Showing papers in "Business Strategy and The Environment in 2020"

Designing business models in circular economy: A systematic literature review and research agenda

Abstract: The concept of circular economy is increasingly receiving attention in different domains, including strategic management, operations management, and technology management. It requires companies to design their business model (i.e., the value network, the relationships with the supply chain partners, and the value propositions towards customers) around a new concept of sustainable development that reduces consumption of natural resources and preserves the environment. However, extant research falls short in terms of explaining how companies design their business model according to the circular economy principles. Starting from this premise, the present paper provides a systematic review of the literature on the design of business models in the context of circular economy, aiming to offer an overview of the state of research and outline a promising research agenda.

Does corporate environmental responsibility engagement affect firm value? The mediating role of corporate innovation

Abstract: This paper aims to construct a comprehensive corporate environmental responsibility (CER) engagement measurement to examine the relationship between CER engagement and firm value as well as explore the mediating effect of corporate innovation on this relationship based on a sample of 496 China's A‐share listed companies from 2008 to 2016. The results show that when firms start to adopt environmental regulations, CER would have a negative effect on firm value; however, at a specific level, CER would start to enhance firm value positively. In addition to this, corporate innovation plays a mediating role in the relationship between CER and firm value. Corporate innovation promotes firm value of firms with CER more than firms without CER. Overall, the findings of this paper are extremely relevant for the government, investors, and firm's managers and can be utilized for policy and investment decision making. Also, the findings encourage firms to enhance their sense of environmental responsibility in order to enhance their competitive advantages, enhance corporate innovation capabilities, and thus enhance firm value.

Pathways towards sustainability in manufacturing organizations: Empirical evidence on the role of green human resource management

Abstract: Green human resource management (HRM) practices can help organizations align their business strategies with the environment. Anchored in the resource-based view of the firm, this study examines the influence of green HRM practices on sustainability using cross-sectional data obtained from 112 large manufacturing firms in Malaysia. The results show that green recruitment and green training have positive effects on sustainability. However, green analysis and job description, green selection, green performance assessment, and green reward were not found to have any significant influence on sustainability. The model presented in this paper offers useful insights into the positive role of green HRM in the sustainability of manufacturing firms, and as previous studies exploring the link between green HRM and sustainability using empirical data from Malaysian manufacturing firms are scarce, this research is of significant importance for scholars and practitioners. The scope of this study focuses on emerging economies with a limited number of variables that are contextual and specific to the Malaysian economy. Future research could explore the relationship between green HRM and other variables that may contribute to the present framework in other contexts. Future studies may also consider each dimension of green HRM, or indeed other elements of green HRM, in relation to the different aspects of sustainability. © 2019 John Wiley & Sons, Ltd and ERP Environment

Circular economy business models: the state of research and avenues ahead

Abstract: This study investigates how the circular economy and business models are related in the current business and management literature Based on bibliometric analytical procedures, 253 articles were retrieved from the Scopus, Web of Science, and ScienceDirect scientific databases The articles were analyzed according to network analysis principles, and key terms were mapped into a network We used VOSviewer to build the network, explore the most‐researched terms and their relationships, and identify less‐explored terms and research gaps We furthermore conducted a qualitative review of selected publications to provide an illustration of quantitative results and delve deeper into the research topics The main findings revealed the networks of current topics as they appear in the publications such as business models, the circular economy, circular business models, value, supply chain, transition, resource, waste, and reuse, and their most prevalent relationships The results also highlighted several emerging topics such as those connected with managerial, supply‐side, demand‐side, networking, performance, and contextual considerations of circular business models

Environmental Regulation and Enterprise Innovation: A Review

Abstract: The impact of environmental regulation on enterprise innovation is closely related to the competitiveness of the enterprise and sustainable development of the regional economy, but existing research does not provide a consistent view. This paper summarizes the impacts of environmental regulation on enterprise innovation from the perspectives of technological innovation, product innovation, system innovation and ecological innovation. We find that the impacts of environmental regulation on enterprise innovation behaviour are complex, and that the impacts can be reflected together by the four aspects above and even by their interaction. Moreover, the impacts are not limited to the creation of new technologies, products, and systems but also include their adoption and application. In particular, whether the Porter hypothesis is true and which versions of the Porter hypothesis environmental regulation causes in enterprise innovation depend on enterprise characteristics, means of environmental regulation, and enterprises' strategic behaviours in an enterprise ecosystem. Finally, we propose five potential research directions: quantifying the degree of enterprise innovation caused by environmental regulation, the impacts of environmental regulation on sustainable economic development from an enterprise ecosystem perspective, the impacts of enterprise innovation on environmental regulation, the role of enterprise initiative in the relationship between environmental regulation and enterprise innovation, and social security issues and the integration of eliminated enterprises resulting from environmental regulation.

