Bunching with the Stars: How Firms Respond to Environmental Certification

Voluntary environmental certification programs have been a popular tool used by governments, industry groups, and nonprofit organizations alike. A central question in the design of such programs is who should pay for them. In a context where firms respond strategically to a certification, the answer to this question is a priori ambiguous and, ultimately, empirical. This paper provides important insights on this question using ENERGY STAR, a voluntary certification program for energy-efficient products, as a case study. I show that firms are highly strategic with respect to this certification and extract consumer surplus associated with certified products via three mechanisms. They offer products that bunch at the certification requirement, differentiate certified products in the energy and nonenergy dimensions, and charge a price premium on certified products. I use these findings to motivate a structural econometric model with firms’ strategic behaviors with respect to product line and pricing decisions and to investigate the incidence of a certification licensing fee to fund the certification program. This paper was accepted by Juanjuan Zhang, marketing.

Cultural landscape management through the application of environmental certifications

Environmental certifications are a tool that aims to measure and evaluate the environmental quality of buildings and their surroundings, with potential collaboration in urban planning. Among the various cultural landscapes that constitute the cities, the historical landscapes can report unique images of urban places, acting as testimonies of the past, which establish connections with the present and serve as reference for the construction of the future. Thus, the need to work the heritage field in sustainable urban management policies is demonstrated. Based on analytical research in the fields of environmental certification and cultural landscape, and documentary research on the Urban-Landscape Set on Avenida Köeler, in the Historic Center of Petrópolis/RJ, the possibility of certifying the set through AQUA/HQE - Neighborhoods was assessed. The aim of this study is to investigate the potential of the environmental certification instrument with regard to the maintenance of historical and cultural values ​​and to the physical conservation of this complex. In addition to meeting the objectives and indicators, the opportunity to establish an urban management program to achieve with excellence the performance of high environmental quality is evident. This study also shows that when analyzing the certification guidelines, as far as the cultural dimension is concerned, a review is needed to better cover the heritage issue, to establish specific guidelines for the conservation of existing landscapes as an incentive to the preservation and promotion of urban quality for current and future generations.

Residents’ perceptions of environmental certification, environmental impacts and support for the world expo 2015: the moderating effect of place attachment

Purpose Based on social exchange theory (SET) and signaling theory (ST), this study aims to evaluate how an event’s perceived environmental certification (PEC) by residents, affect their evaluations of environmental impacts and subsequent event support (ES). The moderating role of place attachment (PA) on some of these relationships is also evaluated. Design/methodology/approach Using partial least square structural equation modeling (PLS-SEM), a theoretical model is tested on a sample of 450 residents who attended the 2015 Milan World Expo. Findings PEC positively affects evaluations of positive environmental impacts (PEI) but negatively affects evaluations of negative environmental impacts (NEI). PEC positively affects ES while the relationship between PEC and NEI is moderated by PA. Research limitations/implications Items used to measure PEC, PEI and NEI are not exhaustive. SET has its own limitations in explaining residents’ ES, which the authors have attempted to attenuate by using ST. Practical implications Using environmental certification as a communication tool must demonstrate to residents how it reduces negative externalities, rather than focusing only on its positive community benefits. Less well-educated residents had the lowest ES, suggesting the need to use social media to increase ES. Originality/value This study contributes to understandings of the perceptions of the benefits of event certification by residents, and how this affects their ES. PA moderates the relationship between PEC and NEI.

Environmental disclosure on mandatory and voluntary reporting of Portuguese listed firms: the role of environmental certification, lucratively and corporate governance

Purpose This study aims to construct two environmental disclosure indices (EDI), one obtained from the mandatory reporting (annual report) and the other from the voluntary reporting (sustainability report), to compare their evolution. In addition, the authors developed and evaluated a conceptual model that aims to analyse if the two EDI are affected by industry, environmental certification, lucratively and corporate governance attributes. The legitimacy, signalling and voluntary disclosure theories are used to support the theoretical relationship between the company’s characteristics, corporate governance and environmental disclosure. Design/methodology/approach Using the content analysis technique, the authors have developed two indices to assess the level of environmental disclosure in the companies’ mandatory and voluntary reporting. In addition, to analyse the determinants of EDI, the authors applied the technique of multiple linear regression using panel data. Findings Based on Portuguese listed companies (Euronext-Lisbon), the results, from 2015 to 2017, exhibited an increase of 14.6% and 25.8% for the EDI obtained from the annual reports and for EDI obtained from the sustainability reporting, respectively. In addition, the results revealed that the environmental certification, lucratively, number of members on board and number and proportion of women of the board directors tend to affect the annual reporting EDI. Regarding the sustainability reporting EDI, the results showed that the environmental certification, lucratively and proportion of independent members of the board of directors have an impact on it. Research limitations/implications The study focuses on quantitative rather than qualitative disclosures and it brings some insights to the theoretical field. Practical implications The results obtained can assist corporate decision-making processes regarding the improvement of environmental disclosure, both on the mandatory annual report and on voluntary sustainability reports. Originality/value This study brings new perspectives to this topical issue in accounting. Originally, this study is applied to Portuguese listed companies and it shows different trends and determinants of environmental disclosure when included in the annual reporting or sustainability reporting.

