Doing Well by Doing Good : Drivers of Firms’ Economic Motivation for Environmental Management Control System Implementation

This paper contributes to the field of environmental management control systems (EMCSs). We approach EMCSs from an economic perspective and theorize internal and external contingency factors that drive both the economic performance and the decision to implement an EMCS. We argue that the level of environmental costs induced by a firm’s pollution intensity drives the economic benefits and thus the firm’s economic motivation to implement an EMCS. We further expect that this relationship is contingent on the level of environmental awareness in the institutional environment (i.e., Green parties, Greenpeace, and media attention). We develop a framework to assess the extent of EMCS implementation on a multinational and longitudinal dataset comprising 5,599 firm-year observations from Europe and the USA between 2005 and 2016. The results provide support for our predictions. We discuss implications for policy makers and society