Green innovation to respond to environmental regulation: How external knowledge adoption and green absorptive capacity matter?

Abstract: Although environmental regulations have been considered as important forces of conducting green innovation, how and under what conditions they affect green innovation are still unclear. Drawing from institutional theory, this study used survey data from 237 manufacturing firms in China to investigate how two dimensions of environmental regulations (i.e., command and control regulation and market‐based regulation) affect green product innovation and green process innovation. Further, this article examined the mediating role of external knowledge adoption and the moderating role of green absorptive capacity. Our results indicate that both command and control regulation and market‐based regulation have positive influences on external knowledge adoption. External knowledge adoption fully mediates these positive relationships. In addition, green absorptive capacity only strengthens the positive impact of market‐based regulation on external knowledge adoption. Our study contributes to institutional theory and green innovation literature.

Circular economy to enhance sustainability of small and medium‐sized enterprises

Abstract: The circular economy (CE) represents a major paradigm shift of moving from the concepts of linear to circular supply chains across multiple industries. Although some aspects of CE adoption within industrial supply chains have been researched extensively (particularly addressing challenges of design, implementation, and operations), the research that relates CE practices with sustainability performance to reveal the current state of CE practices within small and medium‐sized enterprises (SMEs) is scant. The aim of this research was to facilitate SMEs to achieve greater sustainability through CE implementation. This research addresses three research questions—How are CE fields of action related to sustainability performance? What are the issues, challenges, and opportunities of adopting CE in SMEs? And what key strategies, resources, and competences facilitate effective implementation of CE in SMEs? This study adopts a mixed method approach (qualitative and quantitative) using survey research, focus group, and case studies; 130 randomly selected SMEs within the Midlands of the United Kingdom have been surveyed, and the responses are analysed using statistical tools along with findings from focus groups and case studies. The study reveals that all CE fields of action (take, make, distribute, use, and recover) of SMEs are correlated to economic performance, but only make and use are related to environmental and social performance. The study further derives strategies, resources, and competences for achieving sustainability across all the CE field of actions. Additionally, this research reveals the issues and challenges, strategies, resources, and competences required for implementing CE in SMEs.

Sustainable development goals and the strategic role of business: A systematic literature review

Abstract: The United Nations' Sustainable Development Goals (SDGs) are an urgent call for action by all countries that provide a global framework for achieving global development while balancing social, economic, and environmental sustainability SDGs are addressed to all actors in society, but both academia and professional recognize the particular importance of businesses However, research is still needed to understand the role of companies as sustainable development agents Relying on Scopus database consultation, the current research adopts an interdisciplinary systematic literature review to investigate, analyze, and present state‐of‐the‐art academic literature on the role of businesses in tackling SDGs The final sample comprises 101 papers published between 2015 and 2020 It provides evidence that the main topics discussed by scholars are related to aspects of strategy execution Recognizing different streams that are currently unexplored—despite strictly related to strategic business activities and to the sustainable development as a whole—the study provides many insights for future research on business and SDGs

Sustainable entrepreneurship, innovation, and business models: Integrative framework and propositions for future research

Abstract: This article introduces the business models for sustainability innovation (BMfSI) framework to study how business models mediate between sustainability innovations and business cases for sustainability. The BMfSI framework integrates two major perspectives (implicitly) found in the sustainable business model literature. The first is the agency perspective. It takes into consideration that some form of agency is needed, that is, “someone” who takes decisions and acts. Sustainable entrepreneurs are discussed as those agents who align their new or existing business models with sustainability innovations in order to be successful in business and to create value with and for stakeholders. The second perspective is the systems perspective, which acknowledges that business models are always embedded within sociotechnical contexts through which, for example, public policies, private financing, or stakeholder interests influence whether and how business models can be developed. The agency and systems perspectives are integrated in the so‐called business model mediation space. This theoretical notion embraces the decisions and activities pursued by sustainable entrepreneurs as they align their business models with sustainability innovations on the one hand and the influence of environmental contingencies, barriers, and stakeholders from the sociotechnical context on the other hand. The paper concludes with propositions for future research derived from the BMfSI framework.

