Corporate environmental performance, environmental management and firm risk
Corporate environmental performance, environmental management and firm risk
Using a sample of 1,632 U.K. firm-year observations from 2002 to 2013, this paper investigates the impact of multidimensional corporate environmental performance (CEP) on firm risk. Considering two dimensions of CEP, namely environmental management performance (EMP) and environmental operational performance (EOP), we find that EMP serves as an effective mechanism in reducing firm risk, and such an effect is mainly driven by the manufacturing sector. Meanwhile, there is no clear association between EOP and firm risk. However, our findings highlight a moderating effect of EOP on the relationship between negative EMP and firm risk. This provides new insights into the value of multidimensional CEP and suggests that the complex relationship between outcome- and process-based environmental performance is important for understanding the real effects of CEP on firm risk. Our results have important implications for managerial decision-making in strategy and risk management, as well as for policymaking in environmental regulation.
carbon performance, corporate environmental performance, environmental management performance, environmental policy, idiosyncratic risk, multidimensional construct
1074-1096
Xue, Bai
975f8125-7cf4-42b2-87fe-e5cb5a4da2e1
Li, Pingli
a7bf0454-129f-46fa-bdf3-5bd940f569c4
Zhang, Zhuang
df7b9fa8-04fd-4085-b74d-c9c1506b974e
1 March 2020
Xue, Bai
975f8125-7cf4-42b2-87fe-e5cb5a4da2e1
Li, Pingli
a7bf0454-129f-46fa-bdf3-5bd940f569c4
Zhang, Zhuang
df7b9fa8-04fd-4085-b74d-c9c1506b974e
Xue, Bai, Li, Pingli and Zhang, Zhuang
(2020)
Corporate environmental performance, environmental management and firm risk.
Business Strategy and the Environment, 29 (3), .
(doi:10.1002/bse.2418).
Abstract
Using a sample of 1,632 U.K. firm-year observations from 2002 to 2013, this paper investigates the impact of multidimensional corporate environmental performance (CEP) on firm risk. Considering two dimensions of CEP, namely environmental management performance (EMP) and environmental operational performance (EOP), we find that EMP serves as an effective mechanism in reducing firm risk, and such an effect is mainly driven by the manufacturing sector. Meanwhile, there is no clear association between EOP and firm risk. However, our findings highlight a moderating effect of EOP on the relationship between negative EMP and firm risk. This provides new insights into the value of multidimensional CEP and suggests that the complex relationship between outcome- and process-based environmental performance is important for understanding the real effects of CEP on firm risk. Our results have important implications for managerial decision-making in strategy and risk management, as well as for policymaking in environmental regulation.
Text
Corporate environmental performance, environmental management and firm risk
- Accepted Manuscript
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Accepted/In Press date: 31 October 2019
e-pub ahead of print date: 17 December 2019
Published date: 1 March 2020
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Publisher Copyright:
© 2019 John Wiley & Sons, Ltd and ERP Environment
Keywords:
carbon performance, corporate environmental performance, environmental management performance, environmental policy, idiosyncratic risk, multidimensional construct
Identifiers
Local EPrints ID: 436789
URI: http://eprints.soton.ac.uk/id/eprint/436789
ISSN: 0964-4733
PURE UUID: 1784bfe9-c679-4369-b5d5-e490015cb23f
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Date deposited: 09 Jan 2020 17:30
Last modified: 06 Jun 2024 04:07
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Author:
Bai Xue
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