Advanced Natural Resources Stewardship and Environmental Advocacy

Research article

The comprehensiveness of environmental management systems: The influence of institutional pressures and the impact on environmental performance

Thanh Nguyet Phan a, *, Kevin Baird b a School of Business, University of Western Sydney, Parramatta Campus, Locked Bag 1797, Penrith South DC, NSW 2751, Australia b Faculty of Business and Economics, Macquarie University, NSW 2109, Australia

a r t i c l e i n f o

Article history: Received 9 October 2014 Received in revised form 28 May 2015 Accepted 4 June 2015 Available online 14 June 2015

Keywords: Environmental management system Environmental performance Institutional theory

a b s t r a c t

This study contributes to the EMS literature by providing a more detailed insight into the comprehen- siveness of environmental management systems (EMSs) by focusing on the intensity of use of envi- ronmental management practices. In addition, the study examines the influence of institutional pressures (coercive, mimetic and normative) on the comprehensiveness of environmental management systems (EMSs), and the impact of EMS comprehensiveness on environmental performance. A mail survey questionnaire was used to collect data from a random sample of Australian senior managers across various industries. Both coercive and normative pressures were found to influence the compre- hensiveness of EMSs. Specifically, the pressure exerted by the government, through the creation of appropriate regulatory pressures and public incentives, and by employees, customers, professional groups, the media, and community, influenced the comprehensiveness of the EMS. In addition, organi- sations with more comprehensive EMSs were found to experience higher levels of environmental per- formance. With more than 300,000 organisations worldwide adopting EMSs (ISO, 2013), the findings provide an important insight into the relevance of EMSs. In particular, it is suggested that organisations should endeavour to implement a more comprehensive EMS and be conscious of the role that coercive and normative pressures play in influencing the comprehensiveness of their EMSs.

© 2015 Elsevier Ltd. All rights reserved.

1. Introduction

Increasing attention and concern over the environmental impact of business has led organisations to actively seek ways to minimise their exposure to environmental risk and take a proactive approach to environmental management. The pressure exerted on organisations to improve their environmental management can be attributed to regulatory bodies, increased public awareness and media coverage of environmental issues, and organisations’ awareness of the need to improve efficiency through reducing environmental costs (Tinsley and Pillai, 2006; Deegan, 2003; Sullivan and Wyndham, 2001).

A growing number of businesses have invested significant re- sources in the implementation of an environmental management system (EMS), a systematic approach which requires the

integration of environmental issues into every aspect of business management (Tinsley and Pillai, 2006). By 2005, more than 111,000 organisations worldwide had adopted and certified their EMSs to the international environmental management standard ISO 14001 (ISO, 2013), and thousands more had adopted other types of EMSs (Darnall et al., 2008a). The number of ISO14001 compliant EMSs had increased to 301,647 in over 170 countries around the world by 2013 (ISO, 2013).

While many authors advocate the merits of EMSs (Tinsley and Pillai, 2006; Sullivan and Wyndham, 2001; Steger, 2000), empir- ical studies have been inconsistent in respect to the approach used to define and operationalize EMSs. The majority of studies have incorporated a simplistic approach of inquiring whether or not an organisation has adopted an EMS. Such an approach is problematic given respondents have different interpretations of the exact na- ture of an EMS. Furthermore, even if the users of an EMS were successfully captured, this approach ignores the comprehensive- ness of the EMS (Edwards and Darnall, 2010) and hence, fails to distinguish between EMS users. Alternatively, other studies

* Corresponding author. E-mail address: [email protected] (T.N. Phan).

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Journal of Environmental Management

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Journal of Environmental Management 160 (2015) 45e56

(Johnstone and Labonne, 2009; Anton et al., 2004; Khanna and Anton, 2002) have used the total number of environmental prac- tices implemented by organisations as a proxy for the compre- hensiveness of EMSs. While this approach is better in the sense that it explores the nature of the environmental management practices utilised by organisations, it fails to take into account variations in the intensity with which specific practices are used by different organisations. Accordingly, this approach provides an opportunity to ‘green wash’ with organisations able to create the impression that they are committed to a number of environmental practices without really engaging in environmental management activities (Cho and Patten, 2007; O'Dwyer, 2002).

Since EMSs are developed in different organisational settings and organisations follow different types of EMS (Darnall et al., 2008b), it is expected that they differ across organisations in respect to the comprehensiveness of their coverage (Anton et al., 2004). Accordingly, the first objective of this study is to attempt to overcome the limitations of previous studies by providing a more detailed insight into the nature of EMSs within organisations. Specifically, we operationalize the comprehensiveness of EMSs in respect to the intensity of use of nine environmental practices identified as important components of an EMS in the literature (Anton et al., 2004; Henriques and Sadorsky, 2007a).

In conjunction with the incorporation of an improved approach of measuring EMS comprehensiveness, the study also aims to contribute to the contingency based literature examining the an- tecedents or determinants of EMS comprehensiveness. Previous literature has examined the association between organisational factors such as size (Edwards and Darnall, 2010; Gonz!alez-Benito and Gonz!alez-Benito, 2006), quality management systems (Johnstone and Labonne, 2009; Henriques and Sadorsky, 2007a), financial resources (Clarkson et al., 2011; Johnstone and Labonne, 2009), and management capabilities (Sangle, 2010; Delmas and Toffel, 2004) with the use of EMSs and other proactive environ- mental management initiatives. Other research has investigated the influence of the institutional pressures exerted by a variety of stakeholders such as government (Zhu et al., 2013; Uchida and Ferraro, 2007; Delmas and Toffel, 2004), customers (Sangle, 2010; Khanna and Anton, 2002; Darnall et al., 2000), employees (Darnall et al., 2010; Kirkland and Thompson, 1999), and the community (Sarkis et al., 2010; Henriques and Sadorsky, 1996) on environmental management initiatives.

Many authors such as Schaefer (2007) and Delmas (2002) indicate that institutional pressures are the predominant driver of the adoption of proactive environmental practices. Accordingly, this study places emphasis on the effect of institutional pressures on EMS comprehensiveness. The extant literature has tended to focus on the impact of specific stakeholder groups on the use of environmental management initiatives. Rather than concentrating on specific stakeholders, this study contributes to the literature by utilising DiMaggio and Powell's (1983) theoretical construct of institutional isomorphism to gain an insight into the influence of an organisation's overall institutional environment.

