T. Busch, Matthew P. Johnson, Maximilian Schnippering
{"title":"A Change Will Do You Good: Does Continuous Environmental Improvement Matter?","authors":"T. Busch, Matthew P. Johnson, Maximilian Schnippering","doi":"10.1177/10860266221107648","DOIUrl":null,"url":null,"abstract":"Superior corporate environmental performance (CEP) is considered to be an indication of well-managed firms. While previous empirical research has operationalized various environmental measurements, one aspect has remained under-scrutinized, namely, continuous improvement. We examine whether continuous CEP improvement is reflected in aggregated environmental scores provided by sustainability rating agencies. From a natural resource-based view, we investigate the association of continuous CEP improvement with corporate financial performance (CFP). Based on panel data (2005–2020), the results show that continuous CEP improvement is not associated with aggregated environmental scores provided by three major rating agencies. At the same time, however, continuous improvement is positively associated with accounting as well as market-based CFP. The article concludes that continuous CEP improvement is relevant from a materiality perspective, but it is not adequately captured in the environmental scores from rating agencies. Therefore, we propose using a best-in-progress approach as a meaningful investment strategy instead of the established best-in-class screenings.","PeriodicalId":47984,"journal":{"name":"Organization & Environment","volume":"35 1","pages":"551 - 578"},"PeriodicalIF":4.2000,"publicationDate":"2022-08-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Organization & Environment","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1177/10860266221107648","RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ENVIRONMENTAL STUDIES","Score":null,"Total":0}
引用次数: 0
Abstract
Superior corporate environmental performance (CEP) is considered to be an indication of well-managed firms. While previous empirical research has operationalized various environmental measurements, one aspect has remained under-scrutinized, namely, continuous improvement. We examine whether continuous CEP improvement is reflected in aggregated environmental scores provided by sustainability rating agencies. From a natural resource-based view, we investigate the association of continuous CEP improvement with corporate financial performance (CFP). Based on panel data (2005–2020), the results show that continuous CEP improvement is not associated with aggregated environmental scores provided by three major rating agencies. At the same time, however, continuous improvement is positively associated with accounting as well as market-based CFP. The article concludes that continuous CEP improvement is relevant from a materiality perspective, but it is not adequately captured in the environmental scores from rating agencies. Therefore, we propose using a best-in-progress approach as a meaningful investment strategy instead of the established best-in-class screenings.
期刊介绍:
Organization & Environment encourages informed discussion about the social roots and consequences of environmental problems and stimulates deeper reflection on the meaning and significance of the natural world. By critically examining the impact of human production and consumption systems on the natural environment, Organization & Environment develops new perspectives on organizations that encourage environmentally sensitive reflection, inquiry, and practice.