A content-analytic understanding of factors contributing to the success of proactive environmental strategy

Against the backdrop of an ecocentric paradigm, this study applies Natural Resource Based view (NRBV) and stakeholder theoretic tenets to better understand the factors contributing to the success of proactive environmental initiatives. The study uses data that are obtained through content analysis of the sustainability reports of thirty environmentally reputed companies that are part of Global Environmental Management Initiative (GEMI) consortium. Partial Least Squares (PLS)-based SEM is used to analyze the relationships among the constructs of interest. The study finds that although firms with strategic environmental orientation adopt proactive environmental initiatives, establish innovation infrastructure, and communicate with stakeholders, the communications with stakeholders are not deep enough to reflect the environmental practices adequately. Inadequate stakeholder communication hinders environmental product and process improvements, which deters financial payoffs.