J Bus Ethics DOI 10.1007/s10551-015-2960-2 Internalization of Environmental Practices and Institutional Complexity: Can Stakeholders Pressures Encourage Greenwashing? Francesco Testa1 • Olivier Boiral2 • Fabio Iraldo1 Received: April 2015 / Accepted: 16 November 2015 Ó Springer Science+Business Media Dordrecht 2015 Abstract This paper analyzes the determinants underlying the internalization of proactive environmental management proposed by certifiable environmental management systems (EMSs) such as those set out in ISO 14001 and the European Management and Auditing Scheme (EMAS) Using a study based on 232 usable questionnaires from EMAS-registered organizations, we explored the influence of institutional pressures from different stakeholders and the role of corporate strategy in the ‘‘substantial’’ versus ‘‘symbolic’’ integration of environmental practices The results highlighted that although institutional pressures generally strengthen the internalization of proactive environmental practices, the influence of stakeholders can either support the integration of these practices or encourage their superficial adoption For example, while pressure from suppliers and shareholders contribute to corporate greening, pressure from customers and industrial associations tend to encourage greenwashing (i.e., the superficial and misleading adoption of environmental practices) Product quality-oriented strategies also positively influence EMS internalization The paper sheds & Francesco Testa f.testa@sssup.it; francesco.testa@sssup.it Olivier Boiral Olivier.Boiral@mng.ulaval.ca Fabio Iraldo fabio.iraldo@sssup.it Sant’Anna School of Advanced Studies – Institute of Management, Piazza Martiri della Liberta` 33, 56127 Pisa, Italy Faculte´ des Sciences de L’administration, De´partement de Management, Universite´ Laval, Pavillon Palasis-Prince, 2325, rue de la Terrasse, Local 1638, Que´bec, QC G1V 0A6, Canada light on the institutional complexity underlying the substantial versus symbolic implementation of environmental practices, and questions the dominant isomorphic view of EMS adoption The paper also bridges the gap between complementary approaches on corporate greening, notably neo-institutional and stakeholder theories Keywords Environmental management system Á Environmental strategy Á Greenwashing Á Institutional complexity Á Stakeholders Introduction The adoption of certifiable environmental management systems (EMSs) such as those proposed by the ISO 14001 and EMAS standards has become common practice for corporate greening in most sectors worldwide ISO 14001 was launched in 1996 and is the most widespread EMS standard, with more than 300,100 organizations certified in 2013 (ISO 2013) The Eco Management and Audit Scheme (EMAS) was introduced by the European Commission in 1993 and has been available to non-EU organizations since 2009 In 2015, approximately 3000 organizations are registered in EMAS, covering approximately 9800 sites (European Commission 2015) Despite a few differences in the requirements, the EMAS and ISO 14001 standards are based on the same type of management system This system echoes the Deming cycle (Darnall 2006; Boiral 2007): plan (identification of significant environmental aspects, policy, objectives, and improvement programmes for the environment), (training, communication, operational control, etc.), check (performance measurement, non-compliance and corrective actions, and audits), and act (management 123 F Testa et al review and resources allocation) These principles also cover the main characteristics of the more ‘‘proactive’’ environmental management practices, including top management support, development of environmental indicators, and employee training and involvement (Buysse and Verbeke 2003; Darnall et al 2010; Henriques and Sadorsky 1996) The determinants and implications of these EMSs have been widely studied (e.g., Bansal and Hunter 2003; Delmas 2002; Glachant et al 2002; Heras-Saizarbitoria and Boiral 2013; King et al 2005) Generally speaking, certifiable EMSs are expected to increase corporate legitimacy and improve environmental practices (Boiral and Henri 2012; Testa et al 2014) The certification process contributes to strengthening the ‘‘legitimacy’’ of organizations in the eyes of external stakeholders, to whom environmental practices and performance in this area can appear opaque (Boiral 2007; Delmas 2001; Jiang and Bansal 2003) The acquisition of the ISO 14001 or EMAS certificates tends to signal a reliable and credible environmental commitment by the organization, thus enhancing its reputation (Delmas, 2001; Heras-Saizarbitoria and Boiral 2013; King et al 2005; Potoski and Prakash 2005; Rahman and Post 2012) However, the extent to which external pressure for certification really contributes to the internalization of environmental practices remains uncertain and understudied Based on the empirical literature on the implementation of EMSs (Boiral 2007; Christmann and Taylor 2006; Jiang and Bansal 2003), internalization can be defined as the substantial rather than superficial integration of specific practices and principles proposed by EMSs in organizations’ daily activities This internalization cannot be equated with the adoption of a formal EMS Firstly, the impact of certifiable EMSs on environmental performance is controversial (Barla 2007; Boiral 2007; Darnall et al 2008; Russo 2009) The adoption of EMS, such as the ISO 14001 and EMAS standards, does not necessarily contribute to improving environmental performance and they are often superficially implemented (Boiral and Henri 2012; Castka and Prajogo 2013; Christmann and Taylor 2006; Testa et al 2014; Yin and Schmeidler 2009) Secondly, these standards are often used for marketing purposes rather than to really improve environmental practices (Boiral 2007; Darnall 2006; Jiang and Bansal 2003) As a result, certifiable EMSs could contribute to greenwashing, which has been defined ‘‘as the intersection of two firm behaviors: poor environmental performance and positive communication about environmental performance’’ (Delmas and Cuerel Burbano 2011, p 65) Although some studies have found that positive and negative environmental actions represent distinct constructs (Mattingly and Berman 2006; Post et al 2011), 123 these actions are not necessarily related to the corporate communication on environmental issues, which tends to artificially inflate performance in this area (e.g., Laufer 2003; Bowen and Aragon-Correa 2014; Delmas and Cuerel Burbano 2011; Du 2014; Boiral 2007; Lyon and Montgomery 2015) In this perspective, greenwashing appears as an external projection of a positive image of a firm, which is not reflected in its internal behaviors regarding environmental issues Consequently, stakeholder pressure for the adoption of