How firms use ISO 14001 when engaging Stakeholders

What is it about?

An ongoing challenge for managers is to define and benefit from their firm's environmental management practices. Firms that seek stakeholder recognition of their practices, or face stakeholder pressure for evidence of improvement, increasingly use management standards such as ISO14001. Such standards, however, may encourage firms to use more reportable rather than embedded environmental management practices. In this study, we look at the question of "why some firms use environmental management standards to improve practices relative to firms that use them to deflect attention". We find stakeholder pressure on firms for improved practices can interact with firms’ expectations of related rewards to influence environmental management outcomes.

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Why is it important?

This study is one of the first to assess differences that distinguish between stakeholder type and choice of environmental management practices. We grouped firms’ practices according to their emphasis on either rewards of stakeholder recognition or internal operational benefit. Our results confirm a growing trend in empirical research showing firms do not necessarily adopt environmental management standards for their goals of practice improvement. The study contributes to use of stakeholder theories to understand firm level adoption of and benefit of environmental management practices.