1-s2.0-S0301479715300979-main2.pdf

Research article

The comprehensiveness of environmental management systems: The
influence of institutional pressures and the impact on environmental
performance

Thanh Nguyet Phan a, *, Kevin Baird b
a School of Business, University of Western Sydney, Parramatta Campus, Locked Bag 1797, Penrith South DC, NSW 2751, Australia
b Faculty of Business and Economics, Macquarie University, NSW 2109, Australia

a r t i c l e i n f o

Article history:
Received 9 October 2014
Received in revised form
28 May 2015
Accepted 4 June 2015
Available online 14 June 2015

Keywords:
Environmental management system
Environmental performance
Institutional theory

a b s t r a c t

This study contributes to the EMS literature by providing a more detailed insight into the comprehen-
siveness of environmental management systems (EMSs) by focusing on the intensity of use of envi-
ronmental management practices. In addition, the study examines the influence of institutional
pressures (coercive, mimetic and normative) on the comprehensiveness of environmental management
systems (EMSs), and the impact of EMS comprehensiveness on environmental performance. A mail
survey questionnaire was used to collect data from a random sample of Australian senior managers
across various industries. Both coercive and normative pressures were found to influence the compre-
hensiveness of EMSs. Specifically, the pressure exerted by the government, through the creation of
appropriate regulatory pressures and public incentives, and by employees, customers, professional
groups, the media, and community, influenced the comprehensiveness of the EMS. In addition, organi-
sations with more comprehensive EMSs were found to experience higher levels of environmental per-
formance. With more than 300,000 organisations worldwide adopting EMSs (ISO, 2013), the findings
provide an important insight into the relevance of EMSs. In particular, it is suggested that organisations
should endeavour to implement a more comprehensive EMS and be conscious of the role that coercive
and normative pressures play in influencing the comprehensiveness of their EMSs.

© 2015 Elsevier Ltd. All rights reserved.

1. Introduction

Increasing attention and concern over the environmental
impact of business has led organisations to actively seek ways to
minimise their exposure to environmental risk and take a proactive
approach to environmental management. The pressure exerted on
organisations to improve their environmental management can be
attributed to regulatory bodies, increased public awareness and
media coverage of environmental issues, and organisations’
awareness of the need to improve efficiency through reducing
environmental costs (Tinsley and Pillai, 2006; Deegan, 2003;
Sullivan and Wyndham, 2001).

A growing number of businesses have invested significant re-
sources in the implementation of an environmental management
system (EMS), a systematic approach which requires the

integration of environmental issues into every aspect of business
management (Tinsley and Pillai, 2006). By 2005, more than 111,000
organisations worldwide had adopted and certified their EMSs to
the international environmental management standard ISO 14001
(ISO, 2013), and thousands more had adopted other types of EMSs
(Darnall et al., 2008a). The number of ISO14001 compliant EMSs
had increased to 301,647 in over 170 countries around the world by
2013 (ISO, 2013).

While many authors advocate the merits of EMSs (Tinsley and
Pillai, 2006; Sullivan and Wyndham, 2001; Steger, 2000), empir-
ical studies have been inconsistent in respect to the approach used
to define and operationalize EMSs. The majority of studies have
incorporated a simplistic approach of inquiring whether or not an
organisation has adopted an EMS. Such an approach is problematic
given respondents have different interpretations of the exact na-
ture of an EMS. Furthermore, even if the users of an EMS were
successfully captured, this approach ignores the comprehensive-
ness of the EMS (Edwards and Darnall, 2010) and hence, fails to
distinguish between EMS users. Alternatively, other studies

* Corresponding author.
E-mail address: [email protected] (T.N. Phan).

Contents lists available at ScienceDirect

Journal of Environmental Management

journal homepage: www.elsevier.com/locate/jenvman

http://dx.doi.org/10.1016/j.jenvman.2015.06.006
0301-4797/© 2015 Elsevier Ltd. All rights reserved.

