The Impact of a Spill or Pollution Accident on Firm Environmental Activity: An Empirical Investigation

Abstract

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 3 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.

Learning from Neighbors: The Spatial Spillover Effect of Crisis Learning on Local Government

“…Reducing workplace accidents is crucial for overall sustainability, especially major accidents that are not conducive to a safe and healthy working environment, and they can stymie local governments' sustainable development [1]. For example, accidents can have a negative impact on environmental sustainability, such as spills and pollution accidents causing significant damage to the natural environment [2,3], and lead to energy sustainability and security issues [4]. The important relationship between accident prevention and sustainable development can also be seen in the 2030 Sustainable Development Goals (SDGs); Sub-Target 3.9, for example, aims to " .…”

O desempenho de gestão ambiental e as fronteiras planetárias no setor de óleo e gás

“…No entanto, a quantidade de práticas de gestão ambiental adotadas por uma empresa determina seu desempenho. Dado que as empresas diferem nos motivos e em como avaliam os custos e benefícios da adoção das práticas de gestão ambiental (Hardcopf et al, 2021;Khanna & Speir, 2013), o provável desempenho positivo torna-se incerto para elas (Lucas & Noordewier, 2016). Ainda, devido ao fato de as empresas se situarem em diferentes contextos setoriais, a incerteza trona-se ainda mais significativa (Lucas & Noordewier, 2016).…”

“…Dentre essas, destaca-se a forma com essas empresas gerem seus stakeholders, seu planejamento para melhoria de eficiência interna, seu posicionamento ambiental, seus objetivos estratégicos e competitivos, gerenciamento de imagem, e legitimidade junto aos seus stakeholders (Khanna & Speir, 2013). "Independentemente do motivo da adoção, a adoção das práticas de gestão ambiental geralmente envolve compromissos potencialmente significativos de trabalho e capital" (Hardcopf et al, 2021(Hardcopf et al, , p. 2470.…”

“…Nath e Ramanathan, 2016), nem os compromissos potencialmente significativos de trabalho e capital (Hardcopf et al, 2021)…”

“…A primeira limitação desse estudo diz respeito ao uso de dados secundários para as análises. Por mais que o banco de dados da ASSET4 ESG tenha sido amplamente utilizado em estudos prévios (Trumpp et al, 2015;Escrig-Olmedo et al, 2017;Ziegler et al, 2011;Semenova, 2010;Hartmann & Uhlenbruck, 2015;Hardcopf et al, 2021;Aouadi & Marsat, 2018;Garcia & Orsato, 2020;Sassen et al, 2016;Cheng et al, 2014;Garcia et al, 2017), o presente estudo está sujeito a qualidade e confiabilidade dos dados. A segunda limitação, diz respeito às 68 empresas que compõem a amostra de dados utilizada para análise.…”