. Moreover, these studies show that the emission‐financial performance relationship depends on carbon intensity (Matsumura, Prakash, & Vera‐Muñoz, ; Wang, Li, & Gao, ), carbon emission mitigation strategies (Lannelongue, Gonzalez‐Benito, & Gonzalez‐Benito, ; Misani, Pogutz, & Russo, ) and the market discipline imposed by investors (Nishitani & Kokubu, ). None of these studies, however, examine how the emission‐financial performance link can be influenced by the (in) ability to pass through environmental costs due to industry specific or firm level characteristics.…”