Journal of Environmental Management 160 (2015) 45e56

(Johnstone and Labonne, 2009; Anton et al., 2004; Khanna and
Anton, 2002) have used the total number of environmental prac-
tices implemented by organisations as a proxy for the compre-
hensiveness of EMSs. While this approach is better in the sense that
it explores the nature of the environmental management practices
utilised by organisations, it fails to take into account variations in
the intensity with which specific practices are used by different
organisations. Accordingly, this approach provides an opportunity
to ‘green wash’ with organisations able to create the impression
that they are committed to a number of environmental practices
without really engaging in environmental management activities
(Cho and Patten, 2007; O’Dwyer, 2002).

Since EMSs are developed in different organisational settings
and organisations follow different types of EMS (Darnall et al.,
2008b), it is expected that they differ across organisations in
respect to the comprehensiveness of their coverage (Anton et al.,
2004). Accordingly, the first objective of this study is to attempt
to overcome the limitations of previous studies by providing a more
detailed insight into the nature of EMSs within organisations.
Specifically, we operationalize the comprehensiveness of EMSs in
respect to the intensity of use of nine environmental practices
identified as important components of an EMS in the literature
(Anton et al., 2004; Henriques and Sadorsky, 2007a).

In conjunction with the incorporation of an improved approach
of measuring EMS comprehensiveness, the study also aims to
contribute to the contingency based literature examining the an-
tecedents or determinants of EMS comprehensiveness. Previous
literature has examined the association between organisational
factors such as size (Edwards and Darnall, 2010; Gonz!alez-Benito
and Gonz!alez-Benito, 2006), quality management systems
(Johnstone and Labonne, 2009; Henriques and Sadorsky, 2007a),
financial resources (Clarkson et al., 2011; Johnstone and Labonne,
2009), and management capabilities (Sangle, 2010; Delmas and
Toffel, 2004) with the use of EMSs and other proactive environ-
mental management initiatives. Other research has investigated
the influence of the institutional pressures exerted by a variety of
stakeholders such as government (Zhu et al., 2013; Uchida and
Ferraro, 2007; Delmas and Toffel, 2004), customers (Sangle, 2010;
Khanna and Anton, 2002; Darnall et al., 2000), employees
(Darnall et al., 2010; Kirkland and Thompson, 1999), and the
community (Sarkis et al., 2010; Henriques and Sadorsky, 1996) on
environmental management initiatives.

Many authors such as Schaefer (2007) and Delmas (2002)
indicate that institutional pressures are the predominant driver of
the adoption of proactive environmental practices. Accordingly,
this study places emphasis on the effect of institutional pressures
on EMS comprehensiveness. The extant literature has tended to
focus on the impact of specific stakeholder groups on the use of
environmental management initiatives. Rather than concentrating
on specific stakeholders, this study contributes to the literature by
utilising DiMaggio and Powell’s (1983) theoretical construct of
institutional isomorphism to gain an insight into the influence of an
organisation’s overall institutional environment.

Given the majority of studies in the extant literature are pre-
scriptive (Delmas and Toffel, 2004; Delmas, 2002) and/or adopt a
case-based approach (Schaefer, 2007; Darnall et al., 2000), the
second objective of the study is to contribute to the literature by
adopting an empirical approach to examine the influence of insti-
tutional pressures on the comprehensiveness of EMSs. Further,
since the few extant empirical studies are limited to large US or
European organisations operating in the manufacturing industry
(Yu and Ramanathan, 2014; Boiral and Henri, 2012; Anton et al.,
2004; Henriques and Sadorsky, 1996), this study addresses the
dearth of studies examining this relationship in alternate industries
in Australia.

Finally, in response to Yu and Ramanathan’s (2014) claim that
there is a research gap in the literature regarding the clarification of
the effect of environmental management practices on environ-
mental performance, the third objective of the study is to investi-
gate the association between EMS comprehensiveness and
environmental performance. There has been ongoing debate as to
whether it is worthwhile to be “green”, or environmentally pro-
active, with mixed findings reported in relation to the association
between EMSs and environmental performance (Iraldo et al., 2009;
Hertin et al., 2008; Johnstone et al., 2004; Melnyk et al., 2003). Such
mixed findings can be attributed to the way in which EMSs and
environmental performance have been operationalised in prior
studies.

