Testa Et Al 2015

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Internalization of Environmental Practices and InstitutionalComplexity: Can Stakeholders Pressures Encourage

Greenwashing?

Francesco Testa1 • Olivier Boiral2 • Fabio Iraldo1

Received: 4 April 2015 / Accepted: 16 November 2015

Springer Science+Business Media Dordrecht 2015

Abstract This paper analyzes the determinants underly-

ing the internalization of proactive environmental man-agement proposed by certifiable environmental

management systems (EMSs) such as those set out in ISO

14001 and the European Management and Auditing

Scheme (EMAS). Using a study based on 232 usable

questionnaires from EMAS-registered organizations, we

explored the influence of institutional pressures from dif-

ferent stakeholders and the role of corporate strategy in the

‘‘substantial’’ versus ‘‘symbolic’’ integration of environ-

mental practices. The results highlighted that although

institutional pressures generally strengthen the internal-

ization of proactive environmental practices, the influence

of stakeholders can either support the integration of these

practices or encourage their superficial adoption. For

example, while pressure from suppliers and shareholders

contribute to corporate greening, pressure from customers

and industrial associations tend to encourage greenwashing

(i.e., the superficial and misleading adoption of environ-

mental practices). Product quality-oriented strategies also

positively influence EMS internalization. The paper sheds

light on the institutional complexity underlying the sub-

stantial versus symbolic implementation of environmentalpractices, and questions the dominant isomorphic view of

EMS adoption. The paper also bridges the gap between

complementary approaches on corporate greening, notably

neo-institutional and stakeholder theories.

Keywords Environmental management system

Environmental strategy Greenwashing Institutional

complexity Stakeholders

Introduction

The adoption of certifiable environmental management

systems (EMSs) such as those proposed by the ISO 14001

and EMAS standards has become common practice for

corporate greening in most sectors worldwide. ISO 14001

was launched in 1996 and is the most widespread EMS

standard, with more than 300,100 organizations certified in

2013 (ISO 2013). The Eco Management and Audit

Scheme (EMAS) was introduced by the European Com-

mission in 1993 and has been available to non-EU orga-

nizations since 2009. In 2015, approximately 3000

organizations are registered in EMAS, covering approxi-

mately 9800 sites (European Commission 2015).

Despite a few differences in the requirements, the

EMAS and ISO 14001 standards are based on the same

type of management system. This system echoes the

Deming cycle (Darnall 2006; Boiral 2007): plan (identifi-

cation of significant environmental aspects, policy, objec-

tives, and improvement programmes for the environment),

do (training, communication, operational control, etc.),

check (performance measurement, non-compliance and

corrective actions, and audits), and act (management

& Francesco Testa

[email protected]; [email protected]

Olivier [email protected]

Fabio Iraldo

[email protected]

1 Sant’Anna School of Advanced Studies – Institute of

Management, Piazza Martiri della Liberta 33, 56127 Pisa,

Italy

2 Faculte des Sciences de L’administration, Departement de

Management, Universite Laval, Pavillon Palasis-Prince,

2325, rue de la Terrasse, Local 1638, Quebec, QC G1V 0A6,

Canada

1 3

J Bus Ethics

DOI 10.1007/s10551-015-2960-2

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review and resources allocation). These principles also

cover the main characteristics of the more ‘‘proactive’’

environmental management practices, including top man-

agement support, development of environmental indicators,

and employee training and involvement (Buysse and Ver-

beke 2003; Darnall et al. 2010; Henriques and Sadorsky

1996).

The determinants and implications of these EMSs havebeen widely studied (e.g., Bansal and Hunter 2003; Delmas

2002; Glachant et al. 2002; Heras-Saizarbitoria and Boiral

2013; King et al. 2005). Generally speaking, certifiable

EMSs are expected to increase corporate legitimacy and

improve environmental practices (Boiral and Henri 2012;

Testa et al. 2014). The certification process contributes to

strengthening the ‘‘legitimacy’’ of organizations in the eyes

of external stakeholders, to whom environmental practices

and performance in this area can appear opaque (Boiral

2007; Delmas 2001; Jiang and Bansal 2003). The acqui-

sition of the ISO 14001 or EMAS certificates tends to

signal a reliable and credible environmental commitmentby the organization, thus enhancing its reputation (Delmas,

2001; Heras-Saizarbitoria and Boiral 2013; King et al.

2005; Potoski and Prakash 2005; Rahman and Post 2012).

However, the extent to which external pressure for

certification really contributes to the internalization of

environmental practices remains uncertain and understud-

ied. Based on the empirical literature on the implementa-

tion of EMSs (Boiral 2007; Christmann and Taylor 2006;

Jiang and Bansal 2003), internalization can be defined as

the substantial rather than superficial integration of specific

practices and principles proposed by EMSs in organiza-

tions’ daily activities.

This internalization cannot be equated with the adoption

of a formal EMS. Firstly, the impact of certifiable EMSs on

environmental performance is controversial (Barla 2007;

Boiral 2007; Darnall et al. 2008; Russo 2009). The adop-

tion of EMS, such as the ISO 14001 and EMAS standards,

does not necessarily contribute to improving environmental

performance and they are often superficially implemented

(Boiral and Henri 2012; Castka and Prajogo 2013;

Christmann and Taylor 2006; Testa et al. 2014; Yin and

Schmeidler 2009). Secondly, these standards are often used

for marketing purposes rather than to really improve

environmental practices (Boiral 2007; Darnall 2006; Jiang

and Bansal 2003). As a result, certifiable EMSs could

contribute to greenwashing, which has been defined ‘‘as the

intersection of two firm behaviors: poor environmental

performance and positive communication about environ-

mental performance’’ (Delmas and Cuerel Burbano 2011,

p. 65).

Although some studies have found that positive and

negative environmental actions represent distinct con-

structs (Mattingly and Berman 2006; Post et al. 2011),

these actions are not necessarily related to the corporate

communication on environmental issues, which tends to

artificially inflate performance in this area (e.g., Laufer

2003; Bowen and Aragon-Correa 2014; Delmas and Cuerel

Burbano 2011; Du 2014; Boiral 2007; Lyon and Mont-

gomery 2015). In this perspective, greenwashing appears as

an external projection of a positive image of a firm, which

is not reflected in its internal behaviors regarding envi-ronmental issues. Consequently, stakeholder pressure for

the adoption of a certified EMS does not necessarily

strengthen environmental practices and performance in this

area. In certain cases, such pressure could even increase the

contradictions between the appearance of corporate

greening through certifiable EMSs and the actual practices

inside the organization. This type of contradiction has been

highlighted by Hawthorne (2012) on the frequent discon-

nection between the image projected by the most admired

companies—such as Apple, Starbucks, and American

Apparel—and their actual internal practices. For example,

although Apple is one of the most admired companies, it‘‘has historically been less environmentally responsible,

less worker friendly, and much less open than other tech

companies’’ (Hawthorne (2012, p. 73). Hawthorne echoes

the numerous criticisms of corporate greenwashing and

contradictions between talk and action (e.g., Atvesson

1990; Marziliano 1998; Cho et al. 2015; Boiral 2013).

Generally speaking, greenwashing tends to undermine

corporate accountability toward stakeholders and the

credibility of environmental initiatives (Laufer 2003;

Boiral 2013; Cho et al. 2015). Misleading appearances

regarding corporate sustainability can also create confu-

sion and loss of confidence, in particular among con-

sumers and the general public who have increased

difficulties in identifying truly socially responsible firms

(Parguel et al. 2011; Chen and Chang 2013a). Finally, the

excessive gap between talk and action regarding corporate

sustainability is the subject of public criticism in the

media and by NGOs such as CorpWatch, which gives out

greenwashing awards.

In this perspective, the prevention of greenwashing

through the internalization of EMS and substantial envi-

ronmental practices represents an important challenge for

stakeholders, businesses, and society. Although the litera-

ture has mostly focused on the determinants of the adoption

of certifiable EMSs, their implementation does not neces-

sarily mean that the environmental practices on which they

are based have been substantially integrated. Yet this

integration is key to corporate greening (Bansal and Hunter

2003; Qi et al. 2013; Testa et al. 2014). Paradoxically, with

a few exceptions (Castka and Prajogo 2013; Christmann

and Taylor 2006), the external factors explaining the

internalization of certifiable EMSs have not been studied in

depth in the literature.

