CSR Research: Environmental Sustainability

In one of his recent quarterly letters, Jeremy Grantham, co-founder and chief investment strategist of the global investment management firm GMO, looks at the markets and the planet and offers both warning and encouragement for the future. Grantham warns a “desperate focus on growth” will lead to depletion and a global crash, but suggests the brain power exists to achieve planetary sustainability.

In an International Journal of Management and Marketing Research article researchers offer a five-country cross-cultural analysis of attitudes and action concerning the environment that shows Americans lag behind consumers in developing markets who are more receptive to early adoption of green products and services.

Researchers reviewed empirical evidence of improvement in both environmental and economic, or financial, performance of companies, analyzing the mechanisms involved in potential revenue increase or cost reduction resulting from better environmental practices.

This study examines whether environmental management systems (EMS) and related managerial activities to reduce negative environmental impacts have a positive influence on innovation by firms. It finds that the learning process that takes place during an EMS implementation may yield opportunities for market differentiation and cost-savings related to innovative approaches to environmental sustainability.

Researchers examined whether independent environmental performance ratings of firms lead to improved practices and performance. The results show that companies with poor environmental ratings and those within highly regulated industries are more likely to improve when rated on their performance.

Researchers find that by putting voluntary environmental standards in place, employee training and employee networks improve, and labor productivity improves by 16 percent.

Researchers looked at whether companies that were ISO 14001 certified were more likely to monitor and require higher environmental performance of their suppliers as well, and found support for green supply chain management.

Employees should utilize inspirational appeals, rational persuasion, and consultation when trying to build buy-in within their organization during the development of environmental projects. The study found that inspirational appeals are positively related to gaining the commitment of others.

This research looked at manufacturers and whether or not they had adopted ISO 14000. It was demonstrated that those who were certified in ISO 14000 had improved profitability from implementing cost-saving techniques.

This study looked at environmental regulation and the role of voluntary programs. Research found that voluntary commitments have little effect on emission reductions, while the threat of regulation does result in significant emission reductions.

Companies are more likely to modify existing sustainability products and processes than create new ones; however, these activities result in a greater financial gain, though they may potentially involve more risk and costs to implement.

Researchers examined the link between executive pay and environmental performance in polluting industries and found that CEOs leading firms with good environmental performance received higher pay. This is particularly the case when CEOs lead pollution prevention strategies, as opposed to end-of-pipe pollution control.