Social and Economic Outcomes of Fisheries Certification: Characterizing Pathways of Change in Canned Fish Markets

The Marine Stewardship Council (MSC) eco-labeling program provides fisheries a pathway to demonstrate their sustainability by undergoing an environmental certification. Like other standard-setters, the MSC’s ‘theory of change’ presumes that markets use this information to select for sustainable products, providing an incentive for producers to improve their practices and become certified. However, the underlying mechanisms which actually work to link market behavior and participation in the program in different contexts have not been systematically identified. We draw on broad MSC field experience to identify processes that have supported the theory of change in individual fisheries. Then, we develop a broadly applicable rapid assessment protocol, relying on a semi-structured interviews of key informants, to gather systematic evidence for key dynamics within the theory of change: the effects of going through MSC certification on market processes, partnerships in the fishery, and governance. In a pilot test of the protocol, we identify important common and idiosyncratic processes in three canned product fisheries: United States west coast albacore tuna, Brittany sardines, and Portuguese sardines. We find that the harvesters and buyers/processors in these fisheries sought certification primarily to expand or maintain their market share, and that certification was synergistic with stakeholder cooperation. The cases demonstrate how our rapid assessment interviews allow program participants to relate their experience in their own words yet facilitate systematic comparison to identify common mechanisms within the theory of change. We propose its wider application to systematically advance our understanding of social and economic processes that drive of eco-label interventions in different geographies and supply chains around the world.

The circular economy, environmental performance and environmental management systems: the role of absorptive capacity

Purpose Despite the general interest in the circular economy, organisations have difficulties in implementing circular practices. Developing absorptive capacity (ACAP) may foster circularity among organisations. The paper aims to shed light on relationship between ACAP and organisational performance. Design/methodology/approach To empirically investigate the contribution of ACAP in circular economy implementation, the authors analysed a European sample of more than 800 Eco-Management and Audit Scheme-registered organisations through partial least squares structural equation modelling. Findings The analysis demonstrates that ACAP and the underlying organisational activities of a firm significantly facilitate the implementation of a circular economy and the internalisation of an environmental management system (EMS), which consequently improve the overall performance of organisations. The authors found that the diffusion of the circular economy in the organisations’ environment does not affect their commitment to implement a circular economy. Originality/value The study expands the academic literature by framing the concept of the circular economy with ACAP theory, thereby highlighting the contribution of acquisition, assimilation, transformation and exploitation. The results also provide useful insights for practitioners highlighting how organisations with an environmental certification can identify and pursue opportunities deriving from a circular economy. Finally, the research contributes to the debate on the effect of internalising EMSs and how ACAP improves economic performance, environmental performance and reputation.

The Impact of ISO 14001 environmental standards on exports

Analyses that examine the role of international standards on export performance has been concentrated on quality certifications. Very little is known about the impact of environmental certifications on exports. In this paper we employ firm-level data from Ecuador to assess the impact of the ISO 14001 environmental certification on export outcomes. The results show that holding an ISO 14001 increases the likelihood of becoming an exporter by 0.31 percentage points (equivalent to 4%), and that this positive effect is concentrated among large firms. We did not find evidence that the environmental certification has a causal impact on the level or the growth rate of exports. Consequently, the results suggest that the ISO 14001 certification is most useful in reducing information frictions, allowing firms to initiate export transactions.

Economic and legal measures for ensuring the economy greening in post-pandemic period

The purpose of the study was to develop economic and legal measures to create a green economy model by assessing the effectiveness of greening tools. To achieve the goal it was necessary to solve several problems. Firstly, to evaluate the effectiveness of greening tools using expert analysis techniques. Secondly, to develop measures to ensure the economy greening through the use of the most effective greening tools. Theoretical basis. The economy greening is extremely important, especially in the post-pandemic period - a period of intensive economic recovery, which might contribute to the strengthening of environmental problems. Accordingly, the study aims to identify the most effective tools for greening to develop measures for the ecologigaly healthy economic recovery in the post-pandemic period. Scientific novelty. The effectiveness of greening tools was evaluated and several economic and legal measures were developed, which will contribute to the economy greening intensification. Conclusions. The study proposed to intensify the economy greening by using the most effective greening tools whose effectiveness was assessed by using expert analysis. The most effective greening tools were identified: environmental taxes, quotas, environmental funds, environmental audit, and environmental certification. Based on the results of the study, several economic and legal measures for economy greening in the post-pandemic period were developed.

Adoption of environmental standards and a lack of awareness: evidence from the food and beverage industry in Vietnam

Voluntary approaches to environmental policy can contribute to stemming environmental degradation in developing countries with weak institutions. We evaluate the role of a lack of awareness of a law in explaining the voluntary adoption of environmental certification by small and medium enterprises (SMEs) in the food and beverage industry in Vietnam. We find that firms, where owners or managers were unaware of the law were 38 percentage points less likely to receive environmental certification. Moreover, this effect is larger for firms that exported, had internet access or paid bribes, and it is weaker for household enterprises. Our results suggest that increasing legal awareness can weaken informational constraints for SMEs, where weak institutions and a lack of information often hamper the uptake of environmental policy initiatives.