a certified EMS does not necessarily strengthen environmental practices and performance in this area In certain cases, such pressure could even increase the contradictions between the appearance of corporate greening through certifiable EMSs and the actual practices inside the organization This type of contradiction has been highlighted by Hawthorne (2012) on the frequent disconnection between the image projected by the most admired companies—such as Apple, Starbucks, and American Apparel—and their actual internal practices For example, although Apple is one of the most admired companies, it ‘‘has historically been less environmentally responsible, less worker friendly, and much less open than other tech companies’’ (Hawthorne (2012, p 73) Hawthorne echoes the numerous criticisms of corporate greenwashing and contradictions between talk and action (e.g., Atvesson 1990; Marziliano 1998; Cho et al 2015; Boiral 2013) Generally speaking, greenwashing tends to undermine corporate accountability toward stakeholders and the credibility of environmental initiatives (Laufer 2003; Boiral 2013; Cho et al 2015) Misleading appearances regarding corporate sustainability can also create confusion and loss of confidence, in particular among consumers and the general public who have increased difficulties in identifying truly socially responsible firms (Parguel et al 2011; Chen and Chang 2013a) Finally, the excessive gap between talk and action regarding corporate sustainability is the subject of public criticism in the media and by NGOs such as CorpWatch, which gives out greenwashing awards In this perspective, the prevention of greenwashing through the internalization of EMS and substantial environmental practices represents an important challenge for stakeholders, businesses, and society Although the literature has mostly focused on the determinants of the adoption of certifiable EMSs, their implementation does not necessarily mean that the environmental practices on which they are based have been substantially integrated Yet this integration is key to corporate greening (Bansal and Hunter 2003; Qi et al 2013; Testa et al 2014) Paradoxically, with a few exceptions (Castka and Prajogo 2013; Christmann and Taylor 2006), the external factors explaining the internalization of certifiable EMSs have not been studied in depth in the literature Internalization of Environmental Practices and Institutional Complexity: Can Stakeholders… This study contributes to a better understanding of the institutional complexity underlying the internalization of environmental practices through the adoption of a certifiable EMS This complexity is related to the diversity of external pressures and expectations by various stakeholders Research on institutional complexity has shown that external pressures are based on various and sometimes conflicting institutional logics (Greenwood et al 2011, 2010; Pache and Santos 2010; Smets and Jarzabkowski 2013) Moreover, the responses of organizations to these pressures are not isomorphic and may result in various strategies of adaptation or resistance (Oliver 1991, 1992; Pache and Santos 2013; Scherer et al 2013; WestermannBehaylo et al 2014) Thus, although certifiable EMSs are based on standardized prescriptions, external pressures for their adoption are not monolithic and how they are translated into practice can vary significantly from one certified organization to another In this perspective, the factors driving the substantial internalization of certifiable EMSs need to be further investigated The neo-institutional theory and the resource-based view offer a valuable theoretical framework for shedding more light on how external and internal factors influence the internalization of an EMS into strategic and operational activities (see the conceptual model in Fig 1) In order to contribute to the current debate on the drivers of environmental proactive strategies, this study analyzes the influence of external pressures, coming from various stakeholders, and the role of corporate strategy in the internalization of environmental management practices related to EMAS requirements Drawing on data from 232 EMAS organizations, we tested whether organizations enduring greater institutional pressures experience a higher internalization of EMS requirements The study also analyzes the influence of different stakeholders and the strategies focused on cost saving or product quality on the internalization of EMS requirements The rest of the paper is structured as follows Having reviewed the literature in order to formulate the appropriate set of hypotheses, we describe the context of the study, the data collection process, and illustrate the statistical methods Next, we present the results achieved The last section provides the main conclusions, as well as a discussion of their implications, limitations, and avenues for further research Fig Conceptual model 123 F Testa et al Literature Review and Development of Hypotheses The Heterogeneous Internalization of Environmental Management Systems An increasing number of companies are adopting formal EMSs based on certifiable standards The international recognition and flexibility of these standards, which can be adapted to most types of organizational contexts, partly explain their successful diffusion worldwide (Delmas 2002; Heras-Saizarbitoria and Boiral 2013; Qi et al 2012; Testa and Iraldo 2010) In addition, obtaining the external recognition of compliance with a certifiable EMS, such as ISO 14001 and EMAS, provides a signal of environmental leadership to the market (Raines and Prakash 2005) Considering the list of best practices of environmental leadership provided by Dechant and Altman (1994), the EMS can be seen as a manifestation of integrated environmentalism into a firm’s business planning and operations ISO 14001 and EMAS standards require a combination of management support for environmental initiatives (Sharma 2000; Bansal and Hunter 2003), a clear definition of roles and responsibilities related to environmental issues (de Brio et al 2007), and an allocation of sufficient resources for managing environmental issues (Darnall and Edwards 2006) which allow a company to gain significant environmental improvements EMAS requires more stringent requirements than ISO 14001, particularly with regard to employee involvement, demonstration of full legal compliance, environmental reporting, and dialog with external stakeholders (European Commission 2011; HerasSaizarbitoria et al 2015) According to the mainstream literature, the implementation of this type of proactive environmental initiatives is expected to improve environmental performance (Arago´nCorrea and Rubio-Lopez 2007; Berry and Rondinelli 1998; Sharma and Vredenburg 1998) In addition, the certification process