Do firm-level sustainability targets drive environmental innovation? Insights from BRICS Economies

Ullah, Subhan; Nasim, Asma

Abstract

This paper examines the relationship between sustainability targets and their impacts on corporate environmental innovation. Using data over the period 2009-2018 on 202 companies from BRICS countries, covering firm-level governance, social responsibility and sustainability this paper examines firm-level sustainability targets, and incentives encourage managers to engage in more environmentally friendly activities. Using panel data probit regression, and after controlling for country-level governance and institutional factors, the study finds that embedding environmental targets in corporate strategy does encourage corporate managers to design and develop eco-friendly products and services, and such firm-level commitments at the top motivates managers to promote, market, and label environmentally friendly products. The findings call for greater emphasis on aligning executive compensation with sustainability targets rather than focusing too much on short-term accounting and market-based measures of firm performance.

Citation

Ullah, S., & Nasim, A. (2021). Do firm-level sustainability targets drive environmental innovation? Insights from BRICS Economies. Journal of Environmental Management, 294, Article 112754. https://doi.org/10.1016/j.jenvman.2021.112754

• Journal Article Type: Article
• Acceptance Date: May 2, 2021
• Online Publication Date: Jul 12, 2021
• Publication Date: Sep 15, 2021
• Deposit Date: Jun 9, 2021
• Publicly Available Date: Jul 13, 2022
• Journal: Journal of Environmental Management
• Print ISSN: 0301-4797
• Electronic ISSN: 1095-8630
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 294
• Article Number: 112754
• DOI: https://doi.org/10.1016/j.jenvman.2021.112754
• Keywords: environmental innovation; sustainability targets; environmental strategy
• Public URL: https://nottingham-repository.worktribe.com/output/5652939
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S0301479721008161?via%3Dihub