IDEAS home Printed from https://ideas.repec.org/a/bla/acctfi/v46y2006i4p677-695.html
   My bibliography  Save this article

Environmental social controls and capital investments: Australian evidence

Author

Listed:
  • Dorothy Wood
  • Donald G. Ross

Abstract

Environmental social controls (ESCs) such as mandatory disclosure, regulations, subsidies, and stakeholder opinion are intended to improve firm environmental performance. This paper reports ESC importance to Australian financial managers in making capital investment decisions. A decision‐making experiment showed managers to be most responsive to stakeholder opinion (42 per cent), followed by subsidization (26 per cent) and regulatory cost (22 per cent). Mandatory disclosure has very little influence (10 per cent). ESC interaction effects are limited so coordination of ESC policy is not a primary concern. High degrees of managerial self‐insight suggest policy changes would be enhanced by close consultations with the managers involved.

Suggested Citation

  • Dorothy Wood & Donald G. Ross, 2006. "Environmental social controls and capital investments: Australian evidence," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 46(4), pages 677-695, December.
    • Handle: RePEc:bla:acctfi:v:46:y:2006:i:4:p:677-695
    DOI: 10.1111/j.1467-629X.2006.00180.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-629X.2006.00180.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-629X.2006.00180.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Roger L. Burritt, 2002. "Environmental reporting in Australia: current practices and issues for the future," Business Strategy and the Environment, Wiley Blackwell, vol. 11(6), pages 391-406, November.
    2. David Skidmore, 1997. "Encouraging sustainable business practice through managing policies and instruments dynamically," Business Strategy and the Environment, Wiley Blackwell, vol. 6(3), pages 163-167, July.
    3. Magali Delmas & Michael W. Toffel, 2004. "Stakeholders and environmental management practices: an institutional framework," Business Strategy and the Environment, Wiley Blackwell, vol. 13(4), pages 209-222, July.
    4. James Boyd, 1997. "'Green money' in the bank: firm responses to environmental financial responsibility rules," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 18(6), pages 491-506.
    5. Alain Verbeke & Chris Coeck, 1997. "Environmental taxation: a green stick or a green carrot for corporate social performance?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 18(6), pages 507-516.
    6. Mark A. Cohen, 1997. "Firm response to environmental regulation and environmental pressures," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 18(6), pages 417-420.
    7. Boyd, James, 1998. "Searching for the Profit in Pollution Prevention: Case Studies in the Corporate Evaluation of Environmental Opportunities," RFF Working Paper Series dp-98-30, Resources for the Future.
    8. Bansal, Sangeeta & Gangopadhyay, Shubhashis, 2003. "Tax/subsidy policies in the presence of environmentally aware consumers," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 333-355, March.
    9. Aseem Prakash & Kelly Kollman, 2004. "Policy modes, firms and the natural environment," Business Strategy and the Environment, Wiley Blackwell, vol. 13(2), pages 107-128, March.
    10. Slovic, Paul & Fleissner, Dan & Bauman, W Scott, 1972. "Analyzing the Use of Information in Investment Decision Making: A Methodological Proposal," The Journal of Business, University of Chicago Press, vol. 45(2), pages 283-301, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. John Thalassinos & Konstantinos Liapis, 2011. "Measuring a Bank’s Financial Health: A Case Study for the Greek Banking Sector," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 135-172.
    2. Eleftherios Thalassinos & Konstantinos Liapis & John E. Thalassinos, 2011. "The Regulation Framework for the Banking Sector: The EMU, European Banks and Rating Agencies before and during the Recent Financial and Debt Crisis," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 1(39), pages 250-279.
    3. Ju Hyoung Park & Hyun-Young Park & Ho-Young Lee, 2018. "The Effect of Social Ties between Outside and Inside Directors on the Association between Corporate Social Responsibility and Firm Value," Sustainability, MDPI, vol. 10(11), pages 1-24, October.
    4. Giovanni Ferri & Angelo Leogrande, 2015. "Was the Crisis Due to a Shift from Stakeholder to Shareholder Finance? Surveying the Debate," Euricse Working Papers 1576, Euricse (European Research Institute on Cooperative and Social Enterprises).
    5. Kim, Sooin & Yoo, Jungmin, 2022. "Corporate Opacity, Corporate Social Responsibility, and Financial Performance," Finance Research Letters, Elsevier, vol. 49(C).
