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This study investigates the proactive environmentalism in the Indian industry. The study aims to identify the determinants of proactive environmental practices in India firms and empirically assess the motivations for implementing environmental management practices. Further, the impact of comprehensiveness of environmental management system (EMS) practices on firm’s performance (environmental benchmarking and business performance) has also been studied. Drawing on the perspectives from stakeholder, resources based view and institutional theories, a conceptual framework has been developed depicting the influence of stakeholder pressures and different motivational forces on firm’s environmental practices. The framework also links the impact of EMS practices on firms’ environmental performance benchmarking and business performance. For this purpose, primary empirical data has been drawn from a comprehensive research survey and field interviews of Indian firms comprising of 104 small, medium and large enterprises grouped into four sectors i.e. manufacturing, agriculture, chemical and service. The theoretical relationships have been empirically analyzed by applying various statistical tools.
The study reveals that apart from the expected characteristics of the firms such as size and sector, internal and market stakeholders are significant drivers that lead to the adoption of environmental management practices in Indian business organizations. The study signifies that although market pressures encourage firms to decrease their environmental impact, the household consumers do not significantly affect the adoption of EMS practices. The results however, show that neither regulatory pressure nor societal stakeholders are found to be significant driving factors that contribute to the adoption of proactive environmental initiatives in Indian firms. It implies that the lax environmental regulation and enforcement in developing countries may affect the adoption of the EMS practices. Investigation of motivational factors reveals that firms consider neither innovational nor operational motivations as significant factors to proactive environmentalism. Instead, firms are motivated to adopt EMS practices to improve image, relationship and also to remain competitive in business.
The study also evaluates empirically the broader relationship between an organization’s environmental proactivity and its performance. The results signify that status of EMS implementation significantly affects the adoption of environmental benchmarking practices. The analysis reveals that firms, which are practicing environmental benchmarking, are expected to have significantly improved environmental performance compared to their competitors. The results further imply that firms which adopted EMS practices are expected to have better business performance. Another significant feature of the research is development of a new measure of environmental management performance (EMP) which provides a broader and inclusive assessment of comprehensiveness of adopted environmental management practices based on plan-do-check-act (PDCA) model. This attempt of using the PDCA approach has been applied for the first time to measure EMP. Results show that EMP measure based on PDCA provides a comprehensive measurement of EMP compared to existing measure of EMP and could be used for internal benchmarking of environmental management systems.
The major contribution of this research lies in understanding the drivers of proactive environmentalism in Indian industry based on different theoretical perspectives. It establishes the link between comprehensiveness of EMS practices and firm’s performance. This could help the policy makers and managers to formulate their environmental policies and strategies to respond to the expectations of diverse group of stakeholders and to avoid the environmental risks associated with their operations.
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