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- W849868980 abstract "(ProQuest: ... denotes formulae omitted.)INTRODUCTIONThere has been a recent trend in business and information technology (IT) to become more environmentally conscientious (Green). One significant driver of this trend has been regulatory pressures. In 2009, the U.S. House of Representatives passed the American Clean Energy and Security Act, which was designed to restrict the amount of greenhouse gases in an effort to fight global warming and climate change through cap and trade (House Bill 2454, 2009). While it was never enacted into law, the bill did raise the profile and threat associated with carbon emissions. In addition, the United States Environmental Protection Agency (U.S. EPA) has continued to expand its authority through the Clean Air Act Amendments of 1990, providing benefits of reduced toxic emissions but at a cost to business (U.S. EPA, 2011).In addition to regulatory pressures, business and IT have also determined that Green business activities also possess financial incentives. GreenBiz.com (GreenerComputing Staff, 2010) also reports that companies are implementing sustainable strategies, initiatives and events in order to meet the changing needs of their customers. In May 2009, Symantec, a major security software company, released its Green IT Report which found that Green IT budgets are rising, IT is willing to pay a premium for Green equipment, and Green IT initiatives have become more of a priority. In addition, Newsweek (2011) reports that companies ranked highly in their Green surveys are approaching Green projects, even in a poor economic climate and a declining threat of regulation such as cap and trade. These instances, along with anecdotal evidence from cases studies, would indicate that financial benefits could also be a significant driver of Green initiatives.While many sites such as GreenBiz.com are trumpeting the benefits of being Green, it is not clear whether a Green strategy is financially beneficial or simply a means of survival. If Green activities are essentially a necessary cost of doing business, then it will be important for regulatory bodies to determine the appropriate level of effort that companies exert to ensure societal well-being. However, if Green activities do possess financial benefits that give successful companies a strategic advantage, then market forces should challenge firms to become more Green without the pressures from regulatory bodies. Anecdotal evidence is mixed in this regard. After examining the sustainability initiatives of 30 large corporations, Nidumolu, Prahalad, and Rangaswami (2009) concluded that sustainability provides organization and technological innovations that will result in additional revenues and profits. Furthermore, organizations are also wasteful in production when many of their resources could be reused. Recycling can be a great method for lowering waste outputs and reducing costs. However, companies like Caterpillar have spent billions of dollars to meet emissions standards set by the EPA, passing along the higher costs in the price of its machines. We are going to meet our social obligation, but society is going to pay for it, said Jim Parker, Caterpillar vice president of distribution in the Americas (Gordon, 2011).The purpose of this study is to empirically evaluate whether companies reputed to have a Green focus are benefitting financially from their efforts. Newsweek has created a ranking system that incorporates a company's environmental impact (emissions and water usage), management policies, and management disclosures. These three factors are used in determining a composite figure used to rank the firms by level of Greenness. Furthermore, some industries have more or different challenges in conducting Green activities relative to others (i.e. energy companies vs. technology). However, if a firm is a leader in its industry associated with Green activities, then it should have better financial results relative to its less-Green peers if a Green focus does result in improved financial performance. …" @default.
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- W849868980 date "2014-04-01" @default.
- W849868980 modified "2023-09-28" @default.
- W849868980 title "Does Being Green Result in Improved Financial Performance" @default.
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