should, in principle, guarantee that the certified organizations comply with the standard requirements (Darnall 2006; Heras-Saizarbitoria et al 2013; Potoski and Prakash 2005) However, as highlighted in Table 1, the empirical literature on the effectiveness of certifiable EMSs provides a mixed picture of their real impact on environmental performance (Barla 2007; Boiral 2007; Darnall et al 2008 Jiang and Bansal 2003) According to many authors, certifiable EMSs actually have a positive impact on different dimensions: environmental performance (Melnyk et al 2003; Nishitani et al 2012; Russo 2009), regulatory compliance (Potoski and Prakash 2005; Prakash and Potoski 2014), and improvement in environmental management practices (Darnall 2006; King et al 2005) Conversely, others studies have found no conclusive evidence of the 123 positive effects of EMSs on environmental performance (Barla 2007; Christmann and Taylor 2006; Jiang and Bansal 2003) and some have even highlighted negative impacts such as the bureaucratization of environmental practices and certification costs (Boiral 2007; Dogui et al 2014) The very few specific studies on the impacts of EMAS on environmental performance have also produced inconclusive results Iraldo et al (2009) highlighted that the EMAS requirements need time to be fully acknowledged and ‘‘metabolized’’ in daily practices, and their effects on the improvement in environmental performance only emerges when the EMS is sufficiently mature Similarly, Testa et al (2014) investigated the impacts of EMAS and ISO 14001 on the reduction in carbonic anhydride emissions on 229 energy intensive plants in Italy According to this study, EMAS requires more significant changes in organizational structure and employee practices than ISO 14001 As a result, EMAS seems to generate visible environmental performance improvements only in the long run, when its prescriptions have been fully integrated into the management dynamics The studies of Iraldo et al (2009) and Testa et al (2014) are in line with previous works on the critical role of the substantial rather than superficial adoption of EMS practices to improve environmental performance (e.g., Boiral 2007; Fryxell et al 2004; Heras-Saizarbitoria et al 2013; Qi et al 2012) For example, Yin and Schmeidler (2009) stressed the heterogeneous environmental outcomes of ISO 14001 They found a positive relationship between the integration of ISO 14001 requirements in daily practices and improvements in the environmental performance of certified facilities in the U.S Qi et al (2012) focused on Chinese ISO 14001 certified companies and found that the level of internalization of ISO 14001 requirements has a positive influence on environmental performance Similarly, the lack of internalization of ISO 14001 is generally considered as one of the main causes of the ineffectiveness of this standard in improving environmental practices and performance (Boiral 2007; Christmann and Taylor 2006; Heras-Saizarbitoria et al 2015; Lannelongue et al 2015) In this perspective, the conflicting findings of the literature on the effectiveness of EMSs could be related to their uncertain internalization In many organizations, certifiable EMSs are merely adopted symbolically to increase external legitimacy, rather than to improve internal practices (Boiral and Henri 2012; Christmann and Taylor 2006) This type of superficial and misleading adoption of certifiable EMS represents one of the many forms of greenwashing, which, as highlighted by Lyon and Montgomery (2015), can be manifested in many different ways, including symbolic management and decoupling between formal structures and Internalization of Environmental Practices and Institutional Complexity: Can Stakeholders… Table Studies on the relation between EMS adoption and environmental performance Authors ISO 14001/EMAS Country Sector Sample Year of analysis Key variables Effect on environmental performance Melnyk et al (2003) ISO 14001 US Manufacturing 1510 1998 Waste indicators Positive Zobel (2013) ISO 14001 Sweden Manufacturing 116 firms 1994–2000 Air/water emission; resource use, waste No effect King et al (2005) ISO 14001 US Manufacturing 7899 facilities 1995–2001 TRI Positive Russo (2009) ISO 14001 US Electronics manufacturing 242 facilities 1996–2001 TRI Positive Barla (2007) ISO 14001 Canada Pulp and paper firms 37 facilities 1997–2003 Quality of water effluents Positive for BOD no effect for other parameters Iraldo et al (2009) EMAS Europe Manufacturing 101 firms 2006 Air/water emission; resource use, waste Positive but under conditions Gomez and Rodriguez (2011) ISO 14001 Spain Manufacturing 126 firms 2001–2007 TRI No effect Nishitani et al (2012) ISO 14001 Japan Manufacturing 500 firms 2002–2008 PRTR EMS maturity Positive Franchetti (2011) ISO 14001 US Manufacturing 121 firms 2008 Solid waste generation Positive Daddi et al (2011) EMAS Italy Manufacturing 64 firms 1998–2008 Water and energy consumption, waste production Unclear Testa et al (2014) EMAS ISO 14001 Italy Energy 229 facilities 2007–2010 CO2 Unclear actual practices This specific form of greenwashing is part of a symbolic corporate environmentalism, embedded in organizational practices and symbolic implementation of recognized standards verified by third-party audits (Boiral 2007; Dogui et al 2014) As a result, it tends to be less visible and more sophisticated than traditional and narrow form of greenwashing based on the deliberate communication of misleading information (Bowen and AragonCorrea 2014) As highlighted by Bowen and Aragon-Correa (2014, p 108): ‘‘A challenging new frontier in research (and practice) is to move beyond limited current conceptions of greenwashing in the academic literature to analyzing symbolic corporate environmentalism.’’ Surprisingly, relatively few studies have investigated the main determinants of this symbolic corporate environmentalism, particularly in the case of the internalization of the EMAS standard Some studies have stressed the role of internal factors such as the support of managers, the resources allocated, or the ability to effectively involve employees (Boiral 2007, 2011; Jiang and Bansal 2003) Other studies have underlined the role of management support, internal resources, and capabilities of managers to improve employee involvement and environmental performance (Dechant and Altman 1994; Chen and Chang 2013) However, most of these internal factors should theoretically already be covered by certifiable EMSs, as proved by the new version of ISO 14001: 2015, which now covers the role of leadership in a specific section This raises the questions of the real compliance of certified organizations and the value of external audits The validity and reliability of environmental audits and certification processes have been criticized in various studies (Boiral 2007; Dogui et al 2014; Heras-Saizarbitoria et al 2013) However, if the unreliability of certain thirdparty audits explains why certain certified organizations have superficially implemented their EMS, even if it was supposed to be compliant with ISO 14001 or EMAS, it does not explain the reasons for the lack of internalization of these standards These reasons could be related to the type of institutional pressures for EMS adoption and the strategy adopted by organizations Institutional Complexity and Corporate Strategy Institutional pressures are generally considered as one of the main motivations behind the adoption of certifiable EMSs (Castka and Prajogo 2013; Heras-Saizarbitoria et al 2011, 2013; Schaefer 2007) Firstly, institutional pressure from government bodies and agencies or from other stakeholders can encourage the adoption of a certifiable EMS to promote a self-regulatory approach (King et al 2005; Potoski and Prakash 2005; Prakash and Potoski 2014) The certification thus seems to prove to the outside 123 F Testa et al world that the organization has voluntarily and credibly committed itself to pursuing continuous environmental improvement, thereby avoiding or reducing stringent regulatory controls by public bodies Secondly, market pressures increasingly encourage organizations to adopt environmental practices and certification standards, particularly in China and India (Christmann and Taylor 2006; Heras-Saizarbitoria et al 2011; Wu 2013) This is basically driven by the impossibility for intermediate clients or end consumers to acquire direct information on (and therefore to have a deep knowledge of) the environmental attributes of a product, a process, or an organization (i.e., a producer) This then leads to an asymmetric distribution of information By obtaining the external recognition of compliance with a standard of excellence such as ISO 14001 and EMAS, an organization tries to solve this market failure, providing a signal to the market regarding the reliability of its environmental commitment (King et al 2012) Drawing on the more general concept of corporate social responsibility, Bear et al (2010) also found that social and environmental virtuous programs are positively related to corporate reputation and are driven by stakeholders Overall, the organizational adaptation to institutional pressure is at the core of the neo-institutional theory, which has been widely used to explain the adoption of certifiable EMSs (Christmann and Taylor 2006; Heras-Saizarbitoria et al 2011, 2013; Yin and Schmeidler 2009) According to this theory, institutional pressures encourage organizations to adopt similar management structures and practices thus becoming isomorphic (Di Maggio and Powell 1983; Greenwood et al 2014) These structures and practices are mostly intended to enhance corporate ‘‘legitimacy’’ in the eyes of various stakeholders, rather than to improve internal practices (Meyer and Rowan 1977) As a result, they can be superficially implemented and not well integrated within the organization Various studies based on the neo-institutional theory have highlighted the symbolic adoption of certifiable EMSs which, in many cases, are used for communication purposes rather than to really improve environmental performance (Boiral 2007; Christmann and Taylor 2006; Yin and Schmeidler 2009) However, it follows that the more external pressures increase, the more organizations attach importance to EMSs and tend therefore to substantially implement environmental practices Although it has apparently not been studied in the case of the EMAS standard, this relationship between external pressures and EMS internalization has been found in a few studies on ISO 14001 For example, in their study on ISOcertified firms in China, Christmann and Taylor (2006) demonstrated that the internalization of the standard and compliance with its requirements essentially depended on customer pressures Guoyou et al (2012), Fryxell et al 123 (2004), and Heras-Saizarbitoria et al (2013) also showed that the intensity of various external pressures such as regulatory compliance and customer expectations increases the internalization and benefits of the standard Based on these observations, we hypothesize that: Hypothesis Organizations that endure greater institutional pressures, experience a higher internalization of EMAS requirements Although the intensity of external pressures is expected to encourage the internalization of the EMS, the nature and implications of these pressures are not monolithic As highlighted by the literature on institutional complexity, organizations tend to experience various pressures from different institutional constituents, which are shaped by specific and sometimes conflicting logics (Greenwood et al 2011, 2010; Pache and Santos 2010; Marano and Kostova 2015; Smets and Jarzabkowski 2013) As a result, institutional pressures are not isomorphic and organizations can internalize new practices and structures very differently depending on their responses to specific demands, stakeholder expectations, and institutional logics, that is to say ‘‘the belief systems and associated practices that predominate in an organizational field’’ (Scott et al 2000, p 170) Competing institutional logics and expectations can shape the adaptation of organizations to external demands in various fields such as the health care system, education, and the financial sector (for an overview, see Greenwood et al 2011) This organizational adaptation is not necessarily passive and may be based on various strategies, including institutional resistance (Greenwood et al 2011; Oliver 1991, 1992; Pache and Santos 2010; Westermann-Behaylo et al 2014) From this perspective, the superficial versus substantial implementation of EMS requirements can appear as two different responses to institutional pressures for certification from stakeholders with diverse expectations and institutional logics As a result, the level of internalization of standards such as ISO 14001 and EMAS does not only depend on the intensity of external pressures, but also on the stakeholders involved and on their specific expectations and needs Firstly, the heterogeneous adoption of certifiable EMSs shows that organizations have wide room for maneuver when adopting standards such as ISO 14001 and EMAS (Boiral 2007; Kitazawa and Sarkis 2000; Yin and Schmeidler 2009) This flexibility facilitates the adaptation to various constraints and institutional logics For example, the organizational culture, attitudes of managers or employee commitment are not covered by specific ISO requirements, which can therefore leave room for a superficial adoption of the standard (Boiral 2007; Jiang and Bansal 2003; Qi et al 2012) Overall, the existence of