Grantee Research Project Results

2006 Progress Report: Explaining Variation in Corporate Environmental Performance

EPA Grant Number: R832153
Title: Explaining Variation in Corporate Environmental Performance
Investigators: Kagan, Robert A. , Thornton, Dorothy , Gunningham, Neil
Institution: University of California - Berkeley , Australian National University
EPA Project Officer: Hahn, Intaek
Project Period: April 1, 2005 through March 31, 2007
Project Period Covered by this Report: April 1, 2006 through March 31, 2007
Project Amount: $356,875
RFA: Corporate Environmental Behavior and the Effectiveness of Government Interventions (2004) RFA Text |  Recipients Lists
Research Category: Environmental Justice

Objective:

The project’s basic objectives are to explore several related questions: Why do business firms comply with the law and in many cases do more than comply with the law? Why do some firms have better environmental performance records than their competitors? What is the role of government regulation, in it various forms, in shaping variation in corporate environmental performance? These questions will be addressed primarily through detailed studies of a stratified sample of firms (between 12 and 16) in the trucking industry.

Progress Summary:

Change in Research Design—Change in Industry Sector Focus

Per the suggestions of staff at the U.S. Environmental Protection Agency (EPA), we changed the industries that were initially to be examined in the original study design from metal finishing and dairy products to the transportation industry, specifically trucks and buses. The rationale for focusing on a limited number of firms, in the trucking sector and in California and Texas, relates to our prior research on corporate environmental performance. That research concentrated on firms with multiple air and water discharges in certain industrial sectors (pulp and paper mills, chemical manufacturers) that experience (a) high levels of regulatory scrutiny and (b) high levels of social scrutiny (from both local and national environmental activist organizations). See, for example, Gunningham, et al. (2003). That research also convinced us that focusing on detailed analysis of 12-16 facilities with similar production technologies struck a useful compromise between surveys of large numbers of firms (in which high-quality firm-level environmental performance data tend to be unavailable or not easily comparable) and in-depth portraits of one or two firms.

This study is designed to examine corporate motivations and environmental performance among firms that differ from pulp mills and chemical companies in two important ways. The trucking firms we examine are small companies. We wished to focus on small companies because many of the most pressing environmental issues currently facing the nation are from the collective actions of large numbers of small corporate and individual actors. Collectively, truck and bus emissions have substantial environmental and health impacts, both through nitrous oxide and particulate emissions from vehicles, and through oil and chemical releases from truck and bus terminals; however, there is comparatively little direct environmental regulation of bus and truck companies. Also, by and large, truck and bus companies have been subject to comparatively mild social pressure to control emissions and run-off. Thus, truck companies, while still subject to environmental regulation, are subject to somewhat less salient regulatory scrutiny by environmental agencies and less social scrutiny by environmental organizations.

Change in Research Design—Addition of Aggregate Industry-Wide Comparison of State Policy and Outcomes

In addition to the detailed case studies described above, we added a new component to the study that would compare the aggregate bus and truck fleets in California and Texas. Thus, the study now involves three parallel strands of investigation: (1) the state-wide comparison of aggregate bus and truck fleets, (2) the case-study work in California, and (3) the case-study work in Texas.

Strand 1—State-Wide Comparison: This strand compares Texas and California diesel emissions control policies and regulatory regimes and the effects these policies have had on their overall transit-bus and truck fleets. The detailed regulatory and policy history for this research has been completed, and the transit fleet data for both California and Texas have been obtained and analyzed. We hope to update the California transit-fleet data with data from 2005. In addition, state-wide truck fleet data from both states have been obtained and analyzed. A working paper presenting this research has been written and was presented at the Law and Society Association conference in Baltimore, MD, in July 2006.

Strand 2—California Case Studies: This strand of research compares two small and two tiny California trucking companies with excellent safety records to two small and two tiny California trucking companies with very average safety records, where safety records are used as a proxy for environmental performance. At each company, we have conducted in-depth semi-structured interviews with facility and fleet managers and have attempted to obtain a detailed description of its fleet, a history of the company’s contact with regulatory authorities, and a description of motivations for environmental efforts that the company has made. The interviews for this strand of the study have been completed, and the detailed descriptions of fleets have been obtained for all but two companies. All interviews have been transcribed. The analysis will initially be focused on understanding the ways and the extent to which regulation matters in shaping corporate environmental behavior in small firms, understanding the relative importance of regulation compared to other incentives and mechanisms of social control, and attempting to link these findings with actual emissions information.

Strand 3—Texas Case Studies: The third strand of the study is a Texas duplicate of the California study. This replication in a second state allows us to see if the results of our California work can be duplicated in a second jurisdiction. In Texas, two small companies with modern fleets, and two tiny companies with modern fleets are compared to companies of a similar size with older fleets (since fleet age is among the most important factors in driving emissions). Interviews in this strand have been conducted and transcribed, and we are currently analyzing the data.

Future Activities:

We hope to update the California transit fleet data as they become available from the state so that we have a better comparison with the Texas fleet data. We expect to complete the data coding and analysis from the California and Texas interviews by the end of March 2007, and expect to then prepare papers for publication in peer-reviewed journals and to present at the annual Law and Society Association meetings.

Journal Articles:

No journal articles submitted with this report: View all 2 publications for this project

Supplemental Keywords:

Porter Hypothesis, environmental management systems, environmental certification, self-regulation, voluntary agreements, corporate compliance.,, Scientific Discipline, INDUSTRY, Economic, Social, & Behavioral Science Research Program, Economics and Business, Small Businesses, Corporate Performance, Environmental Law, compliance assistance, motivators, voluntary programs, policy making, community involvement, corporate environmental behavior, environmental compliance determinants, corporate evironmental reform, enforcement impact

Progress and Final Reports:

Original Abstract

2005 Progress Report

Final