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This study contributes to a better understanding of the

institutional complexity underlying the internalization of

environmental practices through the adoption of a certifi-

able EMS. This complexity is related to the diversity of

external pressures and expectations by various stakehold-

ers. Research on institutional complexity has shown that

external pressures are based on various and sometimes

conflicting institutional logics (Greenwood et al. 2011,2010; Pache and Santos 2010; Smets and Jarzabkowski

2013). Moreover, the responses of organizations to these

pressures are not isomorphic and may result in various

strategies of adaptation or resistance (Oliver 1991, 1992;

Pache and Santos 2013; Scherer et al. 2013; Westermann-

Behaylo et al. 2014). Thus, although certifiable EMSs are

based on standardized prescriptions, external pressures for

their adoption are not monolithic and how they are trans-

lated into practice can vary significantly from one certified

organization to another.

In this perspective, the factors driving the substantial

internalization of certifiable EMSs need to be furtherinvestigated. The neo-institutional theory and the

resource-based view offer a valuable theoretical frame-

work for shedding more light on how external and

internal factors influence the internalization of an EMS

into strategic and operational activities (see the concep-

tual model in Fig. 1).

In order to contribute to the current debate on the drivers

of environmental proactive strategies, this study analyzes

the influence of external pressures, coming from various

stakeholders, and the role of corporate strategy in the

internalization of environmental management practicesrelated to EMAS requirements. Drawing on data from 232

EMAS organizations, we tested whether organizations

enduring greater institutional pressures experience a higher

internalization of EMS requirements. The study also ana-

lyzes the influence of different stakeholders and the

strategies focused on cost saving or product quality on the

internalization of EMS requirements.

The rest of the paper is structured as follows. Having

reviewed the literature in order to formulate the appropriate

set of hypotheses, we describe the context of the study, the

data collection process, and illustrate the statistical meth-

ods. Next, we present the results achieved. The last sectionprovides the main conclusions, as well as a discussion of

their implications, limitations, and avenues for further

research.

Fig. 1 Conceptual model

Internalization of Environmental Practices and Institutional Complexity: Can Stakeholders…

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Literature Review and Development of Hypotheses

The Heterogeneous Internalization

of Environmental Management Systems

An increasing number of companies are adopting formal

EMSs based on certifiable standards. The international

recognition and flexibility of these standards, which can beadapted to most types of organizational contexts, partly

explain their successful diffusion worldwide (Delmas 2002;

Heras-Saizarbitoria and Boiral 2013;Qietal. 2012; Testa and

Iraldo 2010). In addition, obtaining the externalrecognition of

compliance with a certifiable EMS, such as ISO 14001 and

EMAS, provides a signal of environmental leadership to the

market (Rainesand Prakash 2005). Considering the list of best

practices of environmental leadership provided by Dechant

and Altman (1994), the EMS can be seen as a manifestation of

integrated environmentalism into a firm’s business planning

and operations. ISO 14001 and EMAS standards require a

combination of management support for environmental ini-

tiatives (Sharma 2000; Bansal and Hunter 2003), a clear

definition of roles and responsibilities related to environ-

mental issues (de Brio et al. 2007), and an allocation of suf-

ficient resources for managing environmental issues (Darnall

and Edwards 2006) whichallow a company to gain significant

environmental improvements. EMAS requires more stringent

requirements than ISO 14001, particularly with regard to

employee involvement, demonstration of full legal compli-

ance, environmental reporting, and dialog with external

stakeholders (European Commission 2011; Heras-

Saizarbitoria et al. 2015).

According to the mainstream literature, the implemen-

tation of this type of proactive environmental initiatives is

expected to improve environmental performance (Aragon-

Correa and Rubio-Lopez 2007; Berry and Rondinelli 1998;

Sharma and Vredenburg 1998). In addition, the certifica-

tion process should, in principle, guarantee that the certi-

fied organizations comply with the standard requirements

(Darnall 2006; Heras-Saizarbitoria et al. 2013; Potoski and

Prakash 2005).

However, as highlighted in Table 1, the empirical lit-

erature on the effectiveness of certifiable EMSs provides a

mixed picture of their real impact on environmental per-

formance (Barla 2007; Boiral 2007; Darnall et al. 2008

Jiang and Bansal 2003). According to many authors, cer-

tifiable EMSs actually have a positive impact on different

dimensions: environmental performance (Melnyk et al.

2003; Nishitani et al. 2012; Russo 2009), regulatory com-

pliance (Potoski and Prakash 2005; Prakash and Potoski

2014), and improvement in environmental management

practices (Darnall 2006; King et al. 2005). Conversely,

others studies have found no conclusive evidence of the

positive effects of EMSs on environmental performance

(Barla 2007; Christmann and Taylor 2006; Jiang and

Bansal 2003) and some have even highlighted negative

impacts such as the bureaucratization of environmental

practices and certification costs (Boiral 2007; Dogui et al.

2014).

The very few specific studies on the impacts of EMAS

on environmental performance have also produced incon-clusive results. Iraldo et al. (2009) highlighted that the

EMAS requirements need time to be fully acknowledged

and ‘‘metabolized’’ in daily practices, and their effects on

the improvement in environmental performance only

emerges when the EMS is sufficiently mature. Similarly,

Testa et al. (2014) investigated the impacts of EMAS and

ISO 14001 on the reduction in carbonic anhydride emis-

sions on 229 energy intensive plants in Italy. According to

this study, EMAS requires more significant changes in

organizational structure and employee practices than ISO

14001. As a result, EMAS seems to generate visible

environmental performance improvements only in the longrun, when its prescriptions have been fully integrated into

the management dynamics.

The studies of Iraldo et al. (2009) and Testa et al. (2014)

are in line with previous works on the critical role of the

substantial rather than superficial adoption of EMS prac-

tices to improve environmental performance (e.g., Boiral

2007; Fryxell et al. 2004; Heras-Saizarbitoria et al. 2013;

Qi et al. 2012). For example, Yin and Schmeidler (2009)

stressed the heterogeneous environmental outcomes of ISO

14001. They found a positive relationship between the

integration of ISO 14001 requirements in daily practices

and improvements in the environmental performance of

certified facilities in the U.S. Qi et al. (2012) focused on

Chinese ISO 14001 certified companies and found that the

level of internalization of ISO 14001 requirements has a

positive influence on environmental performance. Simi-

larly, the lack of internalization of ISO 14001 is generally

considered as one of the main causes of the ineffectiveness

of this standard in improving environmental practices and

performance (Boiral 2007; Christmann and Taylor 2006;

Heras-Saizarbitoria et al. 2015; Lannelongue et al. 2015).

In this perspective, the conflicting findings of the liter-

ature on the effectiveness of EMSs could be related to their

uncertain internalization. In many organizations, certifiable

EMSs are merely adopted symbolically to increase external

legitimacy, rather than to improve internal practices (Boiral

and Henri 2012; Christmann and Taylor 2006). This type of

superficial and misleading adoption of certifiable EMS

represents one of the many forms of greenwashing, which,

as highlighted by Lyon and Montgomery (2015), can be

manifested in many different ways, including symbolic

management and decoupling between formal structures and

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actual practices. This specific form of greenwashing is part

of a symbolic corporate environmentalism, embedded in

organizational practices and symbolic implementation of

recognized standards verified by third-party audits (Boiral

2007; Dogui et al. 2014). As a result, it tends to be less

visible and more sophisticated than traditional and narrow

form of greenwashing based on the deliberate communi-

cation of misleading information (Bowen and Aragon-

Correa 2014). As highlighted by Bowen and Aragon-Cor-

rea (2014, p. 108): ‘‘A challenging new frontier in research

(and practice) is to move beyond limited current concep-

tions of greenwashing in the academic literature to ana-

lyzing symbolic corporate environmentalism.’’

