Environmental Policy, Sustainable Development, Governance Mechanisms and Environmental Performance

Faizul Haque, Collins G. Ntim

Research output: Contribution to journalArticle

42 Citations (Scopus)
9 Downloads (Pure)

Abstract

We investigate the effects of environmental policy (Climate Change Act – CCA), sustainable development frameworks (Global Reporting Initiative – GRI; UN Global Compact - UNGC) and corporate governance (CG) mechanisms on environmental performance (Carbon Reduction Initiatives – CRIs and Actual Carbon Performance – GHG emissions) of UK listed firms. We use generalised method of moments (GMM) estimation technique to analyse data consisting of 2,245 UK firm-year observations over the 2002-2014 period. First, we find that the CCA has a positive effect on CRIs, and this effect is stronger in better-governed firms. Second, we find that the GRI-based framework is positively associated with CRIs. Third, we find that firms with poor CG structures have lower actual carbon performance compared with their better-governed counterparts. Overall, our evidence suggests that firms can symbolically conform to environmental policy (CCA) and sustainable development frameworks (GRI, UNGC) by engaging in CRIs without necessarily improving actual environmental performance (GHG emissions) substantively.
Original languageEnglish
Pages (from-to)415-435
Number of pages21
JournalBusiness Strategy and the Environment
Volume27
Issue number3
Early online date12 Dec 2017
DOIs
Publication statusPublished - Mar 2018

Keywords

  • Environmental policy
  • climate change act and GHG emissions
  • sustainable development and global reporting initiative
  • stakeholder engagement
  • corporate governance
  • institutional theory

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Finance
  • Management, Monitoring, Policy and Law
  • Global and Planetary Change

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