Do firms with environmental concerns give better performance: A systematic literature review

• Published date: 01 February 2022
• Author: Sanchita Bansal,Isha Garg,Anshita Yadav
• Date: 01 February 2022
• DOI: http://doi.org/10.1002/pa.2322

ACADEMIC PAPER

Do firms with environmental concerns give better

performance: A systematic literature review

Sanchita Bansal | Isha Garg | Anshita Yadav

University School of Management Studies,

Guru Gobind Singh Indraprastha University,

New Delhi, India

Correspondence

Sanchita Bansal, University School of

Management Studies, Guru Gobind Singh

Indraprastha University, Sector 16C, Dwarka,

New Delhi 110078, India.

Email: bansalsanchita@gmail.com

The extant literature has examined the role of environmental management practices

on performance of the firms. The present study aims to provide a clear understanding

of the research into the field using a systematic review methodology using a biblio-

graphic database that is, “Web of Science”within the period 1990–2019. The

descriptive findings present the journals in which the research papers are published,

the countries where the research took place and the industrial sectors that the

reviewed papers have covered. The paper contributes significantly to the existing lit-

erature and provides future research agendas in the area. This paper presents an inte-

grated framework consisting of pressures on management decisions, environmental

management strategies and performance by various stakeholders. Larger sample

could be taken to study the relationship so as to generalize the findings. More com-

prehensive approach needs to be taken taking into account all the potential variables

to eliminate omitted variable bias.

1|INTRODUCTION

Eco-friendly or environmental concerns have become the global issue

in the agendas of governments, organizations/firms, defense groups

(Gadenne, Kennedy, & McKeiver, 2009). An individual action(s) as a

human being inflicts serious troubles on our ecosystem and trade

actions are in the forefront (Gadenne et al., 2009). Regardless of the

development, wealth, prosperity and various expansions made by

firms (industrial) in the last two decades, our environment is fre-

quently suffering with the problems related to air, water, pollution,

global warming, soil erosion, etc., which increases the instability in life

cycle (Leonidou & Leonidou, 2011).

In addition, ecological issues have earned a lot of importance

by business managers. The organizations which are going through

environmental regulations are focusing to manage their outflow of

environmentally hostile wastes. European Commission (2001)

explains that organizations consider taking efforts on environment-

friendly production, which could provide foremost advantages,

assisting in strengthening the market value and brand image of the

business.

More recently, as the deterioration of natural environment has

become one of the major menace in future existence of human life,

large amount of business groups/firms have been inclined toward

green production/innovation to safeguard the environment as well as

attaining financial growth (Porter & Linde, 1995). Lately, the theory of

Green Economy dwelling on the purpose of fulfilling economic objec-

tives by considering community and natural environment both (United

Nations Environment Programme, 2011).

“Green Production or manufacturing”is described in broad man-

ner as “the renewal of production processes and the creation of

environmentally-beneficial operations without harming the natural

world”(S. K. Srivastava, 2007). Green manufacturing provides ade-

quate opportunities to increase or improve firm's performance, affect-

ing financial profits without mistreat the environment or with eco-

friendly protection (Roy & Khastagir, 2016).

Gimenez, Sierra, and Rodon (2012) maintain that “An organization

which is developing balance between preserving the environment,

upgrade the lifestyle of connected ones and generate profit for orga-

nization is the sustainable organization.”To gain sustainability, a firm

requires to simultaneously lift up their performance in economic, envi-

ronmental and social responsibility (Elkington, 1998).

Consecutively, to cope-up with the fierce struggle or rivalry in the

worldwide market and severe environmental policies, the organization

or firm's legislators are putting great deal of interest in executing the

environmental sustainability concept into organization actions (Zhou,

Tokos, Krajnc, & Yang, 2012).

Received: 26 June 2020 Revised: 16 July 2020 Accepted: 20 July 2020

DOI: 10.1002/pa.2322

J Public Affairs. 2022;22:e2322. wileyonlinelibrary.com/journal/pa © 2020 John Wiley & Sons Ltd 1of12

https://doi.org/10.1002/pa.2322