Understanding the influence of environmental production practices on firm performance: a proactive versus reactive approach

Abstract

PurposeExploring ways to sustain competitive positions as well as improve firm performance through environmental production initiatives has been a major preoccupying topic for mostly practitioners and researchers. Despite several studies on the influence of environmental initiatives on firm performance, many questions remain unanswered as to how to further extract more gains from environmental production initiatives. This study, thus, explores environmental production practices impact on firm performance from proactive and reactive perspectives.Design/methodology/approachThe study adopted a survey research design, a quantitative approach and partial least square structural equation modelling (PLS-SEM) technique in making data analysis and interpretations due to its suitability for predictive research models.FindingsThe results indicated that proactive environmental production practices positively related with process and environmental performances but negatively associated with financial performance. Although the findings contrast with majority of past findings, they gain the support of other scholars in establishing that early adoption stages of proactive environmental production initiatives strain financial capabilities and thus present a negative relationship. Reactive environmental production practices are positively and significantly related with process, environmental and financial performances.Originality/valueThe study is among the first to expose environmental production practices from a proactive and a reactive perspective and in the context of a developing country. As such, the study provides guidance to relevant authorities in further promoting sustainable production practices to preserve the environment by manufacturing safer consumer products through efficient sustainable production processes and practices.

Examining the Interconnections Between Sustainable Logistics Practices, Environmental Reputation and Financial Performance: A Mediation Approach

“…The growing demand for sustainable business practices that lead to a protected and preserved environment have motivated the wide adoption of environmental or green practices in both developed and developing countries. Specifically, the main question that diverse scholars seem to be interested in is ‘what motivates the adoption of sustainable practices?’ (Baah et al, 2020; Tsinopoulos et al, 2018). To respond to this question, the institutional theory has gained attention over the past decade, especially in relation to institutional isomorphism and organizational legitimacy.…”

“…Logistics practices over the years have come under scrutiny mainly due to their enormous impact on the environment. These impacts significantly affect the environment as well as human existence, thereby making environmental awareness creation very vital to economic growth and reform (Baah et al, 2020). Logistics companies perform functions such as reverse logistics, packaging, inventory management, transportation, warehousing, waste management, distribution, etc., and as such contribute enormously to economic growth.…”

“…These figures are expected to increase, and therefore, the many negative environmental impacts associated with logistics practices such as air pollution, greenhouse effect, resource and energy issues and ozone layer depletion, among others, have strengthened the scrutiny of logistics practices by various stakeholder groups (Baah & Jin, 2019). These scrutinies and pressures from stakeholders have to a larger extent motivated both logistics and manufacturing firms to adopt practices that are considered sustainable and ensure cleaner production practices (Baah et al, 2020; Chhabra et al, 2017; Gupta et al, 2018).…”

“…Importantly, sustainability needs to be understood as well as integrated in business operations because as international trade continues to increase, there is the need to assess the environmental aspects of transport and logistics, seeing that goods are and will continue to be moved over greater distances. According to Baah et al (2020) and Agyabeng-Mensah et al (2020), several studies have focused on the manufacturing sector, leaving out the logistics sector. This study is based on the rising nature of logistics activities and operations and focuses on the logistics sector in an effort to provide awareness and empirical evidence on sustainable logistics practices.…”

“…In addition, the introduction of sustainable standards such as ISO 14001 in 1996 have promoted the formulation of corporate sustainability strategies that seek to preserve the environment (Fernando, 2017). Such standards coupled with other legislations from regulatory bodies have coerced companies to comply with environmental standards if they expect to operate smoothly without legal sanctions from diverse stakeholders (Baah et al, 2020).…”