Surprisingly, relatively few studies have investigated the

main determinants of this symbolic corporate environ-

mentalism, particularly in the case of the internalization of

the EMAS standard. Some studies have stressed the role of

internal factors such as the support of managers, the

resources allocated, or the ability to effectively involve

employees (Boiral 2007, 2011; Jiang and Bansal 2003).

Other studies have underlined the role of management

support, internal resources, and capabilities of managers to

improve employee involvement and environmental per-

formance (Dechant and Altman 1994; Chen and Chang

2013).

However, most of these internal factors should theoret-

ically already be covered by certifiable EMSs, as proved by

the new version of ISO 14001: 2015, which now covers the

role of leadership in a specific section. This raises the

questions of the real compliance of certified organizations

and the value of external audits.

The validity and reliability of environmental audits and

certification processes have been criticized in various

studies (Boiral 2007; Dogui et al. 2014; Heras-Saizarbitoria

et al. 2013). However, if the unreliability of certain third-

party audits explains why certain certified organizations

have superficially implemented their EMS, even if it was

supposed to be compliant with ISO 14001 or EMAS, it

does not explain the reasons for the lack of internalization

of these standards. These reasons could be related to the

type of institutional pressures for EMS adoption and the

strategy adopted by organizations.

Institutional Complexity and Corporate Strategy

Institutional pressures are generally considered as one of

the main motivations behind the adoption of certifiable

EMSs (Castka and Prajogo 2013; Heras-Saizarbitoria et al.

2011, 2013; Schaefer 2007). Firstly, institutional pressure

from government bodies and agencies or from other

stakeholders can encourage the adoption of a certifiable

EMS to promote a self-regulatory approach (King et al.

2005; Potoski and Prakash 2005; Prakash and Potoski

2014). The certification thus seems to prove to the outside

Table 1 Studies on the relation between EMS adoption and environmental performance

Authors ISO

14001/EMAS

Country Sector Sample Year of

analysis

Key variables Effect on

environmental

performance

Melnyk et al. (2003) ISO 14001 US Manufacturing 1510 1998 Waste indicators Positive

Zobel (2013) ISO 14001 Sweden Manufacturing 116 firms 1994–2000 A ir/water emission;

resource use, waste

No effect

King et al. (2005) ISO 14001 US Manufacturing 7899

facilities

1995–2001 TRI Positive

Russo (2009) ISO 14001 US Electronics

manufacturing

242

facilities

1996–2001 TRI Positive

Barla (2007) ISO 14001 Canada Pulp and paper

firms

37

facilities

1997–2003 Quality of water

effluents

Positive for BOD no

effect for other

parameters

Iraldo et al. (2009) EMAS Europe Manufacturing 101 firms 2006 Air/water emission;

resource use, waste

Positive but under

conditions

Gomez and Rodriguez

(2011)

ISO 14001 Spain Manufacturing 126 firms 2 001–2007 TRI No effect

Nishitani et al. (2012) ISO 14001 Japan Manufacturing 500 firms 2002–2008 PRTR EMS maturity Positive

Franchetti (2011) ISO 14001 US Manufacturing 121 firms 2008 Solid waste

generation

Positive

Daddi et al. (2011) EMAS Italy Manufacturing 64 firms 1998–2008 Water and energy

consumption, waste

production

Unclear

Testa et al. (2014) EMAS ISO

14001

Italy Energy 229

facilities

2007–2010 CO2 Unclear


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world that the organization has voluntarily and credibly

committed itself to pursuing continuous environmental

improvement, thereby avoiding or reducing stringent reg-

ulatory controls by public bodies. Secondly, market pres-

sures increasingly encourage organizations to adopt

environmental practices and certification standards, par-

ticularly in China and India (Christmann and Taylor 2006;

Heras-Saizarbitoria et al. 2011; Wu 2013). This is basicallydriven by the impossibility for intermediate clients or end

consumers to acquire direct information on (and therefore

to have a deep knowledge of) the environmental attributes

of a product, a process, or an organization (i.e., a producer).

This then leads to an asymmetric distribution of informa-

tion. By obtaining the external recognition of compliance

with a standard of excellence such as ISO 14001 and

EMAS, an organization tries to solve this market failure,

providing a signal to the market regarding the reliability of

its environmental commitment (King et al. 2012). Drawing

on the more general concept of corporate social responsi-

bility, Bear et al. (2010) also found that social and envi-ronmental virtuous programs are positively related to

corporate reputation and are driven by stakeholders.

Overall, the organizational adaptation to institutional

pressure is at the core of the neo-institutional theory, which

has been widely used to explain the adoption of certifiable

EMSs (Christmann and Taylor 2006; Heras-Saizarbitoria

et al. 2011, 2013; Yin and Schmeidler 2009). According to

this theory, institutional pressures encourage organizations

to adopt similar management structures and practices thus

becoming isomorphic (Di Maggio and Powell 1983;

Greenwood et al. 2014). These structures and practices are

mostly intended to enhance corporate ‘‘legitimacy’’ in the

eyes of various stakeholders, rather than to improve

internal practices (Meyer and Rowan 1977). As a result,

they can be superficially implemented and not well inte-

grated within the organization.

Various studies based on the neo-institutional theory

have highlighted the symbolic adoption of certifiable EMSs

which, in many cases, are used for communication pur-

poses rather than to really improve environmental perfor-

mance (Boiral 2007; Christmann and Taylor 2006; Yin and

Schmeidler 2009). However, it follows that the more

external pressures increase, the more organizations attach

importance to EMSs and tend therefore to substantially

implement environmental practices.

Although it has apparently not been studied in the case

of the EMAS standard, this relationship between external

pressures and EMS internalization has been found in a few

studies on ISO 14001. For example, in their study on ISO-

certified firms in China, Christmann and Taylor (2006)

demonstrated that the internalization of the standard and

compliance with its requirements essentially depended on

customer pressures. Guoyou et al. (2012), Fryxell et al.

(2004), and Heras-Saizarbitoria et al. (2013) also showed

that the intensity of various external pressures such as

regulatory compliance and customer expectations increases

the internalization and benefits of the standard.

Based on these observations, we hypothesize that:

Hypothesis 1 Organizations that endure greater institu-

tional pressures, experience a higher internalization of EMAS requirements.

Although the intensity of external pressures is expected to

encourage the internalization of the EMS, the nature and

implications of these pressures are not monolithic. As high-

lighted by the literature on institutional complexity, organi-

zations tend to experience various pressures from different

institutional constituents, which are shaped by specific and

sometimes conflicting logics (Greenwood et al. 2011, 2010;

Pache and Santos 2010; Marano and Kostova 2015; Smets

and Jarzabkowski 2013). As a result, institutional pressures

are not isomorphic and organizations can internalize new

practices and structures very differently depending on theirresponses to specific demands, stakeholder expectations, and

institutional logics, that is to say ‘‘the belief systems and

associated practices that predominate in an organizational

field’’ (Scott et al. 2000, p. 170). Competing institutional

logics and expectations can shape the adaptation of organi-

zations to external demands in various fields such as the

health care system, education, and the financial sector (for an

overview, see Greenwood et al. 2011). This organizational

adaptation is not necessarily passive and may be based on

various strategies, including institutional resistance (Green-

wood et al. 2011; Oliver 1991, 1992; Pache and Santos 2010;

Westermann-Behaylo et al. 2014). From this perspective, the

superficial versus substantial implementation of EMS

requirements can appear as two different responses to insti-

tutional pressures for certification from stakeholders with

diverse expectations and institutional logics. As a result, the

level of internalization of standards such as ISO 14001 and

EMAS does not only depend on the intensity of external

pressures, but also on the stakeholders involved and on their

specific expectations and needs.

Firstly, the heterogeneous adoption of certifiable EMSs

shows that organizations have wide room for maneuver

when adopting standards such as ISO 14001 and EMAS

(Boiral 2007; Kitazawa and Sarkis 2000; Yin and Sch-

meidler 2009). This flexibility facilitates the adaptation to

various constraints and institutional logics. For example,

the organizational culture, attitudes of managers or

employee commitment are not covered by specific ISO

requirements, which can therefore leave room for a

superficial adoption of the standard (Boiral 2007; Jiang and

Bansal 2003; Qi et al. 2012). Overall, the existence of

conflicting institutional logics that challenge the values and

objectives of the organization tends to result in various

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resistance strategies to external pressures (Oliver 1991;

Pache and Santos 2010; Westermann-Behaylo et al. 2014).

