How to Reconcile Environmental and Economic Performance to Improve Corporate Sustainability: Corporate Environmental Strategies in the European Paper Industry

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Authors

This paper discusses the relationship between environmental and economic performance and the influence of corporate strategies with regard to sustainability and the environment. After formulating a theoretical model, results are reported from an empirical analysis of the European paper manufacturing industry. New data are used to test hypotheses derived from the theoretical model, using environmental performance indices representing different corporate environmental strategy orientations. In particular, an emissions-based index largely reflecting end-of-pipe strategies and an inputs-based index reflecting integrated pollution prevention are distinguished. For the emissions-based index, a predominantly negative relationship between environmental and economic performance is found, whereas for the inputs-based index no significant link is found. This is consistent with the theoretical model, which predicts the possibility of different relationships. The results also show that for firms with pollution prevention-oriented corporate environmental strategies, the relationship between environmental and economic performance is more positive, thus making improvements in corporate sustainability more likely. Based on this last insight, managerial implications of this are discussed with regard to strategy choices, investment decisions and operations management.

Original languageEnglish
JournalJournal of Environmental Management
Volume76
Issue number2
Pages (from-to)105-118
Number of pages14
ISSN0301-4797
DOIs
Publication statusPublished - 07.2005

Bibliographical note

Funding Information:
I would like to thank three anonymous reviewers for their very helpful comments and suggestions. Valuable comments from Joachim Wagner (University of Lüneburg), Théophile Azomahou and Phu Nguyen Van (University of Strasbourg) as well as Walter Wehrmeyer (University of Surrey) are gratefully acknowledged. Also I would like to thank my colleagues at the Centre for Sustainability Management, University of Lüneburg for providing input during various seminars. Funding for part of this research was provided under the European Commission Environment and Climate Research Programme, contract no. ENV4-CT97-0655.