Dealing with Cultural Differences in Environmental Management: Exploring the CEP-CFP Relationship

Despite numerous attempts to agree on the nature of the relationship between environmental and financial performance, controversial results still exist in the literature. This discrepancy suggests that we must enlarge the spectrum of analysis to understand when it pays to be green. The way in which society takes a stance on environmental responsibility is deeply bounded to the cultural lenses through which it sets its priorities. A cultural perspective can help explain the capacity for social phenomena to shape behaviour. We consider how the contextual environment of culture, thus far neglected, might moderate the corporate environmental performance–corporate financial performance relationship and thus influence firms’ capacity to offset the costs of environmental management. By using a sample of 954 companies, we contribute to the long-running debate, showing how the effect of cultural influence can overcome the hurdle of contrasting results and offer novel insights for both academia and practitioners.