Given the majority of studies in the extant literature are pre- scriptive (Delmas and Toffel, 2004; Delmas, 2002) and/or adopt a case-based approach (Schaefer, 2007; Darnall et al., 2000), the second objective of the study is to contribute to the literature by adopting an empirical approach to examine the influence of insti- tutional pressures on the comprehensiveness of EMSs. Further, since the few extant empirical studies are limited to large US or European organisations operating in the manufacturing industry (Yu and Ramanathan, 2014; Boiral and Henri, 2012; Anton et al., 2004; Henriques and Sadorsky, 1996), this study addresses the dearth of studies examining this relationship in alternate industries in Australia.

Finally, in response to Yu and Ramanathan's (2014) claim that there is a research gap in the literature regarding the clarification of the effect of environmental management practices on environ- mental performance, the third objective of the study is to investi- gate the association between EMS comprehensiveness and environmental performance. There has been ongoing debate as to whether it is worthwhile to be “green”, or environmentally pro- active, with mixed findings reported in relation to the association between EMSs and environmental performance (Iraldo et al., 2009; Hertin et al., 2008; Johnstone et al., 2004; Melnyk et al., 2003). Such mixed findings can be attributed to the way in which EMSs and environmental performance have been operationalised in prior studies.

Accordingly, this study aims to provide further insight into this association by incorporating a more comprehensive approach to the measurement of both EMSs and environmental performance. In terms of EMSs, as mentioned previously, many studies fail to ac- count for the variation in the comprehensiveness of EMSs (Anton et al., 2004) and therefore this study incorporates an approach which focuses on the intensity of use of environmental manage- ment practices associated with an EMS. Similarly, in examining environmental performance, we aim to provide a broader perspective than previous studies which have simply focused on examining the environmental impact generated by operations such as an electricity index (Friedrich et al., 2011), total material re- quirements (Baboulet and Lenzen, 2010), greenhouse gas emissions (Psaraftis and Kontovas, 2010), and toxic releases (Patten, 2002). Henri and Journeault (2010) argue that this approach limits the measurement of environmental performance to one aspect. Consequently, we utilise Henri and Journeault's (2010) broader approach which incorporates measures covering different di- mensions of environmental performance.

2. Theory and hypotheses development

2.1. Environmental management system (EMS)

An EMS has been defined by the British Standards Institute (1992) as “the organisational structure, responsibilities, practices, procedures and resources for determining and implementing environmental policy”. An EMS is a transparent and systematic process with the objective of “prescribing and implementing environmental goals, policies, and responsibilities, as well as reg- ular auditing of its elements” (Steger, 2000, p. 24). The establish- ment of an EMS provides a wide range of benefits. For instance, many organisations have reported that environmental manage- ment has led to reduced environmental risks, better management of regulatory compliance, improved utilisation of resources and employees, and improved public reputation (Tinsley and Pillai, 2006; Sullivan and Wyndham, 2001; Steger, 2000).

Various management standards have been introduced to assist organisations in developing formalised environmental manage- ment systems. The first of these was the UK national standard BS 7750 which was created in the early 1990s (Schaefer, 2007). The European Eco-Management and Audit Scheme (EMAS) was then launched in 1995 (Tinsley and Pillai, 2006), while the most commonly referred to international standard for environmental management, ISO 14001, which was based on BS 7750, was created in 1996 (Tinsley and Pillai, 2006). The number of certifications to ISO 14001 has been rising, with 301,647 registrations worldwide in 2013, a significant increase from 13,994 registrations in 1999 (ISO, 2013). In Australia there had been 3339 certifications issued to organisations by the end of 2012 (ISO, 2013). The key elements of an ISO 14001 EMS include: development of an environmental policy; identification of environmental aspects and evaluation of

T.N. Phan, K. Baird / Journal of Environmental Management 160 (2015) 45e5646

associated environmental impact; establishment of relevant legal and regulatory requirements; development and maintenance of environmental objectives and targets; implementation of a docu- mented system, including elements of training, operational con- trols and dealing with emergencies; monitoring and measurement of operational activities; environmental internal auditing; and management review of the system to ensure its continuing effec- tiveness and suitability (Whitelaw, 2004).

It is important to note that the ISO 14001 standard does not specify a particular level of environmental performance that or- ganisations need to achieve. Rather, it focuses on requiring orga- nisations to comply with the specified characteristics of the system with such compliance expected to assist organisations in achieving their own environmental objectives (Melnyk et al., 2003). However, given the emphasis placed on environmental management prac- tices is expected to differ across organisations (Darnall et al., 2008b), it is imperative that we examine the comprehensiveness of EMS.

2.2. The comprehensiveness of EMSs

The adoption of EMSs and the certification of EMSs is voluntary, and therefore there is often variation in the extent to which orga- nisations utilise different environmental management practices comprising an EMS (Coglianese and Nash, 2001). Consequently, EMSs can differ significantly across organisations in the compre- hensiveness of their coverage and the ambitiousness of their ob- jectives (Anton et al., 2004).

Many prior studies on EMSs have utilised the dichotomous measure which only inquires whether or not an organisation has implemented an EMS, thereby failing to account for the variation in the use of EMSs (Zhu et al., 2013; Gonz!alez-Benito et al., 2011; Johnstone, 2007; Melnyk et al., 2003). Given the flexibility in the extent to which they adopt different EMS practices, some organi- sations may implement a limited EMS involving a minimum level of environmental commitment (Gonz!alez-Benito et al., 2011). For instance, some organisations may only implement an EMS for the purpose of avoiding the scrutiny of different groups of stakeholders rather than seeking environmental improvements (Anton et al., 2004). In these cases, EMSs represent a symbolic effort to improve public image (Bansal and Clelland, 2004). Accordingly, emphasis should be placed on the characteristics and/or the comprehensiveness of the EMS as opposed to whether an EMS is adopted.

Anton et al. (2004) was the first study examining the compre- hensiveness of EMSs with an EMS being considered more comprehensive if it includes a greater number of environmental practices. Several studies such as Darnall et al. (2010) and Johnstone and Labonne (2009) have followed the approach used in Anton et al. (2004). However, these studies measure the comprehen- siveness of EMSs by simply adding the number of practices un- dertaken by firms. Using the sum of these practices to proxy for EMS comprehensiveness does not account for the variation across organisations in the intensity with which the same practices are used by different organisations. For example, two organisations may both have environmental audits, but they can differ in terms of how frequent these audits are undertaken. Accordingly, in order to take into consideration the intensity of use, this study examines the comprehensiveness of EMSs by (1) examining the use of a number of environmental practices recognised as important components constituting an EMS rather than just inquiring whether or not an EMS is in place, and (2) inquiring as to the extent to which each practice is used rather than just counting the number of practices used.