Secondly, stakeholders may play a different role in

stimulating the adoption of environmental practices (e.g.,

Delmas and Toffel 2008, 2004; Henriques and Sadorsky

1999; Sarkis et al. 2010). For example, Delmas and Toffel

(2008) have shown how the prioritization of different

stakeholders, related to market or non-market pressures,has led to the adoption of many diverse environmental

practices, including the adoption of ISO 14001. Buysse and

Verbeke (2003) found that managers’ perceptions of

institutional demands from primary and secondary stake-

holders influence the development of an environmental

leadership strategy. Overall, because stakeholders have

different objectives and institutional logics, their influence

on environmental practices such as the adoption of EMSs is

not necessarily the same (Delmas and Toffel 2004).

For instance, the local/regional governments and envi-

ronmental agencies of certain European countries have

implemented various incentives to encourage participationin the EMAS standard and to promote proactive environ-

mental practices: regulatory reliefs, reduction in the

administrative burden for organizations, grants, etc. (Gla-

chant et al. 2002; Heras-Saizarbitoria et al. 2015). These

incentives do not necessarily have the same impact on the

internalization of the standard, compared for example to

commercial pressures from distant customers who cannot

verify the genuine adoption of an EMS. Based on these

observations, we hypothesize that:

Hypothesis 2 Organizations that endure greater pressures

from public authorities experience a higher internalizationof EMAS requirements.

Industries and trade associations also play an important

role in spreading information on the most innovative

environmental practices (Delmas and Montes-Sancho

2010). For example, industry associations can help firms to

be better informed of the benefits of EMS adoption and to

better manage the critical steps of the implementation

process (Testa et al. 2012). Additionally, pressures can be

exerted by community environmental groups which have a

strong interest in preserving the local environment and,

therefore, scrutinize a company’s behavior, including its

management of local pollutant dischargers (Henriques and

Sadorsky 1996). This is particularly true in the case of

EMAS which, differently from ISO 14001, requires a

transparent behavior toward neighborhoods by the disclo-

sure of an environmental report (the Environmental State-

ment). This leads to formulate the following hypotheses.


from industries and trade associations experience a higher

internalization of EMAS requirements.


from community environmental groups experience a higher


Capital investors may also have an interest in supporting

the environmental commitment of a firm. For instance, the

implementation of environmental practices can derive from

corporate directives that reflect the environmental awarenessof shareholders (Henriques and Sadorsky 1999). Consider-

ing the benefits associated with good environmental per-

formance such as a better corporate reputation (Russo and

Fouts 1997) or increased efficiency (Porter and Van der

Linde 1995), the owners can ask for the implementation of

specific environmental actions in all their firms and facilities.

Similarly, the adoption of an EMS can be positively evalu-

ated by banks and financial institutions during their financial

risks assessment (Ambec and Lanoie 2008). Several inter-

national banks (e.g., Credit Suisse, Unicredit, BNP Paribas)

claim that they take into account the environmental profile of

applicants when deciding whether or not to grant a loan andaround 80 international banks have supported ‘‘Equator

Principles’’ i.e., a risk management framework for deter-

mining, assessing, and managing environmental and social

risk in projects they finance. This discussion thus led to the

following hypotheses.


from shareholders experience a higher internalization of

EMAS requirements.


from banks and financial institutions experience a higher


Supply chain actors can also play a pivotal role in

pushing a firm toward pro-environmental behavior. Cus-

tomers, above all in a business-to-business market, can

require their suppliers to prove the adoption of an efficient

EMS in order to reduce the environmental risks in their

supply chain (Jiang and Bansal 2003; King et al. 2005). For

instance, one of the market leaders in the automotive sector

such as Renault Nissan requires its suppliers to demonstrate

their adoption of an EMS by providing a copy of the ISO

14001 or EMAS certificate. Similarly, supply chain rela-

tionships can stress the adoption of practices for improving

environmental performance along the entire supply chain

in order to a gain competitive advantage by signaling

environmental concern (Testa and Iraldo 2010) or for

ethical issues (e.g., reflecting the values of managers)

(Nawrocka 2008). As such, we formulate the following

hypotheses.


from customers experience a higher internalization of

EMAS requirements.


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from suppliers experience a higher internalization of

EMAS requirements.

Understanding the drivers of an environmental strategy

solely by focusing on external constituents is just seeing

one side of the coin. Drawing on the natural resource-based

view of the firm, various authors have argued that proactiveenvironmental strategies depend on the internal resources

and capabilities available (Hart 1995; Sharma and Vre-

denburg 1998, Christmann 2000). The endowment of tan-

gible and intangible assets such as know-how (Russo and

Fouts 1997), corporate culture (Barney 1986), and devel-

opment or tacit, socially complex or rare capabilities (Hart

1995) determines the ability of corporate strategy to be

really effective. For instance, Post et al. (2014) demon-

strated that how a board is made up, for example whether

there are women and independent directors, could enhance

the likelihood of adopting sustainable actions and, conse-

quently, improve corporate environmental performance.The internalization of certifiable EMSs can also be

influenced by economic aspects and organizational strate-

gies. According to the mainstream literature on environ-

mental management, the adoption of proactive practices in

this area tends to improve corporate effectiveness (e.g.,

Ambec and Lanoie 2008; Hart 1995; Hart and Ahuja 1996;

Porter and van der Linde 1995; Sharma and Vredenburg

1998). Environmental actions often result in various eco-

nomic benefits such as the reduction in material waste,

energy saving, and more efficient production processes.

Most of these internal benefits cannot be obtained through

a symbolic adoption of a certifiable EMS and thereforerequire a substantial integration of environmental practices.

These positive impacts of proactive environmental prac-

tices are reflected in various studies on the economic

benefits of certifiable EMSs (Darnall et al. 2008; Russo

2009; Bansal and Hunter 2003). Thus, the win–win rela-

tionships between corporate greening and economic/com-

petitive objectives can encourage the internalization of

environmental practices, insofar as these can be used as

tools to reduce costs, introduce innovative practices, and

improve corporate effectiveness.

Likewise, the internalization of certifiable EMSs can

improve quality management practices and vice versa. Theclose relationships between pursuing quality and environ-

mental performance have been widely highlighted in the

literature (e.g., Berry and Rondinelli 1998; King and Lenox

2001; Roy et al. 2001, 2013). These relationships are

reflected in the similarities between certification standards

such as ISO 14001 and ISO 9001 (Boiral, 2011; Roy et al.

2013). Certain benefits associated with quality manage-

ment practices, such as reducing waste, saving materials,

and improving process control, also have positive

environmental impacts. Finally, the institutional arrange-

ments of certifiable EMSs and quality standards such as

ISO 9001 are quite similar: attaining organizational legit-

imacy through external audits, improvement of corporate

image, implementation of a management system based on

the Deming cycle, procedures for the internalization of

similar practices, etc. Overall, the synergies between

quality and environmental management encourage a betterintegration of these inter-connected functions and the

development of specific competencies for lean and green

management (King and Lenox 2001; Roy et al. 2001,

2013). An organizational strategy to improve quality

management can thus facilitate the internalization of an

EMS such as the one foreseen by the EMAS standard.

Based on these observations, we hypothesize that:

Hypothesis 9 A cost-saving strategy encourages the


Hypothesis 10 A product quality-parented strategy

encourages the internalization of EMAS requirements.

Methodology

Sample

Our analysis used primary data from a questionnaire survey

conducted among EMAS-registered private companies

located in all EU member states. The data were collected

from September 2012 to March 2013 by an online ques-

tionnaire. The questionnaire was designed to take intoaccount the potential problems of common method vari-

ance that can affect behavioral research. Several procedural

remedies were adopted. As many researchers have high-

lighted, one possible bias is social desirability (King and

Bruner 2000; Tourangeau and Yan 2007). Consequently,

the anonymity of respondents was guaranteed by avoiding

any request for the name of either the respondent or the

organization. The letter of invitation specified that the data

would only be revealed in an aggregated form and

anonymously.

