Standardize Environmental Policies to Lessen Shareholder Pressure

NBS September 27, 2017
Multinational corporations are standardizing their environmental policies worldwide based on pressures from government, industry and consumers. Managers can respond to these pressures in 3 ways: 1) Set minimum global performance standards; 2) Use codes of conduct of successful competitors, and 3) Give consumers the same message about environmental actions. Doing so will also help managers comply with regulation, keep up with competition and improve reputation.

Background

International environmental regulation is increasing, industries are setting norms for environmental conduct and consumers are considering the environment when making purchasing decisions. This study explores the questions: Do companies adapt environmental policies to local regulations to exploit lower standards in some countries? Or do they standardize their policies worldwide?

Findings

Implications for Managers

Implications for Researchers

Further research could explore how stakeholder demands affect conduct beyond chemical companies in the U.S. It could also look at whether improved company performance is due to global business strategies or a standardized environmental policy.

Methods

Multiple regression analysis was conducted on data collected from 87 mail questionnaire surveys, administered to headquarters of 72 MNCs in the chemical industry in the United States. Each had operations with sales of at least $100 million in 1995.
Christmann, P. (2004). Multinational Companies and the Natural Environment: Determinants of Global Environmental Policy Standardization. Academy of Management Journal, 47 (5): 747-760. 

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