2.3. The association between institutional pressures and EMS comprehensiveness

Institutional theory highlights the importance of social and cultural pressures on organisational structures and practices (Scott, 1992). In response to pressures from their institutional environ- ment, organisations adopt structures and practices that are considered legitimate and appropriate organisational choices, even though there is uncertainty regarding their actual usefulness (Carpenter and Feroz, 2001). Institutional theory has been widely recognised as a prevalent and powerful justification for organisa- tional actions (Dacin et al., 2002). It was also maintained that the institutional approach has provided significant insights into the importance of the institutional environment to organisational structure and actions (Teo et al., 2003). DiMaggio and Powell (1983, p. 149) introduced the concept of isomorphism, a process that “forces one unit in a population to resemble other units that face the same set of environmental conditions”. Organisations adopt similar structures and practices to gain legitimacy and strive for social conformity in response to the pressures from their in- stitutions (Hoffman, 1999). DiMaggio and Powell (1983) suggest that managerial decisions are greatly influenced by coercive, mimetic and normative isomorphism. Coercive isomorphism re- sults from “both formal and informal pressures exerted on orga- nisations by other organisations upon which they are dependent” (DiMaggio and Powell, 1983, p. 150). Mimetic isomorphism hap- pens when organisations imitate other organisations in response to uncertainty (DiMaggio and Powell, 1983). Normative isomorphism is primarily associated with professionalisation (DiMaggio and Powell, 1983). This study proposes that the coercive, mimetic and normative pressures imposed on organisations by different groups of stakeholders (including governments, regulators, suppliers, customers, competitors, industry associations and the community) influence the comprehensiveness of EMSs.

2.3.1. Coercive pressures Coercive pressures are “formal and informal pressures exerted

on organisations by other organisations upon which they are dependent and by cultural expectations in the society within which organisations function” (DiMaggio and Powell, 1983, p. 150). In relation to environmental issues, coercive pressures are typically associated with government and regulatory bodies (Sarkis et al., 2010). In particular, mandatory environmental regulations have been proved to be an effective tool in motivating organisations to improve their environmental management (Rivera, 2004; Winter & May, 2001; Henriques and Sadorsky, 1996). For example, the fines and penalties associated with regulatory non-compliance, including the loss of operating permits, constrain the strategic ac- tions of organisations (Darnall et al., 2010, 2008b; Henriques and Sadorsky, 1996). Furthermore, the threat of legal sanctions is perceived to be the main reason why organisations implement proactive environmental strategies (Hoffman, 2001).

Environmental legislation in Australia imposes liabilities not only on corporations but also on directors and managers for the offences of their corporations, thereby forcing businesses to mini- mise their environmental impacts to comply with legal re- quirements. For example, under the Protection of the Environment Operations Act 1997, the most serious environmental protection offences carry maximum penalties of five million dollars for cor- porations and one million dollars and/or seven years imprisonment for individuals (EPA NSW, 2014). It is expected that organisations that face greater coercive pressures will devote more effort and resources to minimising environmental impacts and costs.

H1. Organisations subject to greater coercive pressures are

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expected to use a more comprehensive EMS.

2.3.2. Mimetic pressures Mimetic isomorphism refers to the fact that in situations where

there is uncertainty, organisations may “limit the selection of structures and practices to those structures and practices that are being used by organisations who they view as being successful in the institutional environment” (Carpenter and Feroz, 2001, p. 571). Hence, organisations mimic other organisations in order to gain legitimacy (DiMaggio and Powell, 1983; Meyer and Rowan, 1977) and/or to minimise the risk of a drop in competitive advantage (Malmi, 1999; Abrahamson and Rosenkopf, 1993). Mimicry has been found to be relevant in explaining management activities (Rikhardsson et al., 2005; Abrahamson, 1991). It can also be a motivation for management to develop a system that provides in- formation for evaluating sustainability issues (Schaltegger and Burritt, 2010). In the context of environmental management, or- ganisations face general mimetic pressures from market leaders who “engage in activities so far beyond compliance that they raised the bar environmentally for everyone competing in their industry” (Sharfman et al., 2004, p. 26). Organisations facing such strong mimetic pressures are expected to strive to improve their envi- ronmental management initiatives in order to remain competitive. For example, Zhu and Geng (2013) found that mimetic drivers were an important motivation for Chinese manufacturers to implement extended supply chains to achieve Energy Saving and Emission Reduction goals.

H2. Organisations subject to greater mimetic pressures are ex- pected to use a more comprehensive EMS.

2.3.3. Normative pressures Normative pressures arise from social obligation or pro-

fessionalisation, and “generally take the form of rules-of-thumb, standard operating procedures, occupational standards, and educational curricula” (Hoffman, 1999, p. 1999). Industry associa- tions document their working conditions to legitimise their pro- fessional autonomy (Darnall et al., 2008b). Normative pressures have been found to encourage organisations to implement envi- ronmental practices in order to be perceived as having legitimate organisational activities (Zhu and Geng, 2013). The normative pressures that organisations face to improve their environmental management can be manifested in many ways. Internally, in or- ganisations with strong normative integration, evidenced by greater emphasis on performance, accountability and environ- mental policy, the corporate values and beliefs will push organi- sations to extend their environmental management practices beyond compliance (Sharfman et al., 2004). Such pressure is even more likely if organisations have a high number of employees who are concerned about environmental issues. Furthermore, em- ployees can play an important role in the implementation of EMSs, as they are often the originators and receivers of an organisation's proactive environmental activities (Sarkis et al., 2010).

Externally, normative pressures can be imposed on organisa- tions through a variety of sources, including customers, profes- sional groups, media and the community. Customers have proven to be a significant motivator for organisations to adopt environ- mental management practices. For example, Henriques and Sadorsky (1996) found that customers exerted the second highest pressure on Canadian firms to adopt an environmental plan. In addition, Zhang et al. (2008) also found that pressures from cus- tomers played a positive role in engaging organisations to improve environmental management performance.

Professional groups also influence the use of environmental

management practices. In particular, they pay a great deal of attention to upholding a good environmental reputation to prevent increased scrutiny from regulators, environmentalists, and the media, which may result in the introduction of new regulations (King and Lenox, 2000). Furthermore, organisations that are members of a particular industry group are likely to exhibit a higher level of environmental innovation as a result of their internal transfer of knowledge (Ferreira et al., 2010).