Accordingly, this study aims to provide further insight into this
association by incorporating a more comprehensive approach to
the measurement of both EMSs and environmental performance. In
terms of EMSs, as mentioned previously, many studies fail to ac-
count for the variation in the comprehensiveness of EMSs (Anton
et al., 2004) and therefore this study incorporates an approach
which focuses on the intensity of use of environmental manage-
ment practices associated with an EMS. Similarly, in examining
environmental performance, we aim to provide a broader
perspective than previous studies which have simply focused on
examining the environmental impact generated by operations such
as an electricity index (Friedrich et al., 2011), total material re-
quirements (Baboulet and Lenzen, 2010), greenhouse gas emissions
(Psaraftis and Kontovas, 2010), and toxic releases (Patten, 2002).
Henri and Journeault (2010) argue that this approach limits the
measurement of environmental performance to one aspect.
Consequently, we utilise Henri and Journeault’s (2010) broader
approach which incorporates measures covering different di-
mensions of environmental performance.

2. Theory and hypotheses development

2.1. Environmental management system (EMS)

An EMS has been defined by the British Standards Institute
(1992) as “the organisational structure, responsibilities, practices,
procedures and resources for determining and implementing
environmental policy”. An EMS is a transparent and systematic
process with the objective of “prescribing and implementing
environmental goals, policies, and responsibilities, as well as reg-
ular auditing of its elements” (Steger, 2000, p. 24). The establish-
ment of an EMS provides a wide range of benefits. For instance,
many organisations have reported that environmental manage-
ment has led to reduced environmental risks, better management
of regulatory compliance, improved utilisation of resources and
employees, and improved public reputation (Tinsley and Pillai,
2006; Sullivan and Wyndham, 2001; Steger, 2000).

Various management standards have been introduced to assist
organisations in developing formalised environmental manage-
ment systems. The first of these was the UK national standard BS
7750 which was created in the early 1990s (Schaefer, 2007). The
European Eco-Management and Audit Scheme (EMAS) was then
launched in 1995 (Tinsley and Pillai, 2006), while the most
commonly referred to international standard for environmental
management, ISO 14001, which was based on BS 7750, was created
in 1996 (Tinsley and Pillai, 2006). The number of certifications to
ISO 14001 has been rising, with 301,647 registrations worldwide in
2013, a significant increase from 13,994 registrations in 1999 (ISO,
2013). In Australia there had been 3339 certifications issued to
organisations by the end of 2012 (ISO, 2013). The key elements of an
ISO 14001 EMS include: development of an environmental policy;
identification of environmental aspects and evaluation of

T.N. Phan, K. Baird / Journal of Environmental Management 160 (2015) 45e5646

associated environmental impact; establishment of relevant legal
and regulatory requirements; development and maintenance of
environmental objectives and targets; implementation of a docu-
mented system, including elements of training, operational con-
trols and dealing with emergencies; monitoring and measurement
of operational activities; environmental internal auditing; and
management review of the system to ensure its continuing effec-
tiveness and suitability (Whitelaw, 2004).

It is important to note that the ISO 14001 standard does not
specify a particular level of environmental performance that or-
ganisations need to achieve. Rather, it focuses on requiring orga-
nisations to comply with the specified characteristics of the system
with such compliance expected to assist organisations in achieving
their own environmental objectives (Melnyk et al., 2003). However,
given the emphasis placed on environmental management prac-
tices is expected to differ across organisations (Darnall et al.,
2008b), it is imperative that we examine the comprehensiveness
of EMS.

2.2. The comprehensiveness of EMSs

The adoption of EMSs and the certification of EMSs is voluntary,
and therefore there is often variation in the extent to which orga-
nisations utilise different environmental management practices
comprising an EMS (Coglianese and Nash, 2001). Consequently,
EMSs can differ significantly across organisations in the compre-
hensiveness of their coverage and the ambitiousness of their ob-
jectives (Anton et al., 2004).

Many prior studies on EMSs have utilised the dichotomous
measure which only inquires whether or not an organisation has
implemented an EMS, thereby failing to account for the variation in
the use of EMSs (Zhu et al., 2013; Gonz!alez-Benito et al., 2011;
Johnstone, 2007; Melnyk et al., 2003). Given the flexibility in the
extent to which they adopt different EMS practices, some organi-
sations may implement a limited EMS involving a minimum level of
environmental commitment (Gonz!alez-Benito et al., 2011). For
instance, some organisations may only implement an EMS for the
purpose of avoiding the scrutiny of different groups of stakeholders
rather than seeking environmental improvements (Anton et al.,
2004). In these cases, EMSs represent a symbolic effort to
improve public image (Bansal and Clelland, 2004). Accordingly,
emphasis should be placed on the characteristics and/or the
comprehensiveness of the EMS as opposed to whether an EMS is
adopted.

