Abstract:

Although growing, corporate environmental performance (CEP) research remains fragmented, focusing primarily on single environmental dimensions--especially carbon emissions--and emphasizing internal drivers while overlooking external institutions. We develop an integrated framework of CEP that simultaneously examines four key environmental areas: CO₂ emissions, waste generation, energy use, and water use. Drawing on institutional theory, behavioral theory of the firm, and resource-based view, we analyze how external environmental policy stringency and internal factors--slack, firm size, and environmental governance--shape CEP, and how CEP influences financial performance. Using data on S&P 500 firms from 2006–2020 and employing seemingly unrelated regression to jointly estimate CEP drivers, we show that different environmental dimensions respond to distinct combinations of internal and external factors. We further find that firms with strong CEP across all four areas achieve superior financial performance. These findings underscore the value of comprehensive environmental improvements and advance CEP theory and methodology.

Please choose your submission type: Full Paper

Primary Track: Sustainable and Responsible Business

Keywords: responsible business;CSR

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Ms. Rei Uchida