Schaefer (2007) suggested that an important reason for the adoption of EMSs is the need to improve external legitimacy given the increased public scrutiny with regards to environmental issues. For example, according to a survey of public opinion by the New South Wales Office of Environment and Heritage (OEH, 2012), 78% of people said they were concerned to some extent about envi- ronmental problems with the environment ranking in the top five issues that the state government should focus on. Furthermore, the State of Climate Report 2012 revealed that the concentration of carbon dioxide in 2011 was “higher than at any time for the past 800,000 years” (CSIRO, 2012, p.8) and that the “annual-average daily maximum temperatures have increased by 0.75 !C since 1910” (CSIRO, 2012, p.3). These findings will further raise public aware- ness and concern towards environmental issues, with Henriques and Sadorsky (2013) arguing that community groups can exert their power through the ability to lobby the regulatory system, and influence consumer purchasing patterns through media attention.

H3. Organisations subject to greater normative pressures are ex- pected to use a more comprehensive EMS.

2.4. The association between EMS comprehensiveness and environmental performance

In addition to examining the antecedents of EMS comprehen- siveness, the study also examines the influence of EMS compre- hensiveness on environmental performance. Environmental performance refers to “the impact of an organisation's activities on the environment, including the natural systems such as land, air and water as well as on people and living organisms” (Langfield- Smith et al., 2009, p. 859). As environmental issues are becoming more important to a broad range of stakeholders, including con- sumers, shareholders, potential investors, creditors, regulators, employees and the general public, there is an increased demand for corporate environmental performance information (Ilinitch et al., 1998). A range of measures have been developed by different groups, such as regulatory agencies, the business press and cor- porations themselves, to capture various aspects of environmental performance (Ilinitch et al.,1998). However, Lober (1996) notes that although judgements are frequently made about which company is “greener”, there is no clear or agreed upon definition of “green- ness”, or in other words, what constitutes environmental perfor- mance. Similarly, Henri and Journeault (2010) state that there is a significant lack of consensus on the definition and operationalisa- tion of this concept.

As previously mentioned the measurement of environmental performance using environmental impact measures such as the electricity index (Friedrich et al., 2011), total material requirements (Baboulet and Lenzen, 2010), greenhouse gas emissions (Psaraftis and Kontovas, 2010), and toxic releases (Patten, 2002) limits the scope of this multidimensional concept to only one aspect. Rather, consistent with Henri and Journeault (2010), this study evaluates environmental performance using an instrument which measures the beneficial outcomes of organisational environmental capabil- ities. Specifically, Henri and Journeault (2010) required respondents to indicate the extent to which environmental practices have led to various types of benefits, including reductions in material/process/

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production costs, reductions in the costs of regulatory compliance, increased process/product efficiency, and better relationships with stakeholders.

In the environmental management literature, many studies have examined the relationship between EMSs and environmental performance (Iraldo et al., 2009; Hertin et al., 2008; Bansal and Clelland, 2004; Johnstone et al., 2004; Dahlstr€om et al., 2003; Melnyk et al., 2003; Schucht, 2000) with mixed results. For example, Johnstone et al. (2004) found that EMSs played an important role in motivating organisations to undertake measures to improve their environmental performance. The use of EMSs was found to be particularly important in controlling waste water and air emissions and reducing environmental impacts from accidents. Similarly, Schucht (2000) reported that the adoption of EMSs had a significant influence on waste generation, resource use and water consumption. Finally, Iraldo et al. (2009) reported the positive impact of well-designed EMSs on environmental performance.

Alternatively, other studies have found little or no evidence of improved environmental performance. For example, Hertin et al. (2008) only found a weak link between EMSs and environmental performance in the manufacturing sector in six EU countries. Dahlstrom et al. (2003) did not find a significant relationship be- tween the adoption of an EMS and actual performance, although having an EMS was found to improve a number of procedural as- pects of environmental management such as plant maintenance, process operation, implementation of authorisation requirements and the recording of information.

There is scant research examining the impact of the compre- hensiveness of EMSs on environmental performance, and hence this study aims to fill this gap in the literature. There are a number of reasons why a comprehensive EMS can lead to improved per- formance. Organisations that implement a more comprehensive EMS demonstrate a greater commitment towards environmental improvement (Darnall et al., 2010). A well-designed EMS can assist organisations in managing, measuring and improving the envi- ronmental aspects of their operations (Sroufe, 2003). EMSs can reduce the possibility of unintended non-compliance with envi- ronmental regulations (Johnstone and Labonne, 2009). In addition, a comprehensive EMS can assist managers in identifying econom- ical ways of meeting environmental goals, which can result in improved performance (Johnstone and Labonne, 2009). EMSs can generate information regarding regulatory requirements and in- ternal environmental practices, and assist in resolving internal agency control issues which may cause negative environmental impacts (Grolleau et al., 2007; Potoski and Prakash, 2005). Furthermore, comprehensive EMSs are seen to have the potential to enhance the effectiveness of input usage, and thereby reduce waste generation (Anton et al., 2004). Alternatively, it is argued that or- ganisations without a comprehensive EMS are not likely to implement systematic methods for improving their environmental performance including those that are not directly regulated by laws (Uchida and Ferraro, 2007).

H4. The comprehensiveness of an EMS is positively associated with environmental performance.

3. Methodology

3.1. Data collection

Survey questionnaires were distributed to 820 Australian or- ganisations across various industries in the primary (agriculture, mining), secondary (manufacturing, construction), and tertiary (utilities, transport, health) sectors. These organisations were identified using the OneSource database which provides in-depth

business information of companies in Asia and the Pacific Rim. The target respondents were managers at different levels, including chief executive officers (CEO)/managing directors, chief financial officers (CFO)/finance managers, and chief operating officers (COO)/ production managers. The format of questions, techniques to personalise the survey and the distribution procedures followed the Dillman (2007) Tailored Designed Method which has been shown to maximise response rates.

Two hundred and seventeen (217) questionnaires were returned for a response rate of 26.5%, of which 85 (10.4%) questionnaires were from the first mail-out, and 132 (16.1%) from the second mail- out. Nine questionnaires were omitted due to substantial missing data, resulting in 208 usable questionnaires (25.4%). Appendix A presents the details regarding the respondents based on manage- ment level and industry.

In accordance with Roberts (1999), non-response bias was evaluated by comparing dependent and independent variable values between the early and late respondents, with no significant differences found. Furthermore, the comparison between re- spondents and non-respondents with respect to the average size (based on the number of employees) and industry did not detect any significant difference. Therefore, non-response bias did not appear to be a major concern.

