The Value of Environmentally Conscious Corporate Strategies

N. Darnall, J. Sarkis, and H. Paterson

Proceedings of the Third International Congress on Environmentally Conscious Design and Manufacturing, pp. 3-14

Across the board, the manufacturing industry is going "green." Environmentally friendly firms and their products are recognized by consumers and shareholders. Many consumers indicate that they are refusing to purchase products because of environmental concerns. The anecdotal evidence suggests that “green” corporations have a competitive advantage, however empirical analyses that verify these findings are limited. Testing this evidence has been difficult due to the lack of data. Current environmental regulations require firm specific reports on pollution prevention and information has become increasingly available. This paper examines the relationship of corporate pollution emissions, energy recovery, ans source reduction (recovery) to profitability indicators of a sample of Fortune 500 firms with data from the 1991-1992 Toxic Releases Inventory Database. The analyses show a significant relationship between both firm pollution and recovery and financial performance.

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