Since studies have shown that question formulation can

alter the results by as much as 50 % (Cannell et al. 1989), apre-test was carried out with five organizations in order to

identify poorly phrased questions or those that might lead

to biased answers. Since the questionnaire concerned the

adoption of an EMS and its drivers and benefits, in the pre-

test five ISO 14001- certified companies (four Italian and

one Spanish operating in the waste management, pulp and

paper, and construction sectors) were interviewed and the

questionnaire was filled in alongside trained researchers

who took notes regarding any doubts, misunderstandings,

F. Testa et al.

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and remarks. ISO 14001 rather than EMAS-registered

companies were chosen due to their knowledge regarding

the topic of the questionnaire and given that they would not

be actually taking part in the survey. Based on the pre-tests,

the survey was revised accordingly.

The submission process was as follows: first, we found

the email addresses of the environmental managers in all

3936 EMAS adopter organizations from the official EMASregister. We uploaded the questionnaire onto a web plat-

form and emailed managers with a link to access the

questionnaire and with detailed instructions on how to

complete the questionnaire. Next, we sent a reminder email

every 15–20 days. The survey was also supported by the

European Commission and other key stakeholders, who

published the link to the questionnaire on their websites

(see Fig. 2).

It was decided to submit the questionnaire to the envi-

ronmental department as it usually has the most relevant

information on the specific environmental practices and

procedures being carried out in an organization andbecause it has direct access to documentation concerning

environmental issues. 243 surveys were returned, corre-

sponding to a response rate of 6.1 %. This rate can be

interpreted as positive if we consider that it was calculated

with reference to the whole statistical population and not to

a random sample. It is also comparable with other surveys

on the same topic (see for instance Yin and Schmeidler

2009). Due to missing information and inadequate

responses, a total of 232 questionnaires were utilized (final

response rate 5.9 %).

Considering the relatively large non-response rate, we

analyzed sample selection bias by performing a Heckman

sample selection procedure assuming that the control

variables explain the respondents’ decision whether or not

to answer (see Davidson and McKinnon 2004). Since the

coefficient of the inverse Mills ratio is not significant, wecan affirm that selectivity might not be a problem

( p value = 0.689). Finally, the representativeness of the

sample was checked against the general characteristics of

the population, such as organization size and geographical

distribution. We found that the sizes of the organizations

tended to be similar, and there were more organizations

from Mediterranean countries than from central Europe

compared to the population of all the organizations in the

EMAS register (Table 2).

The low response rate was mainly due to the limited

participation from organizations located in two frontrunner

countries, Germany and Spain. The submission of thequestionnaire in English and the execution of a similar

survey carried out by the German EMAS competent body

in the same period1 could have discouraged German

companies from responding. The low response rate of

Spanish organizations is in line with lower response rates

in previous surveys on EMSs in Spanish firms (e.g., del

Brıo et al. 2001). Therefore, although a sample selection

bias had statistically been avoided, the low response rate

should be taken into consideration in the analysis of the

results.

Measures

Internalization of EMS Requirements

Unlike similar research carried out in the literature, we

used a more comprehensive approach to measure the level

of internalization of EMS requirements. Some authors have

focused on specific elements of the EMS structure, such as

the involvement of managers and employees or a reference

to a generic integration of the requirement in daily routines

(Guoyou et al. 2012; Yin and Schmeidler 2009), whereas

we measured the level of internalization of EMS require-

ments using 12 questions based on the four pillars of the

Deming Cycle. Following the approach of research on the

adoption of health and safety management systems (Fer-

nandez-Muniz et al. 2007, 2009), we identified measure-

ment instruments that reflected previous studies that have

investigated a firm’s environmental corporate social

Fig. 2 Steps of survey’s design

1 That survey is available ta http://www.emas.de/fileadmin/user_

upload/06_service/PDF-Dateien/EMAS_in_Germany_Evaluation_

2012.pdf .


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8/20/2019 Testa Et Al 2015


responsibility. (Clarkson et al. 2008; Rahman and Post

2012).

We identified four main actions that an organization

needs to take to truly implement an effective EMS:

• planning,

• operational activities,

• training and employee involvement,

• check and review actions.

The level of internalization of each tile was measured by

three specific items with a 5-point Likert scale indicatingthe level of implementation of each action (from 1: not

implemented; to 5: good implementation of the initiatives

and positive evaluation of their effectiveness). For each

EMS pillar, a single factor was obtained by merging the

corresponding items and Cronbach’s Alpha test was used to

check its reliability. In order to have a comprehensive

measure of EMS internalization, all items were also

aggregated into a single factor. Table 3 provides details on

all 12 items and on the results of the factor analysis.

Stakeholder Pressures

As mentioned above, a large body of literature has inves-

tigated the effect of stakeholders on a firm’s environmental

commitment. Based on this previous research, we focused

on the following stakeholders: public authorities (Gus-

merotti et al. 2012; Heras-Saizarbitoria et al. 2015);

industry and trade associations (Testa et al. 2012); cus-

tomers (King et al. 2005; Christmann and Taylor 2006);

suppliers (Testa and Iraldo 2010); shareholders (Henriques

and Sadorsky 1999); banks and financial institutions

(Ambec and Lanoie 2008); and community environmental

groups (Henriques and Sadorsky 1996). Following Darnall

et al. (2010), we asked to managers to indicate the level of importance of each stakeholder on organization’s decision

to adopt environmental actions. Managers replied using a

3-point Likert scale: ‘‘not important,’’ ‘‘moderately

important,’’ or ‘‘very important.’’

Organizational Strategies

According to the resource-based view of the firm, the

development of complex capabilities (know-how, tacit

knowledge, intangible resources) is necessary to support

corporate greening and, consequently, improve organiza-

tional effectiveness (Darnall and Edwards 2006; Hart 1995;

Sharma and Vredenburg 1998). Overall, the success of

corporate strategies requires a combination of specific

resources embedded in organizational practices, culture,

and relationships with stakeholders (Christmann 2000;

Wong et al. 2012). These resources can improve both

economic performance and the internalization of proactive

environmental practices (Aragon-Correa and Sharma 2003;

Russo and Fouts 1997; Schaltegger et al. 2012). In order tomeasure the extent to which organizational strategy focuses

on cost savings or on quality management, and the influ-

ence of this strategy on the internalization of EMS prac-

tices, we used the answers to the following question: Which

of the following competitive factors do you use to enhance

your most important product on the market?

Respondents replied using a three-point scale, indicating

whether firm strategy focused on cost savings or quality

management was ‘‘not important,’’ ‘‘moderately impor-

tant,’’ or ‘‘very important.’’

Control Variables

In order to capture the influence of other factors on the

level of internalization of EMS requirements, we con-

structed a set of control variables.

Size: A small organization often suffers from a lack of

human and financial resources, which limits its ability to

internalize some of the specific requirements of EMSs

(Darnall et al. 2010). We thus controlled for an organiza-

tion’s size in terms of the number of employees.

Market Scope: The geographical dimension of the

competitive arena can also affect how and the extent to

which environmental practices are adopted (Nakamuraet al. 2001). We thus included categorical variables to

control the spatial scope of the market in which an orga-

nization competes, assigning 1 if the organization’s market

was at a local level, 2 national, 3 European, and 4 global.

Economic Performance: Since the integration of EMS

requirements in daily routines involves costs in term of

human and financial resources, it may be influenced by the

economic position of a company. In order to control for the

degree of market success, following Darnall et al. (2008),

Table 2 Survey sample versus all registration holders

Organization size Geographical distribution

Small (%) Medium (%) Large (%) Southern

Europe (%)

Western/Central

Europe (%)

Eastern

Europe (%)

Northern

Europe (%)

EMAS population 53 28 19 54 42 2 2

Sample 50 27 23 68 24 4 4

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we asked environmental managers to evaluate the eco-

nomic performance of their organization over the last three

years, by using a 5-point Likert scale (from 1: revenue was

‘‘so low as to produce large losses’’ to 5: revenue was

‘‘well in excess of costs’’).

