Environmental Proactivity: An Economic Booster for Firms?

[We’re pleased to welcome Jesús Valero-Gil of University of Zaragoza. Professor Valero-Gil co-authored an article with Pilar River-Torres, Concepcion Garces-Ayerbe, and Sabina Scarpellini of University of Zaragoza in the September 2015 issue of Organization & Environment entitled “Pro-Environmental Change and Short- to Mid-Term Economic Performance: The Mediating Effect of Organisational Design Change” .]

 The relationship between environmental proactivity and financial results in firms has been widely studied, and different conclusions have been obtained. Both from a theoretical and an empirical perspective, numerous authors have come to different and opposite results. This phenomenon inspired a new work in the topic. Given this lack of consensus, the idea that the relationship between environmental and financial performance is not as obvious as it might seem arises. The complexity of the relationship between pro-environmental measures and performance, suggesting that there are certain moderating and mediating variables in this relationship.

The abstract:

The aim of this study is to contribute empirically to the understanding of the economic effects of pro-environmental change in firms. First, we analyse whether pro-environmental changes performed in different sections of firms’ value chain (products, processes and supply and distribution channels) generate positive economic returns in the short- to mid-term. Second, we analyse whether measures implemented by firms to improve environmental performance (pro-environmental change) have been complemented with changes in organisational design, and whether these changes help increase short- to mid-term economic performance. Through an analysis of a sample of 303 firms, we have collected empirical evidence that confirms that pro-environmental change improves short- to mid-term business performance both directly and indirectly, through the mediating effect of improvements in organisational design that often go hand in hand with these processes.

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