conflicting institutional logics that challenge the values and objectives of the organization tends to result in various Internalization of Environmental Practices and Institutional Complexity: Can Stakeholders… resistance strategies to external pressures (Oliver 1991; Pache and Santos 2010; Westermann-Behaylo et al 2014) Secondly, stakeholders may play a different role in stimulating the adoption of environmental practices (e.g., Delmas and Toffel 2008, 2004; Henriques and Sadorsky 1999; Sarkis et al 2010) For example, Delmas and Toffel (2008) have shown how the prioritization of different stakeholders, related to market or non-market pressures, has led to the adoption of many diverse environmental practices, including the adoption of ISO 14001 Buysse and Verbeke (2003) found that managers’ perceptions of institutional demands from primary and secondary stakeholders influence the development of an environmental leadership strategy Overall, because stakeholders have different objectives and institutional logics, their influence on environmental practices such as the adoption of EMSs is not necessarily the same (Delmas and Toffel 2004) For instance, the local/regional governments and environmental agencies of certain European countries have implemented various incentives to encourage participation in the EMAS standard and to promote proactive environmental practices: regulatory reliefs, reduction in the administrative burden for organizations, grants, etc (Glachant et al 2002; Heras-Saizarbitoria et al 2015) These incentives not necessarily have the same impact on the internalization of the standard, compared for example to commercial pressures from distant customers who cannot verify the genuine adoption of an EMS Based on these observations, we hypothesize that: Hypothesis Organizations that endure greater pressures from public authorities experience a higher internalization of EMAS requirements Hypothesis Organizations that endure greater pressures from community environmental groups experience a higher internalization of EMAS requirements Capital investors may also have an interest in supporting the environmental commitment of a firm For instance, the implementation of environmental practices can derive from corporate directives that reflect the environmental awareness of shareholders (Henriques and Sadorsky 1999) Considering the benefits associated with good environmental performance such as a better corporate reputation (Russo and Fouts 1997) or increased efficiency (Porter and Van der Linde 1995), the owners can ask for the implementation of specific environmental actions in all their firms and facilities Similarly, the adoption of an EMS can be positively evaluated by banks and financial institutions during their financial risks assessment (Ambec and Lanoie 2008) Several international banks (e.g., Credit Suisse, Unicredit, BNP Paribas) claim that they take into account the environmental profile of applicants when deciding whether or not to grant a loan and around 80 international banks have supported ‘‘Equator Principles’’ i.e., a risk management framework for determining, assessing, and managing environmental and social risk in projects they finance This discussion thus led to the following hypotheses Hypothesis Organizations that endure greater pressures from shareholders experience a higher internalization of EMAS requirements Hypothesis Organizations that endure greater pressures from banks and financial institutions experience a higher internalization of EMAS requirements Industries and trade associations also play an important role in spreading information on the most innovative environmental practices (Delmas and Montes-Sancho 2010) For example, industry associations can help firms to be better informed of the benefits of EMS adoption and to better manage the critical steps of the implementation process (Testa et al 2012) Additionally, pressures can be exerted by community environmental groups which have a strong interest in preserving the local environment and, therefore, scrutinize a company’s behavior, including its management of local pollutant dischargers (Henriques and Sadorsky 1996) This is particularly true in the case of EMAS which, differently from ISO 14001, requires a transparent behavior toward neighborhoods by the disclosure of an environmental report (the Environmental Statement) This leads to formulate the following hypotheses Supply chain actors can also play a pivotal role in pushing a firm toward pro-environmental behavior Customers, above all in a business-to-business market, can require their suppliers to prove the adoption of an efficient EMS in order to reduce the environmental risks in their supply chain (Jiang and Bansal 2003; King et al 2005) For instance, one of the market leaders in the automotive sector such as Renault Nissan requires its suppliers to demonstrate their adoption of an EMS by providing a copy of the ISO 14001 or EMAS certificate Similarly, supply chain relationships can stress the adoption of practices for improving environmental performance along the entire supply chain in order to a gain competitive advantage by signaling environmental concern (Testa and Iraldo 2010) or for ethical issues (e.g., reflecting the values of managers) (Nawrocka 2008) As such, we formulate the following hypotheses Hypothesis Organizations that endure greater pressures from industries and trade associations experience a higher internalization of EMAS requirements Hypothesis Organizations that endure greater pressures from customers experience a higher internalization of EMAS requirements 123 F Testa et al Hypothesis Organizations that endure greater pressures from suppliers experience a higher internalization of EMAS requirements Understanding the drivers of an environmental strategy solely by focusing on external constituents is just seeing one side of the coin Drawing on the natural resource-based view of the firm, various authors have argued that proactive environmental strategies depend on the internal resources and capabilities available (Hart 1995; Sharma and Vredenburg 1998, Christmann 2000) The endowment of tangible and intangible assets such as know-how (Russo and Fouts 1997), corporate culture (Barney 1986), and development or tacit, socially complex or rare capabilities (Hart 1995) determines the ability of corporate strategy to be really effective For instance, Post et al (2014) demonstrated that how a board is made up, for example whether there are women and independent directors, could enhance the likelihood of adopting sustainable actions and, consequently, improve corporate environmental performance The internalization of certifiable EMSs can also be influenced by economic aspects and organizational strategies According to the mainstream literature on