Sector : In order to take into account the external context

and its potential effect on firm decision-making, we alsoconsidered the operations sector (Testa et al. 2014) by

including a dummy variable if the company operated in the

manufacturing sector. Table 4 provides descriptive statis-

tics on the variables.

Empirics

We used ordinary least squares (OLS) regression with robust

standard errors to evaluate the determinants of the

internalization of EMS requirements. The first model con-

tains only the control variables (a categorical variable to

control for economic performance, a dummy variable for the

manufacturing sector and organization size). The second

model includes variables for institutional pressures and the

control variables. The third model incorporates variables for

both institutional pressures and competitive strategies andthe control variables. Then, we performed four further

models in order to check the effects of our explanatory

variables on the different pillars of EMS implementation. In

these models, the dependent variable is the level of imple-

mentation of: planning activities (Model 4), operational

activities (Model 5), actions for training and employee

involvement (Model 6), check and review actions (Model 7).

In order to verify the robustness of our results, for all

models, we checked the normality of residuals. This is

Table 3 Level of internalization of EMS requirement

EMS Pillar Item Factor loading

comprehensive factor

Factor loading

EMS pillar factor

Planning

The environmental policy was disseminated effectively to all employees 0.799 0.871

Based on the policy, management established measurable objectives and targets related to the

environment

0.806 0.901

There are actions aimed at gathering opinions and suggestions from employees regarding the

environment

0.618 0.803

Cronbach’s alpha planning factor 0.797

Training and employee involvement

Employees are offered incentives to implement the principles and procedures related to

environmental protection

0.579 0.676

Project teams from different company departments are in charge of solving specific environmental

issues

0.584 0.829

There is a formalized system to detect any training needs in the environmental field 0.643 0.806

Cronbach’s alpha planning factor 0.652

Operational activities

There are specific operating instructions for the management of environmental issues (e.g.,

management of a temporary waste site, emissions into the atmosphere)

0.832 0.896

The company has identified one or more procedures to detect and deal with potential emergency

situations

0.779 0.910

Emergency response procedures are periodically re-examined and updated when necessary,

especially after scheduled checks or after emergency situations

0.806 0.882

Cronbach’s alpha operations factor 0.877

Monitoring and checking

There are formal systems to measure performance in order to detect to what extent targets have

been reached

0.815 0.889

The organization has implemented actions to register and investigate non-compliance and

preventive actions

0.839 0.939

Internal verifications (audits) are scheduled, aimed at verifying the correct implementation of

instructions/procedures and the compliance with applicable legal requirements related to the

environment

0.816 0.921

Cronbach’s alpha monitoring factor 0.902

Cronbach’s alpha comprehensive factor 0.883

Extraction method was principal component analysis


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required for valid hypothesis testing and is achieved by

plotting the non-parametric Kernel density estimator (Fan

and Gencay 1995), which reveals the symmetry of residual

distribution. We then checked the collinearity by comput-

ing the tolerance and variance inflationary factors (VIFs)

for all variables. Low variance inflation factors (\2.0) and

a VIF less than 5 revealed that multicollinearity was not

present (O’Brien 2007).Finally, we performed Harman’s one-factor test to check

for the presence of common method variance. This method

entails entering all the variables into an exploratory factor

analysis. If only a single factor emerges or it accounts for

the majority of covariance, it indicates that a substantial

amount of common method variance is present (Steensma

et al. 2005). The results showed at least five distinct factors

with an eigenvalue greater than 1.0 and the largest factor

accounted for approximately 18 % of the variance.

Results

Table 5 shows the robust regression results regarding the

internalization of EMS requirements. Model 1 includes

control variables alone, Model 2 adds institutional pres-

sures, and Model 3 shows the complete model including

strategic motivations. These three models support

Hypothesis 1, suggesting that, for most stakeholders, the

coefficient is positive and statistically significant. Focusing

on the stakeholder category, the models offer interesting

and surprising findings. In contrast with previous studies

(Henriques and Sadorsky 1996; Glachant et al. 2002;

Heras-Saizarbitoria et al. 2015), public authorities and

community environmental groups do not exert sufficient

pressure to push managers to increase efforts in integrating

EMS in strategic and operational activities. Thus,

Hypothesis 2 and 4 were not supported.

Suppliers, shareholders, banks, and other financial

institutions, exert a positive influence on EMAS adopters

leading them to fully integrate the requirements in firms’

routines and habits (coefficients vary from 0.16 to 0.23).

Hypothesis 5, 6, and 8 were, therefore, supported by our

model.

Pressures from customers and industrial associations

have, surprisingly, no effect on the decision of an organi-

zation to fully implement EMS requirements. Both coef-

ficients (-0.26 and -0.16) are negative and statistically

significant, respectively at 1 and 10 %. These findings

inversely support Hypothesis 3 and 8, which states that

these stakeholders have a positive effect on the decision of

an organization to internalize EMS requirements. This

means that the pressures from customers and industrial

associations are satisfied by the adoption of the official

recognition of registration alone, thus generating superfi-

cial behaviors by organizations.

Regarding the effect of strategic motivations on the full

implementation of EMS, our findings support Hypothesis 9

but not 10. The estimated coefficient of the cost savings

strategy variable is not significant, while the coefficient of

the variable measuring the adoption of a product quality-

oriented strategy is positive and statistically significant.Focusing on control variables, the empirical model

confirms that a full implementation of EMAS requires

efforts that a positive economic position of a company can

facilitate to sustain (Table 6 summarizes the results com-

pared to the study’s hypotheses).

Models 4, 5, 6, and 7 include the control and explana-

tory variables to assess their effects on the implementation

of the various EMAS pillars. Although the results highlight

the reliability of the previous considerations on the factors

influencing EMAS internalization, they reveal further

interesting information (see Table 7). Pressures from sup-

pliers and shareholders have a stronger influence on theimplementation of training, operational, and monitoring

actions, while they do not encourage the full adoption of

planning activities. Pressure from banks and financial

institutions has a positive influence on all EMAS pillars.

Pressure from customers has a negative influence on all

pillars except on training, where the estimated coefficient is

not significant. Similarly, pressures from industrial asso-

ciations negatively influence all pillars, although some

coefficients are weakly significant.

Unlike the combined model, Model 6 shows that the

estimated coefficient of pressure from public authorities is

positive and significant at 95 %. The influence of public

authorities on operational activities mainly derives from

inspection activities carried out by the competent authori-

ties as well as from references to EMS in the requirements

included in an environmental permit.

Discussion and Conclusions

The main objective of this paper was to analyze the

influence of institutional pressures and corporate strategy

in the internalization of environmental management prac-

tices related to EMAS requirements. The findings show

that, overall, pressures from stakeholders positively influ-

ence the internalization of proactive environmental prac-

tices, such as employee training, measurement of

environmental performances, and internal audits. Since

these practices are generally associated with an improve-

ment in environmental performance (Aragon-Correa and

Rubio-Lopez 2007; Berry and Rondinelli 1998; Buysse and

Verbeke 2003; Henriques and Sadorsky 1996), external

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T a b l e 4

C o r r e l a t i o n m a t r i x a n d d e

s c r i p t i v e s t a t i s t i c s ( 1

)

( 2 )

( 3 )

( 4 )

( 5 )

( 6 )

( 7

)

( 8 )

( 9 )

( 1 0 )

( 1 1 )

( 1 2 )

( 1 3 )

( 1 4 )

L e v e l o f i n t e r n a l i z a t i o n

–

I n fl u e n c e o f p u b l i c a u t h o r i t i e s o n e

n v i r o n m e n t a l

p r a c t i c e s

0 . 0

3

–

I n fl u e n c e o f c u s t o m e r s o n e n v i r o n m

e n t a l p r a c t i c e s

- 0 . 0

3

0 . 1

3 * *

–

I n fl u e n c e o f s u p p l i e r s o n e n v i r o n m

e n t a l p r a c t i c e s

0 . 0

7 2 2

0 . 2

5 * * *

0 . 3

9 * * *

–

I n fl u e n c e o f s h a r e h o l d e r s o n e n v i r o

n m e n t a l

p r a c t i c e s

0 . 1

4 * *

0 . 2

2 * * *

0 . 2

7 * * *

0 . 2

5 * * *

–

I n fl u e n c e o f b a n k s a n d o t h e r o f fi n a n c i a l

i n s t i t u t i o n s o n e n v i r o n m e n t a l p r a c t i c e s

0 . 1

2 *

0 . 2

0 * * *

0 . 2

2 * * *

0 . 3

1 * * *

0 . 4

1 * * *

–

I n fl u e n c e o f i n d u s t r i a l a s s o c i a t i o n s

o n

e n v i r o n m e n t a l p r a c t i c e s

0 . 0

6

0 . 2

6 * * *

0 . 1

7 * * *

0 . 4

2 * * *

0 . 2

5 * * *

0 . 3

2 * * *

–

I n fl u e n c e o f c o m m u n i t y g r o u p s o n

e n v i r o n m e n t a l

p r a c t i c e s

0 . 0

8

0 . 2

7 * * *

0 . 3

9 * * *

0 . 2

1 * * *

0 . 3

5 * * *

0 . 3

6 * * *

0 .

