Over the past three decades, organizations have
come under growing pressure to manage and
improve their environmental performance (e.g.
Hart, 1997; Gladwin, 1999; Starkey and Welford,
2001). Recently, this shift has been gainingmomentum
due to a number of interrelated and reinforcing
factors. Among the most important of these are:
(1) The relentless deterioration of the environment
accompanied by ever clearer and more
compelling scientific evidence of dire consequences.
1 In response, most countries have
adopted new regulations, although significant
differences exist in the quantity and rigor of
these measures and in enforcement effectiveness
(WRI, 2001). Many other countries havealso implemented various economic instruments,
such as environmental taxes, rebate
schemes and tradable pollution permits;
(2) Firms are becoming increasingly aware of
their own negative impact on the environment.
This is the result of such policy initiatives as
Toxic Release Inventory (TRI).2 Certifications
to international standards, such as ISO 14001,
also require some investigation into such effects
that is often revealing when undertaken. These
values also serve as useful benchmarks for
improvement in line with the management
adage, ‘What gets measured, gets done’;
(3) An increased incidence of lawsuits, criminal
penalties, and jail sentences has also greatly
elevated anxiety among top management in
many industries about the consequences of
violations or industrial accidents;(4) General acceptance among executives that
environmental performance need not be costly
to the firm and, in some cases, may yield
handsome returns (Hart, 1999; Reinhardt,
1999; Hawken, Lovins and Lovins, 2000). This
potential has been underscored by numerous
anecdotal accounts, case studies, and a growing
number of empirical studies;
(5) A growing consensus among key stakeholders
(e.g. customers, employees, community organizations,
green groups) for greater environmental
responsiveness. Importantly, the internet
and other modern communication technologies
have greatly empowered these stakeholders to
obtain more information about firms activities,
to publicize it, and to mobilize action campaigns.
Given all these developments, it should not be
surprising that many firms have responded. Such a
generalized shift from relatively reactive postures
to more proactive environmental management
strategies has been widely noted (Welford, 1996;
Berry and Rondinelli, 1998; Brown and Karagozoglu,
1998). At the same time, there remains
marked variation both within and between industries–
and also within and between countries–in
the genuineness of firms’ commitment to environmental
performance and in the specific approaches
taken.
In the ’90s, efforts were made to create generalized
statements of good environmental practice, the
most well-known being the ‘Eco-Management and
Audit Scheme’ of the EU and the ISO 14000 series
of documents of the International Organization for
Standardization (Geneva).3 As with other Voluntary
Consensus Standards (VCSs), the response
to ISO 14001 certification has also been highly
variable.4 In Dec. 1999, only three years after
publication as an international standard, there
were already 14106 certified facilities world-wide
(http://www.iso.ch/presse/survey9.pdf). These certifications
have been highly concentrated in Europe
(52%) and Japan (22%).This pattern of variation is especially pronounced
in Asia. Japanese firms have clearly embraced ISO
14001, due in large part to the fact that it was perceived
as a ‘second license to export’ and because
so many government agencies and industry associations
promoted it (e.g. the electronic industry).
There has also been substantial interest in ISO
14001 certifications in Taiwan, Korea, Malaysia
and Thailand (each having over 200 certifications).
Elsewhere, however, there has been relatively less
interest. Singapore and Hong Kong each have
about 100 certifications, while in countries such
as the Philippines and Vietnam ISO 14001 certification
would be much less relevant for most
local manufacturers as exports are low, enforcement
of regulations is a problem, and stakeholders
pressures are weak. In mainland China, although
interest in the standard is rapidly growing, the
response has been more sectorial, with managers
of state-owned firms and joint ventures being more
sensitive to government interests in the standard
(Cheng, 1999; Chen and Wong; 2000).
Interestingly, these examples also serve to suggest
that relatively few firms seek ISO 14001 certification
primarily to improve their environmental
performance. Instead, the majority of firms in Asia
seek EMS certifications primarily for economic reasons,
such as to ensure compliance with existing
regulations, to curry favor with major customers or
officials, or more generally to enhance their reputation.
Should a firm’s environmental performance
also improve, of course that’s a welcome, albeit
secondary, outcome from the firm’s perspective.6
Of course, such priorities are not unique to Asian
firms and would be expected from all economic
organizations (Reinhardt, 1999). Indeed, it would
be na¨ıve to think otherwise and it is this secondary
environmental effect that is the main selling point
of such standards to government policymakers and
other stakeholder groups.
Assuming that ISO 14001 actually provides a
useful framework for an effective EMS, even a
relatively widespread disinterest in the environment
by the business community should not in
theory undermine its potential contribution to
the environment. In granting ISO 14001 certification,
a registrar is attesting that all the basiccomponents of a workable EMS are in place. Thus,
even an environmentally rapacious facility that
is certified to the standard should improve over
time in the presence of such a system and the
standard’s underlying ‘PDCA’ logic.7 For example,
ISO 14001 requires methodologies for assessing
environmental aspects and impacts (i.e. how the
firm may potentially or actually is affecting the
environmental through its operations) as well as for
stakeholders’ expectations. These assessments are
presumed to inform a policy statement (required
and available to the public) where top management
prioritizes environmental performance and
promises to comply with all relevant legal requirements.
This policy statement is to lead to objectives
and targets for improvement, and periodic management
reviews at the end of the cycle are intended
to critically review progress in the spirit of continual
improvement. Should all, or even most of
these elements be put in place, it can be hoped that
a skeptical top management group would develop
a more genuine interest in environmental performance
improvement over time.
Accordingly, there are two key sets of relationships
that underpin the success of this framework
in environmental terms. First, that a workable
EMS will, in turn, promote environmental protection.
Second, that effective third party certification
will ensure a workable EMS (i.e. based on the standard).
Although the first relationship is generic in
that it speaks to the value of an EMS as specified
in the ISO 14001, the second is more equivocal in
that the system of accreditation is more regionally
dependent. Thus, a firm may opt for an internationally
renowned registrar in order to strengthen
stakeholder perceptions; however, it may just as
easily choose ‘the path of least resistance’ by seeking
a lenient, or even corruptible, registrar. The
prospect of easy certification eats at the very foundations
of the framework.
The purpose of this study is to empirically examine
these relationships using a sample of certified
facilities in the Hong Kong Special Administrative
Region (HKSAR). Although the HKSAR is now
part of China, it is governed largely autonomously
under the ‘one country – two systems’ framework.
Thus, within Asia the HKSAR provides an interesting
relatively ‘free market’ context where pollution
problems and their costs are becoming increasingly
evident, many firms depend on access to foreignmarkets, and the rule of law is well established
and respected.