Critical success factors for a circular economy : Implications for business strategy and the environment

Abstract: Eco-efficiency and resource optimization for business strategy and the environment can be achieved by the circular economy (CE) practices in supply chains (SCs). The leather industry is a significant industrial contributor to the economic growth of some countries, but at the same time, it leads to tremendous environmental pollution. This research focuses on the identification and evaluation of critical success factors (CSFs) needed in the business strategy development of CE practices as well as to minimize environmental pollution in leather industry SCs. The CSFs are identified via a comprehensive literature review and are validated by experts' opinions. The validated CSFs are further analyzed using the best–worst method (BWM) and the decision-making trial and evaluation laboratory (DEMATEL). The BWM is used to identify the weights of the CSFs, and DEMATEL is used to determine the cause–effect relationship between the CSFs. The findings show that “leadership and top management commitment” is the most important CSF. Six CSFs are classified as causal towards CE practices: “leadership and top management commitment,” “strong legislation towards CE practices,” “ecological scarcity of resources,” “knowledge of CE practices,” “funding support for R&D from the government,” and “competitor pressure on CE practices.” The findings of this study can help managers in the leather industry implement CE practices in their existing SCs to minimize waste.

Microfoundations of dynamic capabilities: Insights from circular economy business cases

Abstract: Circular economy is a key strategy to achieve corporate sustainability. However, so far, most firms are unable to translate the concept of circular economy into their corporate strategies, business models, and operations. Some scholars have argued that firms need to develop new (and dynamic) capabilities for circular economy implementation. Yet there is a little discussion on how firms can develop such capabilities. Notably, there is a paucity of research on specific skills, processes, and organizational activities (microfoundations of dynamic capabilities) that may facilitate circular economy implementation. To address this knowledge gap, using a multiple‐case studies approach, we explore microfoundations of dynamic capabilities in successful circular economy business cases. Our findings indicate that dynamic capabilities positively contribute to circular economy implementation. Our case studies show that case firms identified circular economy opportunities by using four microfoundations of sensing capability. Further, case firms acted on the identified opportunities by using simultaneously three microfoundations of seizing capability and four microfoundations of reconfiguring capability. This paper contributes to the literature on the relations between dynamic capabilities and corporate sustainability by providing insights on how sensing, seizing, and reconfiguring dynamic capabilities act in successful operationalization of circular economy strategies.

Sustainability and financial performance of small and medium sized enterprises: A bibliometric and systematic literature review

Abstract: Based on a 20-year dataset collected from the Web of Science database, this study aims to present a comprehensive knowledge map of the intellectual structure of the field of study of sustainability and financial performances in SMEs. A bibliometric analysis and systematic literature review method was employed by analyzing articles published between 1999 and 2018, using the VOSViewer software. The analyses provide an overview of articles, authors, the most influential journals, and themes of research. The results reveal the existence of three themes in research: the role of innovation and entrepreneurship their impact on sustainability in SMEs (cluster 1); CSR in the context of SMEs (cluster 2); and, green management and environmental issues for SMEs (cluster 3). In sum, this paper discusses prominent insights from the research analyses and recommends future research directions for the field.

The impact of sustainability (environmental, social, and governance) disclosure and board diversity on firm value: The moderating role of industry sensitivity

Abstract: Using a large panel data set comprising 812 listed European firms, this study investigates whether sustainability disclosure environmental, social, and governance) and female representation on boards affect firm value. We observe a positive impact of sustainability disclosure and board gender diversity on firm value, suggesting that the best management practices, enhanced takeholder trust, and female representation on boards improve firm value. We observe that the firms in sensitive industries achieve superior social and governance performance. We also observe that the firms with higher female representation on their boards present significantly superior environmental, social, and governance performance. Our results are robust to different firm and country specific control variables and to year- and country-fixed effects.