environmental management, the adoption of proactive practices in this area tends to improve corporate effectiveness (e.g., Ambec and Lanoie 2008; Hart 1995; Hart and Ahuja 1996; Porter and van der Linde 1995; Sharma and Vredenburg 1998) Environmental actions often result in various economic benefits such as the reduction in material waste, energy saving, and more efficient production processes Most of these internal benefits cannot be obtained through a symbolic adoption of a certifiable EMS and therefore require a substantial integration of environmental practices These positive impacts of proactive environmental practices are reflected in various studies on the economic benefits of certifiable EMSs (Darnall et al 2008; Russo 2009; Bansal and Hunter 2003) Thus, the win–win relationships between corporate greening and economic/competitive objectives can encourage the internalization of environmental practices, insofar as these can be used as tools to reduce costs, introduce innovative practices, and improve corporate effectiveness Likewise, the internalization of certifiable EMSs can improve quality management practices and vice versa The close relationships between pursuing quality and environmental performance have been widely highlighted in the literature (e.g., Berry and Rondinelli 1998; King and Lenox 2001; Roy et al 2001, 2013) These relationships are reflected in the similarities between certification standards such as ISO 14001 and ISO 9001 (Boiral, 2011; Roy et al 2013) Certain benefits associated with quality management practices, such as reducing waste, saving materials, and improving process control, also have positive 123 environmental impacts Finally, the institutional arrangements of certifiable EMSs and quality standards such as ISO 9001 are quite similar: attaining organizational legitimacy through external audits, improvement of corporate image, implementation of a management system based on the Deming cycle, procedures for the internalization of similar practices, etc Overall, the synergies between quality and environmental management encourage a better integration of these inter-connected functions and the development of specific competencies for lean and green management (King and Lenox 2001; Roy et al 2001, 2013) An organizational strategy to improve quality management can thus facilitate the internalization of an EMS such as the one foreseen by the EMAS standard Based on these observations, we hypothesize that: Hypothesis A cost-saving strategy encourages the internalization of EMAS requirements Hypothesis 10 A product quality-parented strategy encourages the internalization of EMAS requirements Methodology Sample Our analysis used primary data from a questionnaire survey conducted among EMAS-registered private companies located in all EU member states The data were collected from September 2012 to March 2013 by an online questionnaire The questionnaire was designed to take into account the potential problems of common method variance that can affect behavioral research Several procedural remedies were adopted As many researchers have highlighted, one possible bias is social desirability (King and Bruner 2000; Tourangeau and Yan 2007) Consequently, the anonymity of respondents was guaranteed by avoiding any request for the name of either the respondent or the organization The letter of invitation specified that the data would only be revealed in an aggregated form and anonymously Since studies have shown that question formulation can alter the results by as much as 50 % (Cannell et al 1989), a pre-test was carried out with five organizations in order to identify poorly phrased questions or those that might lead to biased answers Since the questionnaire concerned the adoption of an EMS and its drivers and benefits, in the pretest five ISO 14001- certified companies (four Italian and one Spanish operating in the waste management, pulp and paper, and construction sectors) were interviewed and the questionnaire was filled in alongside trained researchers who took notes regarding any doubts, misunderstandings, Internalization of Environmental Practices and Institutional Complexity: Can Stakeholders… and remarks ISO 14001 rather than EMAS-registered companies were chosen due to their knowledge regarding the topic of the questionnaire and given that they would not be actually taking part in the survey Based on the pre-tests, the survey was revised accordingly The submission process was as follows: first, we found the email addresses of the environmental managers in all 3936 EMAS adopter organizations from the official EMAS register We uploaded the questionnaire onto a web platform and emailed managers with a link to access the questionnaire and with detailed instructions on how to complete the questionnaire Next, we sent a reminder email every 15–20 days The survey was also supported by the European Commission and other key stakeholders, who published the link to the questionnaire on their websites (see Fig 2) It was decided to submit the questionnaire to the environmental department as it usually has the most relevant information on the specific environmental practices and procedures being carried out in an organization and because it has direct access to documentation concerning environmental issues 243 surveys were returned, corresponding to a response rate of 6.1 % This rate can be interpreted as positive if we consider that it was calculated with reference to the whole statistical population and not to a random sample It is also comparable with other surveys on the same topic (see for instance Yin and Schmeidler 2009) Due to missing information and inadequate responses, a total of 232 questionnaires were utilized (final response rate 5.9 %) Considering the relatively large non-response rate, we analyzed sample selection bias by performing a Heckman sample selection procedure assuming that the control variables explain the respondents’ decision whether or not to answer (see Davidson and McKinnon 2004) Since the coefficient of the inverse Mills ratio is not significant, we can affirm that selectivity might not be a problem (p value = 0.689) Finally, the representativeness of the sample was checked against the general characteristics of the population, such as organization size and geographical distribution We found that the sizes of the organizations tended to be similar, and there were more organizations from Mediterranean countries than from central Europe compared to the population of all the organizations in the EMAS register (Table 2) The low response rate was mainly due to the limited participation from organizations located in two frontrunner countries, Germany and Spain The submission of the questionnaire in English and the execution of a similar survey carried out by the German