Anton et al. (2004) was the first study examining the compre-
hensiveness of EMSs with an EMS being considered more
comprehensive if it includes a greater number of environmental
practices. Several studies such as Darnall et al. (2010) and Johnstone
and Labonne (2009) have followed the approach used in Anton
et al. (2004). However, these studies measure the comprehen-
siveness of EMSs by simply adding the number of practices un-
dertaken by firms. Using the sum of these practices to proxy for
EMS comprehensiveness does not account for the variation across
organisations in the intensity with which the same practices are
used by different organisations. For example, two organisations
may both have environmental audits, but they can differ in terms of
how frequent these audits are undertaken. Accordingly, in to
take into consideration the intensity of use, this study examines the
comprehensiveness of EMSs by (1) examining the use of a number
of environmental practices recognised as important components
constituting an EMS rather than just inquiring whether or not an
EMS is in place, and (2) inquiring as to the extent to which each
practice is used rather than just counting the number of practices
used.

2.3. The association between institutional pressures and EMS
comprehensiveness

Institutional theory highlights the importance of social and
cultural pressures on organisational structures and practices (Scott,
1992). In response to pressures from their institutional environ-
ment, organisations adopt structures and practices that are
considered legitimate and appropriate organisational choices, even
though there is uncertainty regarding their actual usefulness
(Carpenter and Feroz, 2001). Institutional theory has been widely
recognised as a prevalent and powerful justification for organisa-
tional actions (Dacin et al., 2002). It was also maintained that the
institutional approach has provided significant insights into the
importance of the institutional environment to organisational
structure and actions (Teo et al., 2003). DiMaggio and Powell (1983,
p. 149) introduced the concept of isomorphism, a process that
“forces one unit in a population to resemble other units that face
the same set of environmental conditions”. Organisations adopt
similar structures and practices to gain legitimacy and strive for
social conformity in response to the pressures from their in-
stitutions (Hoffman, 1999). DiMaggio and Powell (1983) suggest
that managerial decisions are greatly influenced by coercive,
mimetic and normative isomorphism. Coercive isomorphism re-
sults from “both formal and informal pressures exerted on orga-
nisations by other organisations upon which they are dependent”
(DiMaggio and Powell, 1983, p. 150). Mimetic isomorphism hap-
pens when organisations imitate other organisations in response to
uncertainty (DiMaggio and Powell, 1983). Normative isomorphism
is primarily associated with professionalisation (DiMaggio and
Powell, 1983). This study proposes that the coercive, mimetic and
normative pressures imposed on organisations by different groups
of stakeholders (including governments, regulators, suppliers,
customers, competitors, industry associations and the community)
influence the comprehensiveness of EMSs.

2.3.1. Coercive pressures
Coercive pressures are “formal and informal pressures exerted

on organisations by other organisations upon which they are
dependent and by cultural expectations in the society within which
organisations function” (DiMaggio and Powell, 1983, p. 150). In
relation to environmental issues, coercive pressures are typically
associated with government and regulatory bodies (Sarkis et al.,
2010). In particular, mandatory environmental regulations have
been proved to be an effective tool in motivating organisations to
improve their environmental management (Rivera, 2004; Winter &
May, 2001; Henriques and Sadorsky, 1996). For example, the fines
and penalties associated with regulatory non-compliance,
including the loss of operating permits, constrain the strategic ac-
tions of organisations (Darnall et al., 2010, 2008b; Henriques and
Sadorsky, 1996). Furthermore, the threat of legal sanctions is
perceived to be the main reason why organisations implement
proactive environmental strategies (Hoffman, 2001).