A systematic literature review of socially responsible investment and environmental social governance metrics

Abstract: Socially responsible investment (SRI) encompasses both ethical and financial paradigms. This systematic literature review explores three key research themes within the SRI literature, identifying a significant disconnect between themes and a fixation on the financial (as opposed to ethical) paradigm. One of the foundations of SRI is environmental, social, and governance (ESG) metrics. This review confirms the importance of ESG metrics in the SRI field, as they play two crucial roles, namely, as a proxy for sustainability performance and an enabler of the SRI market. However, there are two main issues related to ESG metrics that undermine their reliability: a lack of transparency and a lack of convergence.

How circular is the circular economy? Analysing the implementation of circular economy in organisations

Abstract: Circular Economy (CE) has become one of the most recent ways to address environmental sustainability. CE activities focus exclusively on one of three levels (macro-level, meso-level, and micro-leve ...

Theory of green purchase behavior (TGPB): A new theory for sustainable consumption of green hotel and green restaurant products

Abstract: Fostering customer green purchase behavior is a fundamental constituent of an eco‐friendly hospitality firms' success. The present study developed a theory of green purchase behavior (TGPB) that clearly and sufficiently explains customer environmentally responsible buying behavior for green hospitality products, such as green hotels and green restaurants. Mixed methods based on a psychometric approach were used for the development of the theory. Within the theory, attitude, ascribed responsibility, and social norm directly activate the personal norm. These types of activators form based on awareness of consequences, image, ecological worldview, and environmental value. In addition, past behavior increases behavior. This theorization is fully supported and demonstrated through both qualitative and quantitative processes. Green purchase behavior was satisfactorily accounted for by the proposed theory. The TGPB included a stronger prediction power than the existing pro‐social theories, and it is applicable to diverse hospitality/tourism/consumer behavior contexts.

Barriers to the circular economy in European small and medium-sized firms

Abstract: The concept of the circular economy (CE) is currently gaining impetus as a way to move towards sustainable, low‐carbon, resource‐efficient, and competitive economies. However, despite the potential benefits of CE activities, their implementation remains relatively rare. We use a cross‐sectional survey of European small and medium‐sized firms (SMEs) to identify the main barriers firms face to promote the CE, focusing specifically on the following: those related to a lack of resources (human and financial) and capabilities (expertise) and those related to the regulatory framework (administrative procedures and the costs of meeting the regulations). Our results indicate that it is the complexity of administrative/legal procedures and the costs of meeting regulations/legal standards that constitute the most significant barriers, whereas the lack of human resources is also perceived to be an obstacle by firms engaged in CE activities. Those obstacles may be considered revealed barriers, and it is only when the firms become involved in these activities that they actually perceive them. Furthermore, when we consider the breadth of CE activities, administrative procedures and regulations once again emerge as the most significant obstacles. Finally, we stress the need to distinguish between different CE activities given that the perception of barriers differs substantially across these activities. Firms undertaking a disruptive innovation redesigning products and services to minimize the use of materials are more likely to perceive all barriers as important. However, firms implementing such activities as minimizing waste, replanning energy usage, and using renewable energy only perceive those obstacles related to administrative procedures and regulations.

Do board sustainability committees contribute to corporate environmental and social performance? The mediating role of corporate social responsibility strategy

Abstract: The purpose of this study is to investigate the impact of board sustainability committees on environmental and social performance and to examine the mediating effect of corporate social responsibility (CSR) strategy on the relationship between the presence of board sustainability committees and corporate sustainability performance. Using data of U.K. listed firms for the period of 2009–2016, the study employs panel regression analysis and bootstrapping techniques to test study hypotheses. The results suggest that the presence of a sustainability committee improves the effectiveness of CSR strategies. The results also indicate that firms with effective CSR strategies exhibit better environmental and social performance. Further, the empirical results show that the effectiveness of CSR strategy explains the positive relationship between board sustainability committees and corporate environmental and social performance, thus supporting the theoretical framework of the study. The findings of the study shed new light on this research direction and could be of interest to board members, managers, practitioners, investors, policy makers, and regulators that plan to promote sustainability practices and strategies needed for sustainable development.