4 0 * * *

–

P r i c e a s a c o m p e t i t i v e f a c t o r

0 . 0

1

0 . 0

2

0 . 0

3

0 . 0

2

0 . 0

2

0 . 1

4 * *

0 .

0 5

0 . 0

3

–

Q u a l i t y a s a c o m p e t i t i v e f a c t o r

0 . 1

4 * *

- 0 . 1

8 * * *

0 . 0

7

0 . 0

5

0 . 0

3

0 . 0

5

0 .

0 5

- 0 . 0

4

0 . 0

8

–

N u m b e r o f e m p l o y e e s ( l o g a r i t h m )

0 . 1

6 * *

- 0 . 1

1 *

- 0 . 2

2 * * *

0 . 0

4

0 . 0

7

0 . 1

0 *

0 .

0 3

0 . 0

4

0 . 0

7

0 . 2

3 * * *

–

M a r k e t s c o p e ( l o c a l , n a t i o n a l , E u r o

p e a n ,

i n t e r n a t i o n a l )

0 . 1

0

- 0 . 1

6 * *

0 . 0

3

- 0 . 0

3

0 . 1

2 *

0 . 0

7

0 .

0 1

- 0 . 0

2

0 . 0

8

0 . 1

7 * * *

0 . 4

9 * *

*

–

M a n u f a c t u r i n g s e c t o r

0 . 0

1 2 4

- 0 . 2

5 * * *

- 0 . 0

7

- 0 . 0

6

- 0 . 0

8

- 0 . 0

1

-

0 . 0

1

- 0 . 0

7

0 . 0

3

0 . 1

7 * * *

0 . 1

8 * *

*

0 . 4

2 * * *

–

E c o n o m i c p e r f o r m a n c e

0 . 2

3 * * *

- 0 . 0

9

- 0 . 0

9

- 0 . 1

0 *

0 . 0

1

0 . 0

3

0 .

0 1

- 0 . 0

5

- 0 . 0

3

- 0 . 0

1

0 . 1

0

0 . 1

0

0 . 0

6

–

M e a n

- 2 . 0

9

2 . 0

4

1 . 7

1

1 . 4

7

1 . 6

0

1 . 3

5

1 .

5 1

1 . 6

8

2 . 5

8

2 . 7

7

4 . 3

3

2 . 5

2

0 . 4

5

3 . 5

7

S t a n d a r d D e v i a t i o n

1

0 . 8

3

0 . 8

4

0 . 6

8

0 . 8

3

0 . 6

3

0 .

7 0

0 . 7

9

0 . 5

9

0 . 6

3

1 . 9

3

1 . 1

1

0 . 4

9

1 . 0

3

M i n

- 5 . 5

2

1

1

1

1

1

1

1

1

1

0

1

0

1

M a x

0 . 9

9

3

3

3

3

3

3

3

3

3

1 1 . 4

4

1

5

N

2 3 6

2 4 3

2 4 3

2 4 3

2 4 3

2 4 3

2 4

3

2 4 3

2 4 2

2 4 2

2 4 3

2 4 3

2 4 3

2 4 0

* ,

* * ,

A n d * * * i n d i c a t e t h e s i g n i fi c a n c e a t 1 0 ,

5 , a n d 1 % , r e s p e c t i v e l y


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pressures would appear to have a positive influence on

corporate greening.

However, the study also showed that the various

stakeholders behind these pressures can play very different

roles. Shareholders, suppliers, banks, and other financial

institutions have a positive influence on the internalization

of the EMAS requirements. Conversely, customers and

industrial associations have a negative impact on EMAS

Table 5 Predicting internalization of EMS requirements

Independent variables Internalization of EMS requirements

Model 1 Model 2 Model 3

Coefficient Standard

Error


Error


Error

Influence of public authorities on environmental practices 0.075 0.086 0.114 0.091

Influence of customers on environmental practices -0.246*** 0.096 -0.261*** 0.097

Influence of suppliers on environmental practices 0.233** 0.128 0.212** 0.127

Influence of shareholders on environmental practices 0.166** 0.074 0.158** 0.0743

Influence of banks and other of financial institutions on

environmental practices

0.205** 0.089 0.201** 0.088

Influence of industrial associations on environmental practices -0.139* 0.10 9 -0 .163* 0.104

Influence of community groups on environmental practices -0.037 0.107 -0.012 0.096

Price as a competitive factor -0.075 0.105

Quality as a competitive factor 0.349** 0.197

Number of employees (logarithm) 0.323 0.038 0.066* 0.037 0.053* 0.037

Market scope (local, national, European, international) 0.058 0.076 0.012 0.070 0.005 0.068

Manufacturing sector -0.078 0.146 -0.020 0.150 -0.058 0.151

Economic performance 0.153** 0.060 0.159*** 0.054 0.166*** 0.054

Constant -0.796*** 0.287 -1.228*** 0.342 -1.945*** 0.621

F test ** *** ***

R2 0.0409 0.1226 0.1531

Number of observations: 232

Heteroskedasticity-robust standard errors are shown

*, **, And *** indicate the significance at 10, 5, and 1 %, respectively

Table 6 Summary of the study’s results

Hypothesis 1 Organizations that endure greater institutional pressures, experience a higher internalization

of EMAS requirements

Supported

Hypothesis 2 Organizations that endure greater pressures from public authorities experience a higher

internalization of EMAS requirements

Not supported

Hypothesis 3 Organizations that endure greater pressures from industries and trade association experience

a higher internalization of EMAS requirements

Inversely supported

Hypothesis 4 Organizations that endure greater pressures from community environmental groups

experience a higher internalization of EMAS requirements

Not supported

Hypothesis 5 Organizations that endure greater pressures from shareholders experience a higher


Supported

Hypothesis 6 Organizations that endure greater pressures from banks and financial institutions experience

a higher internalization of EMAS requirements

Supported

Hypothesis 7 Organizations that endure greater pressures from customers experience a higher


Inversely supported

Hypothesis 8 Organizations that endure greater pressures from suppliers experience a higherinternalization of EMAS requirements

Supported

Hypothesis 9 A cost-saving strategy encourages the internalization of EMAS requirements Not supported

Hypothesis 10 A product quality-parented strategy encourages the internalization of EMAS requirements Supported

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internalization. Drawing on neo-institutional and institu-tional complexity theories (Westermann-Behaylo et al.

2014; Greenwood et al. 2011; Pache and Santos 2010;

Boiral 2007; Yin and Schmeidler 2009), these differences

in the impacts of external pressures on EMAS internal-

ization can be explained by the specific practices and belief

systems associated with various stakeholders. The expec-

tations, values and goals of stakeholders with regard to the

adoption of certifiable EMSs can be very different. As a

result, various measures can be implemented by organi-

zations to improve their legitimacy, including in terms of

EMS internalization or greenwashing. Moreover, the

stakeholder knowledge of corporate commitment to theenvironment and EMS internalization is variable. Few

studies have shown that the visibility or opacity of corpo-

rate environmental issues significantly influence the

implementation and effectiveness of ISO 14001 (Bansal

and Bogner 2002; Potoski and Prakash 2013). In this per-

spective, the more environmental practices are visible and

in line with the values and expectations of a specific

stakeholder, the more it tends to positively influence the

internalization of certifiable EMSs such as the EMASstandard.

