Apex ambition: Environmental management system certification in Chinese business groups

Area of Science:

• Business Strategy
• Environmental Management
• Organizational Behavior

Background:

• Business groups are key to sustainability, but their internal hierarchy's impact on environmental practices is understudied.
• Existing research focuses on financial performance and innovation, neglecting environmental decision-making within business groups.

Purpose of the Study:

• To investigate how hierarchical status within Chinese business groups influences environmental management decision-making.
• To examine the role of ISO 14001 certification as a proxy for environmental management strategies.

Main Methods:

• Logistic regression analysis of a dataset comprising 21,983 observations from 4,371 apex and non-apex firms (2009-2022).
• Focus on the adoption of environmental management system (EMS) certification.

Main Results:

• Apex firms are more likely to obtain EMS certification than non-apex firms, especially in non-state-owned and heavily polluting industries.
• Apex firms in high-pollution sectors show a stronger drive for certification; those in low-pollution sectors show less.
• Increased group affiliates decrease certification likelihood, while more green executives and regional environmental focus increase it.

Conclusions:

• Hierarchical positioning significantly impacts environmental strategy adoption within business groups.
• Industry pollution levels critically influence the propensity of apex firms to seek EMS certification.
• Internal (green executives) and external (regional focus) factors moderate the relationship between hierarchy and environmental certification.