Are women eco‐friendly? Board gender diversity and environmental innovation

Abstract: As a result of recent climate change impacts, environmental sustainability has received enormous attention from scholars and policy makers Environmental innovation is one of the major ways of acting in harmony with the environment, but it also requires a significant amount of resources and strong corporate commitment As boards of directors have great influence over the strategic direction of firms and are responsible for corporate environmentalism, we examine the likely relationship between board gender diversity (BGD) and environmental innovation measured as process innovation and product innovation Based on a relatively large dataset (10,334 firm‐year observations) of US listed firms, we find that BGD has a significant positive association with environmental innovation Furthermore, we also find that this relationship is more pronounced in less profitable firms and in environmentally sensitive industries Our results remain robust to endogeneity issues and alternative proxies We interpret our results under upper echelon and gender socialization theories and suggest important implications for policy makers

Greenwashing and environmental communication: Effects on stakeholders' perceptions

Abstract: Since the first Earth Day in the 1970s, corporate environmental performance has increased dramatically, and cases of greenwashing have increased sharply. The term greenwash refers to a variety of different misleading communications that aim to form overly positive beliefs among stakeholders about a company's environmental practices. The growing number of corporate social responsibility claims, whether founded or not, creates difficulties for stakeholders in distinguishing between truly positive business performance and companies that only appear to embrace a model of sustainable development. In this context, through the lens of legitimacy and signalling theory, we intend to understand and assess the different influences that various types of misleading communications about environmental issues have on stakeholders' perceptions of corporate environmental responsibility and greenwashing. Stakeholder responses to an environmental scandal will also be assessed. The hypotheses tested through a four‐for‐two design experiment reveal that different levels of greenwashing have a significantly different influence on stakeholders' perceptions of corporate environmental responsibility and stakeholders' reactions to environmental scandals.

Board gender diversity and corporate environmental performance: The moderating role of family and dual‐class majority ownership structures

Abstract: While prior work has investigated the impact of (a) ownership structure and (b) board gender diversity separately on corporate environmental performance, researchers have not studied the potentially important relationship between ownership control and female board diversity in influencing corporate environmental performance jointly. We do so in the context of majority ownership in family‐controlled and dual‐class firms whose motives and influence are theoretically different from that of the firm's minority shareholders. Drawing on resource dependency, socioemotional wealth theory, and secondary agency theory, we hypothesize that majority family owners and dual‐class owners likely choose women directors to help advance their personal preferences for environmental corporate social responsibility. Our empirical tests utilizing 2,755 U.S. firm years over the 2010–2015 show that, as hypothesized, these two majority ownership types interact with board gender diversity to positively influence corporate environmental performance.

Do institutional investors drive corporate transparency regarding business contribution to the sustainable development goals

Abstract: Institutional investors show increasing interest in how companies align their corporate social responsibility strategies with the sustainable development goals (SDGs) proposed by the United Nations (UN). The information disclosed in this regard is essential to know and monitor business contribution to the 2030 Agenda. In this paper, we analyze the influence that institutional investors have on the adoption of the disclosure strategy established by UN and the Global Reporting Initiative (GRI)—GRI-SDG Compass. The results obtained for a sample of 989 international companies, which prepare their sustainability reports following the GRI guidelines, show that ownership by foreign investors, pension funds, and “other” investors boosts the relevance of the information disclosed in relation to the 2030 Agenda. On the contrary, government, financial institutions, and cross holdings have no impact on the information systems developed.

Does China's carbon emissions trading policy improve the technology innovation of relevant enterprises?

Abstract: China's carbon emissions trading (CET) policy aims to force relevant enterprises to implement low‐carbon technology innovation and address environmental challenges through marketization means. However, how China's CET policy may affect enterprise technology innovation and whether this effect may differ in industries remain to be further investigated. Therefore, based on the panel data of listed enterprises covered by the CET policy in China during 2009–2017, this paper employs the difference‐in‐difference (DID) and DID‐based propensity score matching models to evaluate the effect of CET on technology innovation. The empirical results indicate that the effect of China's CET on the technology innovation of related enterprises is generally not significant during the sample period, but this effect presents evident industrial heterogeneity. Specifically, among the eight CET‐covered industries, the CET policy helps to improve technology innovation for power and aviation enterprises but not in the other six industries (i.e., steel, chemical, building material, petrochemical, nonferrous metals, and paper), which implies that China's CET policy still has great potential for promoting the technology innovation of related enterprises. In addition, the central findings remain robust when the system generalized method of moment and DID‐based coarsened exact matching models are applied to consider the influence of omitted variables, unobservable confounders, and different matching methods.

