An Example of a Case-Study
Explaining Variation in
Corporate Environmental
Performance
Robert A. Kagan, Neil Gunningham, &
Dorothy Thornton
Context: The Amoral Calculator
v. The Greening of Industry
• Regulated business corporations take costly
measures to improve their environmental
performance only when they believe that
legal non-compliance is likely to be
detected and harshly penalized.
• Yet there is now considerable evidence that
some companies do more for the
environment than the law requires.
So...
• Why do some companies but not others
choose to move beyond compliance?
• What social policy tools are likely to prove
most effective in achieving improved
corporate environmental performance?
Sample - Case studies can have a
sample size of more than 1
• 14 pulp and paper manufacturing mills with
a similar technology in 4 jurisdictions.
• Selection criteria: Australia, New Zealand,
and the US states of Georgia and
Washington - tried to include all facilities.
• Selection criteria: in British Columbia,
Canada, chose 4 out of 14 facilities based
on reputation, company, convenience
Qualitative Data
• Lengthy on-site, semi-structured interviews
with environmental managers, (and in most
cases) with mill managers, corporate
environmental managers, regulators, and
activists familiar with the mill.
• Interviews were designed to elicit pollution
control histories, and probed for specific
examples.
Qualitative Data: Developing a
measure of Environmental Management Style
• Developed Five Ideal Types:
1.
2.
3.
4.
5.
Laggards
Reluctant Compliers
Committed Compliers,
Environmental Strategists
True Believers
Quantitative Data
• Environmental Performance: pollutant loads
in water discharges: (1) conventional
pollutants BOD, TSS and (2) toxic
pollutant: AOX (think of as a proxy for
dioxin)
• Economic Data: sales and income for parent
corporation
Findings: Compliance, Declining Pollution,
Narrower Differences Over Time
Figure 1: Annual Average BOD (lb/day) at TS and JF
160000
140000
120000
100000
80000
60000
40000
20000
TS An. Av. BOD
JF An Av BOD
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
1977
1976
1975
1974
1973
1972
1971
1970
1969
1968
1967
1966
0
Findings: Still Significant Contemporary
Variation
Jurisdiction
Br. Col.
Br. Col.
WA
NZ
WA
Br. Col.
GA
Br. Col.
WA
GA
WA
NZ
GA
AUZ
BOD
Mill
SH
PW
TS
IK
VL
AK
PG
RC
CB
IG
JF
AT
RF
MA
kg/day Jurisdiction
993
Br. Col.
1000
Br. Col.
1271
WA
1600
WA
1996
Br. Col.
2302
GA
2367
Br. Col.
2549
WA
3848
GA
4663
WA
4726
NZ
4917
NZ
GA
AUZ
TSS
Mill
AK
SH
TS
VL
PW
PG
RC
CB
IG
JF
IK
AT
RF
MA
kg/day Jurisdiction
2349
GA
2484
WA
3147
WA
3487
Br. Col.
3525
NZ
3637
Br. Col.
4282
Br. Col.
5846
WA
7178
WA
7212
WA
7900
NZ
8070
GA
GA
AUZ
AOX
Mill
RF
SH
VL
RC
AT
AK
PW
TS
JF
CB
IK
PG
IG
MA
kg/ton
0.10
0.31
0.34
0.46
0.54
0.58
0.60
0.91
3.49
Regulatory Regime Does Not Explain
Facility-Level Environmental Performance
Figure 2: BOD Discharges by Jurisdiction
6000
BOD discharges (kg/day)
5000
4917
4663
4726
4000
3848
3000
2549
2302
2367
2000
1996
1600
1000
1271
1000
993
0
1
2
3
4
Jurisdiction: 2=BC, 3=GA, 4=NZ, 5=WA
5
6
Contemporary Economic Indicators Do Not
Explain Environmental Performance
Earlier Economic Indicators are Correlated
with Current Environmental Performance
Corp. income-sales ratio
1990-1994
Corp. income
1990-1994
98-99
BOD
98-99
TSS
98-99
AOX
98-99
Obj Tech
98-99
Subj Tech
98-99
Mgmt Style
Not Sig
Not Sig
-0.96
0.84
0.63
-0.62
-0.61
-0.65
Not. Sig
0.77
0.55
Not Sig
Social Pressures Do Partially Explain
Beyond Compliance Environmental
Performance
• "We have to continuously convince the public we
have a right to exist.”
• “The EPA is such a monolith it can’t adapt. It takes
a decade to get something to happen. The
environmental community is really setting the tone.
It’s done far more to make companies accountable
for pollution. It does more to keep me on my
toes...”
But the most powerful explanatory variable is
Environmental Management Style
Environmental
Performance
True Believer
BOD (kg/day)
1288
TSS (kg/day)
4510
AOC (kg/ton)
.44
Management Style
Env. Strategist Committed Complier
2304
3607
3439
6155
.46
.57
Reluctant Complier
4726
7212
The License Model of Corporate
Environmental Performance
EXTERNAL FACTORS
INTERNAL FACTORS
Social
License
Legal
License
History
Culture
Personnel
etc.
Economic
License
Environmental
Management
Style
Environmental Performance
Without the use of the case-study
methodology we would not have
discovered:
• The importance of social license
• The importance of interactions between
economic, legal/political, and social spheres
• The importance of corporate management
style
• Nor would we have been able to develop
the license model.