Environmental legislation in Australia imposes liabilities not
only on corporations but also on directors and managers for the
offences of their corporations, thereby forcing businesses to mini-
mise their environmental impacts to comply with legal re-
quirements. For example, under the Protection of the Environment
Operations Act 1997, the most serious environmental protection
offences carry maximum penalties of five million dollars for cor-
porations and one million dollars and/or seven years imprisonment
for individuals (EPA NSW, 2014). It is expected that organisations
that face greater coercive pressures will devote more effort and
resources to minimising environmental impacts and costs.

H1. Organisations subject to greater coercive pressures are

T.N. Phan, K. Baird / Journal of Environmental Management 160 (2015) 45e56 47

expected to use a more comprehensive EMS.

2.3.2. Mimetic pressures
Mimetic isomorphism refers to the fact that in situations where

there is uncertainty, organisations may “limit the selection of
structures and practices to those structures and practices that are
being used by organisations who they view as being successful in
the institutional environment” (Carpenter and Feroz, 2001, p. 571).
Hence, organisations mimic other organisations in to gain
legitimacy (DiMaggio and Powell, 1983; Meyer and Rowan, 1977)
and/or to minimise the risk of a drop in competitive advantage
(Malmi, 1999; Abrahamson and Rosenkopf, 1993). Mimicry has
been found to be relevant in explaining management activities
(Rikhardsson et al., 2005; Abrahamson, 1991). It can also be a
motivation for management to develop a system that provides in-
formation for evaluating sustainability issues (Schaltegger and
Burritt, 2010). In the context of environmental management, or-
ganisations face general mimetic pressures from market leaders
who “engage in activities so far beyond compliance that they raised
the bar environmentally for everyone competing in their industry”
(Sharfman et al., 2004, p. 26). Organisations facing such strong
mimetic pressures are expected to strive to improve their envi-
ronmental management initiatives in to remain competitive.
For example, Zhu and Geng (2013) found that mimetic drivers were
an important motivation for Chinese manufacturers to implement
extended supply chains to achieve Energy Saving and Emission
Reduction goals.

H2. Organisations subject to greater mimetic pressures are ex-
pected to use a more comprehensive EMS.

2.3.3. Normative pressures
Normative pressures arise from social obligation or pro-

fessionalisation, and “generally take the form of rules-of-thumb,
standard operating procedures, occupational standards, and
educational curricula” (Hoffman, 1999, p. 1999). Industry associa-
tions document their working conditions to legitimise their pro-
fessional autonomy (Darnall et al., 2008b). Normative pressures
have been found to encourage organisations to implement envi-
ronmental practices in to be perceived as having legitimate
organisational activities (Zhu and Geng, 2013). The normative
pressures that organisations face to improve their environmental
management can be manifested in many ways. Internally, in or-
ganisations with strong normative integration, evidenced by
greater emphasis on performance, accountability and environ-
mental policy, the corporate values and beliefs will push organi-
sations to extend their environmental management practices
beyond compliance (Sharfman et al., 2004). Such pressure is even
more likely if organisations have a high number of employees who
are concerned about environmental issues. Furthermore, em-
ployees can play an important role in the implementation of EMSs,
as they are often the originators and receivers of an organisation’s
proactive environmental activities (Sarkis et al., 2010).

Externally, normative pressures can be imposed on organisa-
tions through a variety of sources, including customers, profes-
sional groups, media and the community. Customers have proven
to be a significant motivator for organisations to adopt environ-
mental management practices. For example, Henriques and
Sadorsky (1996) found that customers exerted the second highest
pressure on Canadian firms to adopt an environmental plan. In
addition, Zhang et al. (2008) also found that pressures from cus-
tomers played a positive role in engaging organisations to improve
environmental management performance.

Professional groups also influence the use of environmental

management practices. In particular, they pay a great deal of
attention to upholding a good environmental reputation to prevent
increased scrutiny from regulators, environmentalists, and the
media, which may result in the introduction of new regulations
(King and Lenox, 2000). Furthermore, organisations that are
members of a particular industry group are likely to exhibit a higher
level of environmental innovation as a result of their internal
transfer of knowledge (Ferreira et al., 2010).