EMAS competent body in the same period1 could have discouraged German companies from responding The low response rate of Spanish organizations is in line with lower response rates in previous surveys on EMSs in Spanish firms (e.g., del Brı´o et al 2001) Therefore, although a sample selection bias had statistically been avoided, the low response rate should be taken into consideration in the analysis of the results Measures Internalization of EMS Requirements Unlike similar research carried out in the literature, we used a more comprehensive approach to measure the level of internalization of EMS requirements Some authors have focused on specific elements of the EMS structure, such as the involvement of managers and employees or a reference to a generic integration of the requirement in daily routines (Guoyou et al 2012; Yin and Schmeidler 2009), whereas we measured the level of internalization of EMS requirements using 12 questions based on the four pillars of the Deming Cycle Following the approach of research on the adoption of health and safety management systems (Ferna´ndez-Mun˜iz et al 2007, 2009), we identified measurement instruments that reflected previous studies that have investigated a firm’s environmental corporate social Fig Steps of survey’s design That survey is available ta http://www.emas.de/fileadmin/user_ upload/06_service/PDF-Dateien/EMAS_in_Germany_Evaluation_ 2012.pdf 123 F Testa et al Table Survey sample versus all registration holders Organization size Geographical distribution Small (%) Medium (%) Large (%) Southern Europe (%) Western/Central Europe (%) Eastern Europe (%) Northern Europe (%) EMAS population 53 28 19 54 42 2 Sample 50 27 23 68 24 4 responsibility (Clarkson et al 2008; Rahman and Post 2012) We identified four main actions that an organization needs to take to truly implement an effective EMS: • • • • planning, operational activities, training and employee involvement, check and review actions The level of internalization of each tile was measured by three specific items with a 5-point Likert scale indicating the level of implementation of each action (from 1: not implemented; to 5: good implementation of the initiatives and positive evaluation of their effectiveness) For each EMS pillar, a single factor was obtained by merging the corresponding items and Cronbach’s Alpha test was used to check its reliability In order to have a comprehensive measure of EMS internalization, all items were also aggregated into a single factor Table provides details on all 12 items and on the results of the factor analysis knowledge, intangible resources) is necessary to support corporate greening and, consequently, improve organizational effectiveness (Darnall and Edwards 2006; Hart 1995; Sharma and Vredenburg 1998) Overall, the success of corporate strategies requires a combination of specific resources embedded in organizational practices, culture, and relationships with stakeholders (Christmann 2000; Wong et al 2012) These resources can improve both economic performance and the internalization of proactive environmental practices (Aragon-Correa and Sharma 2003; Russo and Fouts 1997; Schaltegger et al 2012) In order to measure the extent to which organizational strategy focuses on cost savings or on quality management, and the influence of this strategy on the internalization of EMS practices, we used the answers to the following question: Which of the following competitive factors you use to enhance your most important product on the market? Respondents replied using a three-point scale, indicating whether firm strategy focused on cost savings or quality management was ‘‘not important,’’ ‘‘moderately important,’’ or ‘‘very important.’’ Stakeholder Pressures Control Variables As mentioned above, a large body of literature has investigated the effect of stakeholders on a firm’s environmental commitment Based on this previous research, we focused on the following stakeholders: public authorities (Gusmerotti et al 2012; Heras-Saizarbitoria et al 2015); industry and trade associations (Testa et al 2012); customers (King et al 2005; Christmann and Taylor 2006); suppliers (Testa and Iraldo 2010); shareholders (Henriques and Sadorsky 1999); banks and financial institutions (Ambec and Lanoie 2008); and community environmental groups (Henriques and Sadorsky 1996) Following Darnall et al (2010), we asked to managers to indicate the level of importance of each stakeholder on organization’s decision to adopt environmental actions Managers replied using a 3-point Likert scale: ‘‘not important,’’ ‘‘moderately important,’’ or ‘‘very important.’’ Organizational Strategies According to the resource-based view of the firm, the development of complex capabilities (know-how, tacit 123 In order to capture the influence of other factors on the level of internalization of EMS requirements, we constructed a set of control variables Size: A small organization often suffers from a lack of human and financial resources, which limits its ability to internalize some of the specific requirements of EMSs (Darnall et al 2010) We thus controlled for an organization’s size in terms of the number of employees Market Scope: The geographical dimension of the competitive arena can also affect how and the extent to which environmental practices are adopted (Nakamura et al 2001) We thus included categorical variables to control the spatial scope of the market in which an organization competes, assigning if the organization’s market was at a local level, national, European, and global Economic Performance: Since the integration of EMS requirements in daily routines involves costs in term of human and financial resources, it may be influenced by the economic position of a company In order to control for the degree of market success, following Darnall et al (2008), Internalization of Environmental Practices and Institutional Complexity: Can Stakeholders… Table Level of internalization of EMS requirement EMS Pillar Item Factor loading comprehensive factor Factor loading EMS pillar factor Planning The environmental policy was disseminated effectively to all employees 0.799 0.871 Based on the policy, management established measurable objectives and targets related to the environment There are actions aimed at gathering opinions and suggestions from employees regarding the environment 0.806 0.901 0.618 0.803 Cronbach’s alpha planning factor 0.797 Training and employee involvement Employees are offered incentives to implement the principles and procedures related to environmental protection 0.579 0.676 Project teams from different company departments are in charge of solving specific environmental issues 0.584 0.829 There is a formalized system to detect any training needs in the environmental field 0.643 0.806 Cronbach’s alpha