3.2. Data analysis

Structural equation modelling (SEM) was used to test the hy- potheses. With its ability to provide scholars with a comprehensive method to evaluate and modify theoretical models, SEM has become more frequently used in social sciences (Anderson and Gerbing, 1988). SEM is considered useful especially when one dependent variable becomes an independent variable in subse- quent relationships (Hair et al., 2006).

According to Sroufe (2003), a two-stage process of SEM has been proposed by many researchers. Stage one involves the estimation and refinement of the measurement model for each variable, fol- lowed by stage two where the structural model is estimated. The justification of this approach is that the reliability of the measures is best accomplished in two stages to avoid the interaction of mea- surement and structural models (Hair et al., 2006). Section 3.3 provides details of the measurement models for the variables, whereas the result of the final structural model is presented in section 4.2.

3.3. Measurement of variables

Appendix B shows the instruments used to measure the vari- ables in the study. These latent variables were measured using reflective indicators, with changes in the latent variables reflected in changes in the observable indicators. The uni-dimensionality of each variable was established by performing exploratory factor analysis (EFA) using maximum likelihood with a direct oblimin rotation. Items with loadings below the cut-off point of 0.4 as recommended by Hair et al. (1998) were dropped from the analysis. The validity of the measurement models for each of the scales resulting from EFA was tested using confirmatory factor analysis (CFA). The assessment of these models was done by examining the squared multiple correlation coefficients, modification indices, and a number of fit indices. The redundant items were eliminated to improve the goodness of fit of the models. These items are marked with an asterisk (*) in Appendix B. Cronbach's alpha coefficients for the final scales were calculated to ensure the reliability values exceeded the threshold of 0.7 (Nunnally, 1978). Details of the measurement and analysis of each construct are discussed below, with Cronbach's alpha coefficients and selected fit indices of the

T.N. Phan, K. Baird / Journal of Environmental Management 160 (2015) 45e56 49

final and refined measurement models reported in Table 1.

3.3.1. EMS comprehensiveness Respondents were asked to indicate, on a scale of ‘1 ¼ not at all’

to ‘5 ¼ to a great extent’ the extent to which their organisation had implemented each of nine environmental management practices adapted from Anton et al. (2004) and Henriques and Sadorsky (2007a) (see Appendix B). Anton et al. (2004) was the first study to propose and operationalise the concept of the comprehensive- ness of an EMS. Henriques and Sadorsky (2007) adopted the measure with some adjustments and tested it in a large survey of more than 4000 facilities across seven countries.

Exploratory factor analysis using the maximum likelihood extraction method and varimax with Kaiser normalisation rotation method was performed to analyse the variable's uni- dimensionality. The analysis resulted in only one factor with an eigenvalue greater than 1 (Cronbach's alpha ¼ 0.921). To test the validity of the measurement model, confirmatory factor analysis was then conducted. The model fit was assessed using several common model fit measures.1 The measurement model for EMS comprehensiveness exhibited a good fit to the data (see Table 1). Therefore, there was no need to respecify or refine the model and all nine items were retained in the scale.

3.3.2. Institutional pressures The 16-item institutional pressures measure was mainly

adapted from Zhu and Geng (2013) (8 items) and Boiral and Henri (2012) (5 items), both of which examined institutional forces in the context of environmental management. The remaining three items were self-developed based on institutional theory (DiMaggio and Powell, 1983). Respondents were asked to indicate, on a scale from ‘1 ¼ not at all’ to ‘5 ¼ to a great extent’, the extent to which these factors had influenced their organisation's focus on envi- ronmental issues (see the Appendix B).

Exploratory factor analysis using maximum likelihood and var- imax rotation resulted in three factors with eigenvalues greater than 1, which accounted for 62.5% of the total variance (see Table 2). Two items (7 and 10) did not load onto any factor and therefore were removed. The first factor includes “compliance with interna- tional environmental standards”, “compliance with national/ regional environmental regulations”, and “compliance with na- tional/regional resource saving and conservation regulations” and was labelled “Coercive pressures”. The second factor includes “the green strategies of same product producers”, “the green strategies of substitute product producers”, and “pressures from suppliers,

partners, and clients with respect to environmental issues” and was labelled “Mimetic pressures”. The remaining factor was labelled “Normative pressures” and includes: “awareness of best practices in the industry”, “the environmental awareness of employees”, “the extent of media focus on the industry”, “public environmental awareness”, “the legitimisation of the organisation's activities”, “the focus on performance and accountability”, “the focus on environmental policy in the organisational vision and/or mission statement”, “and professional groups' attention to environmental issues”.

The reliability of these three factors was assessed by estimating the Cronbach's alphas (coercive pressures 0.785, mimetic pressures 0.811, and normative pressures 0.901). With respect to mimetic pressures, item 4 did not contribute to the Cronbach's alpha and therefore was eliminated. The resulting scale of items 5 and 6 for mimetic pressures has a Cronbach's alpha of 0.884. Confirmatory factor analysis was performed for each of the scales to assess their validity. The measurement model for mimetic pressures could not be tested as it had only two indicators and zero degrees of freedom. The other two measurement models exhibit overall good fit (see Table 1).

3.3.3. Environmental performance Respondents were asked to indicate, on a 5-point scale ranging

from ‘1 ¼ not at all’ to ‘5 ¼ to a great extent’, the extent to which each of the 15 environmental outcomes were achieved in their organisations (see Appendix B). These environmental performance

Table 1 Results of the measurement models.

Variable No. of items Cronbach's alpha Chi- square df Normed chi- square GFI CFI RMSEA

EMS Comprehensiveness 9 0.921 63.074 26 2.426 0.941 0.967 0.083 Institutional pressures Coercive 3 0.785 0.002 1 0.002 1 1 0 Mimetic 2 0.884 0 0 e 1 1 e Normative 8 0.901 40.745 17 2.397 0.953 0.973 0.082

Performance Resource usage 4 0.773 4.128 2 2.064 0.990 0.991 0.072 Regulatory compliance 3 0.798 0.204 1 0.204 0.999 1 0 Productivity 2 0.802 0 0 e 1 1 e Stakeholder interaction 2 0.679 0 0 e 1 1 e

Recommended threshold: Normed chi square <3, GFI and CFI >0.90, RMSEA <0.10.

Table 2 Factor analysis e Institutional pressures.