Schaefer (2007) suggested that an important reason for the
adoption of EMSs is the need to improve external legitimacy given
the increased public scrutiny with regards to environmental issues.
For example, according to a survey of public opinion by the New
South Wales Office of Environment and Heritage (OEH, 2012), 78%
of people said they were concerned to some extent about envi-
ronmental problems with the environment ranking in the top five
issues that the state government should focus on. Furthermore, the
State of Climate Report 2012 revealed that the concentration of
carbon dioxide in 2011 was “higher than at any time for the past
800,000 years” (CSIRO, 2012, p.8) and that the “annual-average
daily maximum temperatures have increased by 0.75 !C since 1910”
(CSIRO, 2012, p.3). These findings will further raise public aware-
ness and concern towards environmental issues, with Henriques
and Sadorsky (2013) arguing that community groups can exert
their power through the ability to lobby the regulatory system, and
influence consumer purchasing patterns through media attention.

H3. Organisations subject to greater normative pressures are ex-
pected to use a more comprehensive EMS.

2.4. The association between EMS comprehensiveness and
environmental performance

In addition to examining the antecedents of EMS comprehen-
siveness, the study also examines the influence of EMS compre-
hensiveness on environmental performance. Environmental
performance refers to “the impact of an organisation’s activities on
the environment, including the natural systems such as land, air
and water as well as on people and living organisms” (Langfield-
Smith et al., 2009, p. 859). As environmental issues are becoming
more important to a broad range of stakeholders, including con-
sumers, shareholders, potential investors, creditors, regulators,
employees and the general public, there is an increased demand for
corporate environmental performance information (Ilinitch et al.,
1998). A range of measures have been developed by different
groups, such as regulatory agencies, the business press and cor-
porations themselves, to capture various aspects of environmental
performance (Ilinitch et al.,1998). However, Lober (1996) notes that
although judgements are frequently made about which company is
“greener”, there is no clear or agreed upon definition of “green-
ness”, or in other words, what constitutes environmental perfor-
mance. Similarly, Henri and Journeault (2010) state that there is a
significant lack of consensus on the definition and operationalisa-
tion of this concept.

As previously mentioned the measurement of environmental
performance using environmental impact measures such as the
electricity index (Friedrich et al., 2011), total material requirements
(Baboulet and Lenzen, 2010), greenhouse gas emissions (Psaraftis
and Kontovas, 2010), and toxic releases (Patten, 2002) limits the
scope of this multidimensional concept to only one aspect. Rather,
consistent with Henri and Journeault (2010), this study evaluates
environmental performance using an instrument which measures
the beneficial outcomes of organisational environmental capabil-
ities. Specifically, Henri and Journeault (2010) required respondents
to indicate the extent to which environmental practices have led to
various types of benefits, including reductions in material/process/

T.N. Phan, K. Baird / Journal of Environmental Management 160 (2015) 45e5648

production costs, reductions in the costs of regulatory compliance,
increased process/product efficiency, and better relationships with
stakeholders.

In the environmental management literature, many studies
have examined the relationship between EMSs and environmental
performance (Iraldo et al., 2009; Hertin et al., 2008; Bansal and
Clelland, 2004; Johnstone et al., 2004; Dahlstr€om et al., 2003;
Melnyk et al., 2003; Schucht, 2000) with mixed results. For
example, Johnstone et al. (2004) found that EMSs played an
important role in motivating organisations to undertake measures
to improve their environmental performance. The use of EMSs was
found to be particularly important in controlling waste water and
air emissions and reducing environmental impacts from accidents.
Similarly, Schucht (2000) reported that the adoption of EMSs had a
significant influence on waste generation, resource use and water
consumption. Finally, Iraldo et al. (2009) reported the positive
impact of well-designed EMSs on environmental performance.

Alternatively, other studies have found little or no evidence of
improved environmental performance. For example, Hertin et al.
(2008) only found a weak link between EMSs and environmental
performance in the manufacturing sector in six EU countries.
Dahlstrom et al. (2003) did not find a significant relationship be-
tween the adoption of an EMS and actual performance, although
having an EMS was found to improve a number of procedural as-
pects of environmental management such as plant maintenance,
process operation, implementation of authorisation requirements
and the recording of information.

There is scant research examining the impact of the compre-
hensiveness of EMSs on environmental performance, and hence
this study aims to fill this gap in the literature. There are a number
of reasons why a comprehensive EMS can lead to improved per-
formance. Organisations that implement a more comprehensive
EMS demonstrate a greater …