    6. Donald G. Ross & Dorothy Wood, 2008. "Do environmental social controls matter to Australian capital investment decision‐making?," Business Strategy and the Environment, Wiley Blackwell, vol. 17(5), pages 294-303, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yusheng Kong & Fahad Javed & Jahanzaib Sultan & Muhammad Shehzad Hanif & Noheed Khan, 2022. "EMA Implementation and Corporate Environmental Firm Performance: A Comparison of Institutional Pressures and Environmental Uncertainty," Sustainability, MDPI, vol. 14(9), pages 1-25, May.
    2. Antony Paulraj, 2009. "Environmental motivations: a classification scheme and its impact on environmental strategies and practices," Business Strategy and the Environment, Wiley Blackwell, vol. 18(7), pages 453-468, November.
    3. Olga Goncalves & Elisabeth Robinot & Hélène Michel, 2015. "Does It Pay to Be Green? The Case of French Ski Resorts," Grenoble Ecole de Management (Post-Print) hal-01591790, HAL.
    4. Birgitta Schwartz, 2009. "Environmental strategies as automorphic patterns of behaviour," Business Strategy and the Environment, Wiley Blackwell, vol. 18(3), pages 192-206, March.
    5. James Cordeiro & Manish Tewari, 2015. "Firm Characteristics, Industry Context, and Investor Reactions to Environmental CSR: A Stakeholder Theory Approach," Journal of Business Ethics, Springer, vol. 130(4), pages 833-849, September.
    6. Bruce Clemens & Charles E. Bamford & Thomas J. Douglas, 2008. "Choosing strategic responses to address emerging environmental regulations: size, perceived influence and uncertainty," Business Strategy and the Environment, Wiley Blackwell, vol. 17(8), pages 493-511, December.
    7. Ailie K.Y. Tang & Kee‐hung Lai & T. C. E. Cheng, 2012. "Environmental Governance of Enterprises and their Economic Upshot through Corporate Reputation and Customer Satisfaction," Business Strategy and the Environment, Wiley Blackwell, vol. 21(6), pages 401-411, September.
    8. Nigel James Martin & John Lewis Rice, 2014. "Influencing Clean Energy Laws: an Analysis of Business Stakeholder Engagement," Business Strategy and the Environment, Wiley Blackwell, vol. 23(7), pages 447-460, November.
    9. H. Eggert & M. Greaker, 2011. "Trade, GMOs and Environmental Risk: Are Current Policies Likely to Improve Welfare?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(4), pages 587-608, April.
    10. Chin‐jung Luan & Chengli Tien & Pei‐hua Wu, 2013. "Strategizing Environmental Policy and Compliance for Firm Economic Sustainability: Evidence from Taiwanese Electronics Firms," Business Strategy and the Environment, Wiley Blackwell, vol. 22(8), pages 517-546, December.
    11. Bárbara Galleli & Elder Semprebon & Joyce Aparecida Ramos dos Santos & Noah Emanuel Brito Teles & Mateus Santos de Freitas-Martins & Raquel Teodoro da Silva Onevetch, 2021. "Institutional Pressures, Sustainable Development Goals and COVID-19: How Are Organisations Engaging?," Sustainability, MDPI, vol. 13(21), pages 1-21, November.
    12. Linghong Zhang & Bowen Xue & Xiyu Liu, 2018. "Carbon Emission Reduction with Regard to Retailer’s Fairness Concern and Subsidies," Sustainability, MDPI, vol. 10(4), pages 1-28, April.
    13. Nigel Martin & John Rice, 2010. "Analysing emission intensive firms as regulatory stakeholders: a role for adaptable business strategy," Business Strategy and the Environment, Wiley Blackwell, vol. 19(1), pages 64-75, January.
    14. Gao, Shuai & Cai, Wenjia & Liu, Wenling & Wang, Can & Zhang, ZhongXiang, 2014. "Corporate Preferences for Domestic Policy Instruments under a Sectoral Market Mechanism: A Case Study of Shanxi Province in China," Working Papers 249496, Australian National University, Centre for Climate Economics & Policy.
    15. Anna Lee Rowe & Margaret Nowak & Mohammed Quaddus & Marita Naude, 2014. "Stakeholder Engagement and Sustainable Corporate Community Investment," Business Strategy and the Environment, Wiley Blackwell, vol. 23(7), pages 461-474, November.
    16. Ahmed Kouider Aissa & Alessandro Tampieri, 2024. "Green Consumers and the Transition to Sustainable Production," Working Papers - Economics wp2024_04.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    17. Maccarrone, Giovanni & Marini, Marco A. & Tarola, Ornella, 2023. "Shop Until You Drop: the Unexpected Effects of Anticonsumerism and Environmentalism," FEEM Working Papers 330384, Fondazione Eni Enrico Mattei (FEEM).
    18. Ren, Shenggang & Hu, Yucai & Zheng, Jingjing & Wang, Yangjie, 2020. "Emissions trading and firm innovation: Evidence from a natural experiment in China," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    19. Haitao Yin & Alex Pfaff & Howard Kunreuther, 2011. "Can Environmental Insurance Succeed Where Other Strategies Fail? The Case of Underground Storage Tanks," Risk Analysis, John Wiley & Sons, vol. 31(1), pages 12-24, January.
    20. Marileena Koskela & Jarmo Vehmas, 2012. "Defining Eco‐efficiency: A Case Study on the Finnish Forest Industry," Business Strategy and the Environment, Wiley Blackwell, vol. 21(8), pages 546-566, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:acctfi:v:46:y:2006:i:4:p:677-695. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/aaanzea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.