Itema Factor

Coercive Mimetic Normative

1 0.641 0.182 0.200 2 0.699 0.030 0.382 3 0.733 0.248 0.177 4 0.253 0.476 0.350 5 0.120 0.834 0.200 6 0.152 0.898 0.095 7 0.328 0.341 0.351 8 0.312 0.151 0.632 9 0.179 0.174 0.620 10 0.291 0.309 0.338 11 0.225 0.121 0.631 12 0.184 0.113 0.740 13 0.107 0.174 0.772 14 0.200 0.123 0.746 15 0.267 0.274 0.657 16 0.282 0.326 0.584

Extraction Method: Maximum Likelihood. Rotation Method: Varimax with Kaiser Normalization. Rotation converged in 5 iterations. The bold items are loaded to each factor based on the cut-off point of 0.4.

a Item numbers as listed in the Appendix.

1 The common fit measures and their recommended threshold values are: norm chi-square < 3 (Ballantyne et al., 2011); GFI and CFI > 0.90 (L!opez-Gamero et al., 2010); and RMSEA < 0.10 (Henri, 2006).

T.N. Phan, K. Baird / Journal of Environmental Management 160 (2015) 45e5650

measures were identified from previous research on environmental management and performance (Langfield-Smith et al., 2011; Henri and Journeault, 2010).

Factor analysis was performed to analyse the different di- mensions of environmental performance. Four factors with eigen- values greater than 1 were extracted, which accounted for 55.6% of the total variance (see Table 3). Item 14 (increased filters and controls on emissions and discharges) did not load onto any factor (cut-off point of 0.4) and therefore was eliminated. The first factor includes “reductions in energy consumption”, “reductions in water usage”, “reductions in material costs due to the efficient use of material”, “reductions in levels of waste”, “reductions in levels of emissions”, and “increased residue recycling”, and was labelled “Resource usage”. The second factor includes “reductions in the costs of regulatory compliance”, “reductions in the costs associated with cleaning up environmental damage”, and “reductions in the fines paid and remediation costs regarding environmental dam- age”, and was labelled “Regulatory compliance”. The third factor labelled “Productivity” includes “reductions in process/production costs”, “increased process/production efficiency”, and “increased knowledge about effective ways of managing operations”. The last factor includes “increased organisation-wide learning among em- ployees” and “better relationships with stakeholders such as local communities, regulators, and environmental groups”, and was labelled “Stakeholder interaction”.

Each environmental performance dimension was evaluated in terms of reliability (Cronbach's alpha) and validity (confirmatory factor analysis) with the results reported in Table 1. With respect to the “Resource usage” dimension, the initial Cronbach's alpha for this scale (6 items) was 0.798. Confirmatory factor analysis revealed two items (reductions in levels of emissions and increased residue recycling) with low squared multiple correlation coefficients (0.251 and 0.298 respectively) and hence these two items were removed. The scale then exhibited a good fit and a Cronbach's alpha of 0.773. The “Regulatory compliance” dimension has a Cronbach's alpha of 0.798 and the measurement model showed a good fit. The item “increased knowledge about effective ways of managing opera- tions” in the “Productivity” dimension did not contribute to the Cronbach's alpha and therefore was deleted, resulting in a final scale of two items with a Cronbach's alpha of 0.802. The mea- surement models for the “Productivity” and “Stakeholder interac- tion” (Cronbach's alpha 0.679) dimensions could not be tested as

they have only two indicators and zero degrees of freedom.

3.3.4. Control variables 3.3.4.1. Size. Common findings in the literature suggest that larger organisations are more likely to adopt formal management control systems (Ferreira et al., 2010), in particular environmental man- agement practices (Henriques and Sadorsky, 2007b), as they usu- ally have more resources and experience more pressures from stakeholders. The size of organisations was measured by the nat- ural logarithm of the number of full-time employees.

3.3.4.2. Industry. Organisations operating in more environmentally sensitive industries, which have greater impact on the environ- ment, tend to display higher levels of environmental commitment (Christ and Burritt, 2013). The three industry sectors examined in this study are primary (agriculture and mining), secondary (manufacturing and construction), and tertiary (utilities, transport, health and other services). Dummy variables were used to measure industry sectors.

4. Results

4.1. EMS comprehensiveness

Table 4 provides the descriptive statistics on the extent of usage of each of the nine environmental practices used to evaluate the comprehensiveness of EMSs. The practice that organisations used to the greatest extent is “having policies, rules, regulations, pro- cedures in relation to environmental management” (mean score ¼ 3.72), followed by “having dedicated staff responsible for focusing on environmental issues” (mean score ¼ 3.13) and “having frequent internal environmental audits” (mean score ¼ 2.98). The practices that received the least attention were “using environ- mental criteria in the evaluation and/or compensation of em- ployees” (mean score ¼ 2.26), “having frequent environmental training programs” (mean score ¼ 2.46) and “benchmarked envi- ronmental performance” (mean score ¼ 2.60).

Table 5 provides the descriptive statistics on the EMS compre- hensiveness across different industries, with the EMS compre- hensiveness score computed as the sum of the scores for the nine environmental practices. Overall the extent of EMS comprehen- siveness is below the mid-point of the range (with a mean of 25.63).

Table 3 Factor analysis e Environmental performance.

Itema Factor

Resource usage Regulatory compliance Productivity Stakeholder interaction

1 0.699 0.008 0.187 -0.024 2 0.718 0.132 0.187 0.133 3 0.567 0.098 0.522 0.071 4 0.487 0.174 0.117 0.264 5 0.499 0.321 0.183 0.075 15 0.426 0.231 0.096 0.205 7 0.216 0.485 0.258 0.169 8 0.163 0.770 0.207 0.144 9 0.112 0.841 0.140 0.143 6 0.314 0.189 0.769 0.021 10 0.169 0.330 0.708 0.164 11 0.284 0.197 0.462 0.399 12 0.169 0.055 0.204 0.808 13 0.058 0.334 -0.040 0.614 14 0.343 0.387 0.200 0.286

Extraction Method: Maximum Likelihood. Rotation Method: Varimax with Kaiser Normalization. Rotation converged in 6 iterations. The bold items are loaded to each factor based on the cut-off point of 0.4.

a Item numbers as listed in the Appendix.

T.N. Phan, K. Baird / Journal of Environmental Management 160 (2015) 45e56 51

The utilities industry exhibited the highest level of EMS compre- hensiveness (mean score ¼ 31.09), followed by mining (28.70) and construction (28.23). The agriculture and health industries re- ported the lowest mean scores (21.22 and 21.25 respectively).

4.2. The structural model

Fig. 1 represents the conceptual and structural model of the study. The structural model was tested by means of maximum likelihood estimate using AMOS version 21 software. Table 6 re- ports the results in terms of path coefficients, t-values, significance, proportion of variance (R2) and the fit indices used to assess the model fit. With regards to the fit indices, the normed chi-square (2.007) and RMSEA (0.070) are satisfactory and the CFI (0.857) is close to the recommended threshold.

