Do firm-level sustainability targets drive environmental innovation? Insights from BRICS Economies

Subhan Ullah; Asma Nasim

doi:10.1016/j.jenvman.2021.112754

Do firm-level sustainability targets drive environmental innovation? Insights from BRICS Economies

J Environ Manage. 2021 Sep 15:294:112754. doi: 10.1016/j.jenvman.2021.112754. Epub 2021 Jul 12.

Authors

Subhan Ullah¹, Asma Nasim²

Affiliations

¹ Department of Accounting, Nottingham University Business School, University of Nottingham, Jubilee Campus, Nottingham, UK. Electronic address: subhan.ullah@nottingham.ac.uk.
² Huddersfield Business School, University of Huddersfield, UK. Electronic address: asma.nasim@hud.ac.uk.

PMID: 34265739
DOI: 10.1016/j.jenvman.2021.112754

Abstract

This paper examines the relationship between sustainability targets and their impacts on corporate environmental innovation. Using data over the period 2009-2018 on 202 companies from BRICS countries, covering firm-level governance, social responsibility and sustainability this paper examines firm-level sustainability targets, and incentives encourage managers to engage in more environmentally friendly activities. Using panel data probit regression, and after controlling for country-level governance and institutional factors, the study finds that embedding environmental targets in corporate strategy does encourage corporate managers to design and develop eco-friendly products and services, and such firm-level commitments at the top motivates managers to promote, market, and label environmentally friendly products. The findings call for greater emphasis on aligning executive compensation with sustainability targets rather than focusing too much on short-term accounting and market-based measures of firm performance.

Keywords: Environmental innovation; Environmental strategy; Sustainability targets.

MeSH terms

Organizations*
Social Responsibility*