Board Gender diversity, Environmental Committee and Greenhouse Gas Voluntary Disclosures

Abstract: We highlight the interrelations between board gender diversity, environmental committees and greenhouse gas (GHC) voluntary disclosures on a sample of 215 firms listed on the London Stock Exchange (LSE). Evidence from the study indicates significantly positive association gender diversity. Our findings suggests that a more diverse board can serve a diverse range of stakeholder demands and hence legitimise its green credentials and gain trust from a broad range of stakeholders. These findings have implications for policy formulation for firms.

The extended theory of planned behavior in Turkish customers' intentions to visit green hotels

Abstract: Over the last decade, many studies have started to focus on understanding customers' green purchase intentions since the increasing importance of environmental issues in the hotel industry. This study examined customers' intentions to visit green hotels by using the theory of planned behavior. Two constructs, environmentally friendly activities and overall image, were incorporated into the theory, and the extended theory of planned behavior model was tested. The aim of this study was to analyze the effects of the extended theory of planned behavior constructs (attitudes towards green hotels, subjective norms, perceived control, environmentally friendly activities, and overall image) on visit intentions and also to predict the effects of visit intentions on willingness to pay, satisfaction, and loyalty. Within this aim, the research model was formed to show the antecedents and consequences of intentions to visit green hotels. Data were collected by face‐to‐face survey technique, and 400 usable questionnaires were held from the customers in Izmir City, Turkey. In the findings, four of five constructs in the antecedents of intentions, except perceived control, were found as significant, and all three consequences of intentions were found as significant. The results of the study supported the usage of the extended theory of planned behavior in the context of green hotels. Theoretical contributions and discussions were explained lastly.

Can voluntary environmental regulation promote corporate technological innovation

Abstract: The impact of environmental regulation on technological innovation has been widely discussed in the academic circle. Based on the panel data of 403 Chinese manufacturing firms from 2010 to 2015, this paper explored the role of voluntary environmental regulation in technological innovation. The results showed the following: First, both voluntary environmental information disclosure and environmental management system certification had a positive effect on corporate innovation investment. Second, compared with the impact of environmental information disclosure, the impact of environmental management system certification on corporate innovation investment was more significant. Third, there was a significant positive interaction between environmental information disclosure and environmental management system certification. Finally, the effect of voluntary environmental regulation on corporate technological innovation in heavily polluting industries was stronger than that in lightly polluting industries.

The circular economy and consumer behaviour: The mediating role of information seeking in buying circular packaging

Abstract: The transition towards a circular economy is a crucial issue to pursue a more sustainable development. In this transition, consumers' comprehension and engagement are necessary points to guide them towards more environmentally conscious purchases. This study extends the understanding of green consumer behaviour by testing an integrated conceptual model that explores the influence of personal concern, other pro‐environmental behaviours, greenwashing beliefs, consumer innovativeness, and personal predisposition to seeking information on the purchasing of circular packaging. We explored both the stand‐alone and the mediating effects of information seeking. Data were collected from a questionnaire‐based survey administered to a large and representative sample of Italian families, using 1,643 valid responses. We used structural equation modelling to test the proposed hypotheses. The results highlight the fundamental importance of seeking information in order to guide consumption choices that are more consistent with the circular economy. For managers, our paper suggests that packaging counts in purchasing decisions and that information is used by consumers to search for consistency between personal attitudes, other pro‐environmental behaviours, and the circular attributes of packaging.

Environmental management capabilities for a “circular eco-innovation”

Abstract: At a micro level, eco‐innovation marks a transition towards a circular economy (CE), and standardised routines and controls are being implemented by businesses to introduce eco‐innovative processes and thus a circular business model. Eco‐innovation applied to a circular model implies changes to companies' environmental management and accounting practices used to manage natural resources. In this context, this study analyses and measures formal and informal environmental management systems, such as certification standards and other management and environmental accounting procedures used in eco‐innovation and the CE within the dynamic capabilities theoretical framework. The study also investigates the cause‐and‐effect relationship between firms' “circular eco‐innovation” and environmental capabilities using partial least squares structural equation modelling and tests it using a sample of Spanish companies. This study offers new knowledge about the interposition of business eco‐innovation and CE‐related activities introduced by firms from the dynamic capabilities perspective.