Table 6 shows that the two control variables, size and industry, are associated with EMS comprehensiveness. Specifically, larger organisations exhibited a more comprehensive EMS, while orga- nisations from the secondary industry have a more comprehensive EMS than those from the tertiary industry. In addition, coercive (b ¼ 0.354, p ¼ 0.000) and normative (b ¼ 0.694, p ¼ 0.000) pressures were positively associated with the comprehensiveness of EMSs, thereby providing support for hypotheses 1 and 3. However, contrary to our prediction, mimetic pressures were found to be negatively associated with EMS comprehensiveness (b ¼ #1.153), p ¼ 0.012), and hence hypothesis 2 is not supported.

The comprehensiveness of EMSs was found to be positively associated with all four dimensions of environmental performance, namely resource usage (b ¼ 0.113, p ¼ 0.040), regulatory compli- ance (b ¼ 0.223, p ¼ 0.000), productivity (b ¼ 0.129, p ¼ 0.033), and stakeholder interaction (b ¼ 0.324, p ¼ 0.000). Therefore hypoth- esis 4 is supported.

Given the significant findings regarding the impact of EMS comprehensiveness on environmental performance, further exploratory analysis was undertaken to examine the association between each of the nine environmental management practices and the four dimensions of environmental performance. The results of the multiple regression analyses (using forced entry method) are

reported in Table 7. The findings indicate that “benchmarking environmental performance” (b ¼ 0.204) was significantly associ- ated with the resource usage dimension of environmental perfor- mance, while “using environmental criteria in the evaluation and/ or compensation of employees” (b ¼ 0.256) was significantly associated with the regulatory compliance dimension. Further- more, there was a significant relationship between “having pro- cesses to evaluate environmental risks when selecting suppliers, partners or clients” (b ¼ 0.204) and the productivity dimension. Finally, “having policies, rules, regulations, procedures in relation environmental performance” (b ¼ 0.220) was found to be associ- ated with the stakeholder interaction dimension of environmental performance.

5. Discussion

The first objective of this paper was to provide a more detailed insight into the nature of EMSs within organisations. Consequently, the study examined the comprehensiveness of EMSs using a mea- sure which focused on the extent to which nine environmental management practices associated with the use of an EMS were used by Australian organisations across various industries.

The findings highlight the variation in the extent of use of environmental management practices across industries and orga- nisations. In particular, it was found that of the seven industries examined, the utilities and mining industries used the most comprehensive EMSs, while the health and agriculture industries used EMSs to the least extent. Such findings serve to highlight the relevance of environmental management practices for specific in- dustries and the necessity to up the ante in respect to the focus on such initiatives in other industries. Furthermore, by capturing the variation in the use of the nine initiatives, the findings reinforce claims in the literature concerning the difference in EMSs across organisations (Darnall et al., 2008b). Importantly, such findings also highlight the limitations associated with empirical studies which simply categorise organisations into EMS users and non-users, or merely focus on the use of specific practices as opposed to encap- sulating the intensity of use of specific practices. Finally, the find- ings make organisations aware of the areas in which their focus on environmental management may be deficient. For example, given “using environmental criteria in the evaluation and/or compensa- tion of employees” was used to the least extent, organisations may need to concentrate on this aspect to a greater extent.

The second objective of the study was to investigate the influ- ence of institutional pressures, namely coercive, mimetic and normative pressures, on the comprehensiveness of EMSs. The findings here contribute to the literature by providing empirical evidence of the determinants of the comprehensiveness of EMSs and reinforcing the importance and relevance of institutional the- ory in explaining the adoption of environmental practices. Sur- prisingly, mimetic pressures were found to have a negative influence on the comprehensiveness of EMSs, suggesting that

Table 4 Summary statistics for EMS comprehensiveness.

Item Mean Standard deviation

1. Policies, rules, regulations, procedures in relation to environmental management 3.72 1.099 2. Dedicated staff responsible for focusing on environmental issues 3.13 1.377 3. Used environmental criteria in the evaluation and/or compensation of employees 2.26 1.087 4. Frequent environmental training programs 2.46 1.129 5. Frequent internal environmental audits 2.98 1.315 6. Frequent external environmental audits 2.84 1.316 7. Benchmarked environmental performance 2.60 1.208 8. Processes to evaluate environmental risks when selecting suppliers, partners, or clients 2.75 1.199 9. Environmental performance indicators and goals 2.89 1.275

N ¼ 208. Minimum (actual and theoretical) ¼ 1. Maximum (actual and theoretical) ¼ 5.

Table 5 EMS comprehensiveness by industry category.

Industry N (%) EMS comprehensiveness

Mean Std error Mina Maxa

Agriculture 27 (13.5) 21.22 1.346 9 34 Mining 33 (16.5) 28.70 1.354 10 44 Manufacturing 29 (14.5) 25.62 1.582 10 40 Construction 22 (11.0) 28.23 1.595 10 42 Health 31 (15.5) 21.55 1.325 10 38 Transport 25 (12.5) 23.96 1.758 10 43 Utilities 33 (16.5) 31.09 1.406 12 45 Total 200 (100) 25.63 0.600 9 45

a Minimum theoretical ¼ 9, Maximum theoretical ¼ 45.

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Fig. 1. The structural model.

Table 6 Results of the structural equation model.

Description of path Path coefficient t-value p R2

Coercive pressures / EMS Comprehensiveness 0.354 3.636 0.000 Mimetic pressures / EMS Comprehensiveness #1.153 #2.511 0.012 0.744 Normative pressures / EMS Comprehensiveness 0.694 7.293 0.000 Size / EMS comprehensiveness 0.140 5.080 0.000 Industry_Primary / EMS comprehensiveness 0.158 1.253 2.000 Industry_Secondary / EMS comprehensiveness 0.281 4.349 0.000 EMS Comprehensiveness / Resource usage 0.113 2.058 0.040 0.027 EMS Comprehensiveness / Regulatory compliance 0.223 4.349 0.000 0.135 EMS Comprehensiveness / Productivity 0.129 2.137 0.033 0.028 EMS Comprehensiveness / Stakeholder interaction 0.324 5.535 0.000 0.364

Goodness-of-fit indices: Norm chi-square ¼ 2.007, CFI ¼ 0.857, RMSEA ¼ 0.070.

Table 7 The relationship between environmental management practices and environmental performance dimensions.