The positive impact of shareholder pressures can be

explained by their ability to access relevant information on

corporate environmental commitment and performance in

this area. In addition, shareholders may encourage man-

agers to demonstrate their accountability in terms of sus-

tainability through the internalization of certifiable EMSs,

which are expected to improve economic performance and

enhance corporate image (Bansal and Hunter 2003; Darnall

et al. 2008; Russo 2009). The same applies to financial

institutions, which attach increasing importance to the

control of environmental risks and improvement of envi-ronmental performance (Ambec and Lanoie 2008). The

positive impact of suppliers can be explained by the

increasing interdependence between the greening of supply

chain management and the internalization of EMS

(Nawrocka 2008; Testa and Iraldo 2010). For example,

suppliers can facilitate the use of greener raw materials and

facilitate the achievement of EMAS objectives related to

resources consumption.

Table 7 Predicting internalization of different pillars of EMS requirements

Model 1 internalization

of requirements on

planning


of requirements on

training and employee

involvement


of requirements on

operational activities


of requirements on

monitoring and

checking


error


error


error


error

Influence of public authorities 0.043 0.088 -0.024 0.082 0.208** 0.092 0.084 0.095

Influence of customers -0.231** 0.099 -0.005 0.080 -0.293*** 0.104 -0.197** 0.101

Influence of suppliers 0.090 0.130 0.224** 0.108 0.189** 0.128 0.176** 0.119

Influence of shareholders 0.037 0.078 0.159** 0.081 0.180*** 0.082 0.137** 0.071

Influence of banks 0.194** 0.103 0.168** 0.109 0.118** 0.104 0.194** 0.084

Influence of industrial associations -0.052* 0.108 -0.110* 0.105 -0.078* 0.105 -0.241** 0.104

Influence of community groups 0.083 0.101 -0.039 0.099 -0.046 0.104 -0.043 0.095

Price as a competitive factor -.144* 0.111 -0.068 0.104 -0.022 0.105 -0.022 0.107

Quality as a competitive factor 0.417** 0.193 0.330*** 0.141 0.228** 0.102 0.274** 0.101

Number of employees (logarithm) -0.004 0.043 0.102*** 0.039 0.041 0.038 0.060* 0.035

Market scope (local, national,

European, international)

0.028 0.078 0.038 0.074 -0.031 0.065 -0.001 0.068

Manufacturing sector -0.056 0.162 0.288** 0.144 0.091 0.147 -0.087 0.156

Economic performance 0.117*** 0.058 0.170*** 0.058 0.160*** 0.059 0.115*** 0.053

Constant -1.449*** 0.678 -2.283*** 0.535 -1.74*** 0.605 -1.469*** 0.630

F test *** *** *** ***

R2 0.1060 0.2039 0.1409 0.1130

Number of observations: 232

Heteroskedasticity-robust standard errors are shown

*, **, And *** indicate the significance at 10, 5, and 1 %, respectively


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Although the negative influence of customer pressures

seems to contradict several studies on their role in the

implementation of EMS (Christmann and Taylor 2006;

Fryxell et al. 2004; Guoyou et al. 2012), it can be explained

by their lack of information on real environmental practices

and the commercial use of the EMAS standard. Given the

globalization of economies, today’s market pressures come

from increasingly distant customers, who tend to perceivecertifiable EMS as a sort of ‘‘commercial certificate’’ rather

than a tool to improve environmental practices. These

customers are not able to verify the internalization of EMS

in a direct way (e.g., through inspections or audits), so they

tend to trust and rely on the existence of certificates such as

EMAS and ISO 14001, more than being interested in how

they are applied. Finally, the negative role of pressures

from industrial associations was unexpected and may be

due to their lack of involvement in the implementation of

the EMAS standard. Moreover, the values of these asso-

ciations are not necessarily in line with those of corporate

greening and some associations can even lobby to limit orcounteract environmental pressures (Van Halderen et al.

2014; Gray and Milne 2002).

These findings show that institutional pressures are not

monolithic and need to be analyzed in relation to the dif-

ferent stakeholders involved. The study also shows the role

of generic corporate strategy on the integration of a certi-

fiable EMS. As expected, a product quality strategy

encourages the internalization of EMAS requirements. This

finding is in line with the literature on the interconnection

between environmental and quality management (Berry

and Rondinelli 1998; King and Lenox 2001; Roy et al.

2001, 2013). However, a cost-saving strategy has no sig-

nificant impact on this internalization. This negative role

can be explained by the perception of managers concerning

the relationships between environmental initiatives and

economic performance. Contrary to the mainstream liter-

ature on environmental management (Darnall and Edwards

2006; Darnall et al. 2008; Hart 1995; Sharma and Vre-

denburg 1998; Russo 2009), many managers are not con-

vinced by this optimistic relationship. The difficult

economic situation of many European regions at the time

of the study may have strengthened the perception that the

internalization of EMS is not a priority and could even

represent a threat to cost-reduction efforts.

Contributions to the Literature

The study contributes to the literature in several ways.

Firstly, the study contributes to the literature in terms of

the neo-institutional approaches of environmental man-

agement (Boiral 2007; Christmann and Taylor 2006;

Heras-Saizarbitoria et al. 2011, 2013; Yin and Schmeidler

2009) by shedding further light on the complexity and

diversity of the external pressures to adopt and internalize

certifiable EMSs. These different implications suggest that

institutional pressures are not isomorphic but follow dif-

ferent logics which companies need to adapt in different

ways. Depending on the stakeholders involved, this adap-

tation encourages a substantial or a symbolic implemen-

tation of environmental practices.

To our knowledge, institutional complexity theory hasnot been used to explain the heterogeneous internalization

of certifiable EMSs. The use of this theory helps bridge the

gap between the neo-institutional approach of EMS, which

is based on the substantial vs ceremonial adaptation to

external pressures to increase corporate legitimacy, and the

stakeholder theory, which is focused on the management of

relationships with different stakeholders (Buysse and

Verbeke 2003; Delmas 2001; Henriques and Sadorsky

1999). Although the study does not provide specific

information on the nature of these relationships, it shows

that the level of internalization of environmental practices

depends on the influence of the specific stakeholders.Secondly, the study contributes to the literature on

greenwashing and to the call of Bowen and Aragon-Correa

(2014) for more research on symbolic corporate environ-

mentalism and greenwashing. This symbolic environmen-

talism is reflected in the superficial adoption of certifiable

EMS. Paradoxically, the main objective of the certification

process is to increase the credibility of EMSs and

strengthen their substantial implementation (Darnall 2006;

Prakash and Potoski 2014; Potoski and Prakash 2005).

According to the critical literature on external auditing,

certification practices do not necessarily guarantee the

compliance of organizations with certifiable standards and

the internalization of the EMS in daily activities (Boiral

2007; Dogui et al. 2014; Heras-Saizarbitoria et al. 2013).

The heterogeneous adoption of the EMAS standard

observed in our study confirms that the certification process

is not sufficient in itself to guarantee the substantial

implementation of environmental management practices,

and may even be used as a tool for greenwashing. This

greenwashing depends on the gap between the green and

rigorous image conveyed by EMSs such as EMAS, and the

lack of real internalization of environmental practices

within certain organizations. In addition, this gap can vary

considerably despite the monolithic and isomorphic

appearance of EMAS-related practices.

Thirdly, the study contributes to the literature on the

economic impacts of environmental practices. The absence

of significant relationships between the pursuit of cost-

saving strategies and EMS internalization tends to question

the dominant win–win view of the environmental-eco-

nomic relationships (Ambec and Lanoie 2008; Darnall

et al. 2008; Roy et al. 2001; Russo 2009). The findings of

our study suggest that the environmental practices

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http://dx.doi.org/10.1007/s10551-014-2400-8

http://dx.doi.org/10.1007/s10551-014-2400-8



http://dx.doi.org/10.1007/s10551-014-2400-8

http://dx.doi.org/10.1007/s10551-014-2400-8

Testa Et Al 2015

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