Itema Standardised coefficient

Environmental performance

Resource usage Regulatory compliance Productivity Stakeholder interaction

1 0.012 #0.079 0.036 0.220** 2 0.152 0.191* 0.035 #0.023 3 0.022 0.256** #0.024 0.149* 4 0.052 0.008 0.109 0.096 5 #0.084 #0.052 #0.117 0.149 6 #0.157 0.060 0.055 #0.092 7 0.204** 0.022 0.030 #0.053 8 0.161* 0.071 0.204** 0.082 9 #0.193* #0.050 #0.132 0.037 R2 0.067 0.144 0.044 0.239 F 1.590 3.706 1.008 6.891

** Significant at the 0.05 level. * Significant at the 0.10 level.

a EMS comprehensiveness items numbered 1 to 9 as listed in the Appendix.

T.N. Phan, K. Baird / Journal of Environmental Management 160 (2015) 45e56 53

organisations do not follow the leads of competitors who adopt proactive ‘green’ strategies. Alternatively, the threat of coercive pressures was found to be associated with EMS comprehensive- ness, implying that the government can significantly affect the use and comprehensiveness of EMSs. The earlier finding that the heavily regulated utilities and mining industries were found to report higher levels of EMS comprehensiveness supports this sug- gestion. In addition, in line with Uchida and Ferraro (2007) and Anton et al. (2004), the findings suggest that the government can induce improvements in environmental performance by creating regulatory pressures such as the threat of more stringent manda- tory regulation. Therefore, environmental policy should focus on encouraging organisations with a limited EMS to use more prac- tices and use them to a greater extent to achieve better environ- mental outcomes. Effort should be directed to the practices that received the least attention from organisations, including using environmental criteria in the evaluation and/or compensation of employees, providing frequent environmental training programs, and benchmarking environmental performance. This could be achieved by providing public information sessions, technical assistance, or subsidised training sessions to organisations with limited resources.

The government can also potentially induce the improvement of environmental performance indirectly through appropriately designed public incentives, since normative pressures from a va- riety of sources, including employees, professional groups, media and the community, were found to be an antecedent of EMS comprehensiveness. This can be achieved through designing and targeting public policy efforts towards public recognition of improved environmental performance which allows organisations to differentiate themselves from others, mandatory provision of organisations’ environmental information to the public, and educating the public about the adverse consequences of various undesirable environmental actions (Clarkson et al., 2011; Khanna and Anton, 2002).

The third objective of this study was to address the gap in the literature concerning the effectiveness of environmental manage- ment initiatives by examining the association between EMS comprehensiveness and environmental performance. In examining this association the study incorporated Henriques and Journeault's (2010) broader measure of environmental performance in conjunction with the more detailed measure of EMS comprehen- siveness. Organisations with more comprehensive EMSs were found to experience better environmental performance in all four areas of resource usage, regulatory compliance, productivity and stakeholder interaction. The results suggest that when organisa- tions take a systematic and whole-hearted approach in developing a comprehensive EMS, their environmental performance is perceived to be better. Further analysis also revealed specific environmental management practices that organisations should focus on to achieve improvements in a particular area of environ- mental performance. For example, to improve resource usage, or- ganisations should benchmark their environmental performance to a greater extent.

In addition to improving environmental performance, the development of a more comprehensive EMS enables organisations to respond to the coercive and normative pressures they face. Or- ganisations can anticipate rather than submit to emerging regula- tory constraints, reduce the stringency of anticipated mandatory regulations and thus reduce the expected costs of compliance in the future (Khanna and Anton, 2002; De Borchgrave, 1993). Organisa- tions can also communicate, consult and collaborate with key stakeholders to address environmental issues, for instance, hosting environmental forums or establishing advisory panels (Delmas and Toffel, 2004).

6. Conclusion

The study contributes to the literature by providing a more detailed insight into the nature of EMSs, the influence of institu- tional pressures on EMS comprehensiveness, and the association between EMS comprehensiveness and environmental perfor- mance. Given the reported positive association between EMS comprehensiveness with environmental performance, it is sug- gested that organisations should endeavour to implement envi- ronmental management practices to a greater extent. In considering this, the current study highlights the merits of exam- ining EMS comprehensiveness utilising an approach which assesses the intensity of use of specific environmental management practices.

In addition, given the importance of EMS comprehensiveness in enhancing environmental performance, organisations should be aware of the factors that affect the comprehensiveness of EMSs and other proactive strategies. In particular, this study highlights the importance of institutional pressures, specifically coercive and normative pressures, in enhancing the comprehensiveness of EMSs. Organisations should be aware of and anticipate such pressures with a view to minimising the costs of disruption and compliance, while at the same time reflecting on the comprehensiveness of their EMS and its role in enhancing environmental performance.

Given the inherent limitations of the mail survey method, future studies may utilise interviews together with surveys in an attempt to provide further insights into the extent to which environmental practices are used. In addition, given the study is static, i.e. it only examines the use of EMSs at the present time, future studies could expand the research by investigating the improvement in envi- ronmental performance through the use of more comprehensive EMSs over time.

While the study measures EMS comprehensiveness using an established instrument, future studies could reinforce the findings by incorporating other key components of an EMS set out in internationally recognised guidelines or standards such as the ISO 14001 or EMAS. Similarly, in evaluating environmental perfor- mance, researchers may refer to the ISO 14031 standard which provides guidance on the design and use of environmental per- formance evaluation within an organisation. Furthermore, in response to claims that survey data fails to capture actual envi- ronmental performance, future research may use more objective data to assess environmental performance. Alternatively, future studies could use such objective data to confirm the validity of survey-based environmental performance instruments.

Appendix A. Respondents by management level and industry

n %

Panel A: Management level CEO/Managing director 62 30.4 CFO/Finance manager 26 12.7 COO/Production manager 120 56.9 Total 208 100 Panel B: Industry category Agriculture 27 13.0 Mining 33 15.9 Manufacturing 29 13.9 Construction 22 10.6 Health 31 14.9 Transport 25 12.0 Utilities 33 15.9 Other 8 3.8 Total 208 100

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Appendix B. Measurement of variables

The items marked with an asterisk (*) were removed after testing the measurement models.

EMS comprehensiveness

Institutional pressures

Environmental performance

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12. Increased organisation-wide learning among employees b

13. Better relationships with stakeholders such as local communities, regulators, and environmental groups b

14. * Increased filters and controls on emissions and discharges b

15. * Increased residue recycling b

a Langfield-Smith et al. (2011). b Henri and Journeault (2010).

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