planning factor 0.652 Operational activities There are specific operating instructions for the management of environmental issues (e.g., management of a temporary waste site, emissions into the atmosphere) 0.832 0.896 The company has identified one or more procedures to detect and deal with potential emergency situations Emergency response procedures are periodically re-examined and updated when necessary, especially after scheduled checks or after emergency situations 0.779 0.910 0.806 0.882 Cronbach’s alpha operations factor 0.877 Monitoring and checking There are formal systems to measure performance in order to detect to what extent targets have been reached 0.815 0.889 The organization has implemented actions to register and investigate non-compliance and preventive actions 0.839 0.939 Internal verifications (audits) are scheduled, aimed at verifying the correct implementation of instructions/procedures and the compliance with applicable legal requirements related to the environment 0.816 0.921 Cronbach’s alpha monitoring factor Cronbach’s alpha comprehensive factor 0.902 0.883 Extraction method was principal component analysis we asked environmental managers to evaluate the economic performance of their organization over the last three years, by using a 5-point Likert scale (from 1: revenue was ‘‘so low as to produce large losses’’ to 5: revenue was ‘‘well in excess of costs’’) Sector: In order to take into account the external context and its potential effect on firm decision-making, we also considered the operations sector (Testa et al 2014) by including a dummy variable if the company operated in the manufacturing sector Table provides descriptive statistics on the variables Empirics We used ordinary least squares (OLS) regression with robust standard errors to evaluate the determinants of the internalization of EMS requirements The first model contains only the control variables (a categorical variable to control for economic performance, a dummy variable for the manufacturing sector and organization size) The second model includes variables for institutional pressures and the control variables The third model incorporates variables for both institutional pressures and competitive strategies and the control variables Then, we performed four further models in order to check the effects of our explanatory variables on the different pillars of EMS implementation In these models, the dependent variable is the level of implementation of: planning activities (Model 4), operational activities (Model 5), actions for training and employee involvement (Model 6), check and review actions (Model 7) In order to verify the robustness of our results, for all models, we checked the normality of residuals This is 123 F Testa et al required for valid hypothesis testing and is achieved by plotting the non-parametric Kernel density estimator (Fan and Gencay 1995), which reveals the symmetry of residual distribution We then checked the collinearity by computing the tolerance and variance inflationary factors (VIFs) for all variables Low variance inflation factors (\2.0) and a VIF less than revealed that multicollinearity was not present (O’Brien 2007) Finally, we performed Harman’s one-factor test to check for the presence of common method variance This method entails entering all the variables into an exploratory factor analysis If only a single factor emerges or it accounts for the majority of covariance, it indicates that a substantial amount of common method variance is present (Steensma et al 2005) The results showed at least five distinct factors with an eigenvalue greater than 1.0 and the largest factor accounted for approximately 18 % of the variance Results Table shows the robust regression results regarding the internalization of EMS requirements Model includes control variables alone, Model adds institutional pressures, and Model shows the complete model including strategic motivations These three models support Hypothesis 1, suggesting that, for most stakeholders, the coefficient is positive and statistically significant Focusing on the stakeholder category, the models offer interesting and surprising findings In contrast with previous studies (Henriques and Sadorsky 1996; Glachant et al 2002; Heras-Saizarbitoria et al 2015), public authorities and community environmental groups not exert sufficient pressure to push managers to increase efforts in integrating EMS in strategic and operational activities Thus, Hypothesis and were not supported Suppliers, shareholders, banks, and other financial institutions, exert a positive influence on EMAS adopters leading them to fully integrate the requirements in firms’ routines and habits (coefficients vary from 0.16 to 0.23) Hypothesis 5, 6, and were, therefore, supported by our model Pressures from customers and industrial associations have, surprisingly, no effect on the decision of an organization to fully implement EMS requirements Both coefficients (-0.26 and -0.16) are negative and statistically significant, respectively at and 10 % These findings inversely support Hypothesis and 8, which states that these stakeholders have a positive effect on the decision of an organization to internalize EMS requirements This means that the pressures from customers and industrial associations are satisfied by the adoption of the official 123 recognition of registration alone, thus generating superficial behaviors by organizations Regarding the effect of strategic motivations on the full implementation of EMS, our findings support Hypothesis but not 10 The estimated coefficient of the cost savings strategy variable is not significant, while the coefficient of the variable measuring the adoption of a product qualityoriented strategy is positive and statistically significant Focusing on control variables, the empirical model confirms that a full implementation of EMAS requires efforts that a positive economic position of a company can facilitate to sustain (Table summarizes the results compared to the study’s hypotheses) Models 4, 5, 6, and include the control and explanatory variables to assess their effects on the implementation of the various EMAS pillars Although the results highlight the reliability of the previous considerations on the factors influencing EMAS internalization, they reveal further interesting information (see Table 7) Pressures from suppliers and shareholders have a stronger influence on the implementation of training, operational, and monitoring actions, while they not encourage the full adoption of planning activities Pressure from banks and financial institutions has a positive influence on all EMAS pillars Pressure from customers has a negative influence on all pillars except on training, where the estimated coefficient is not significant Similarly, pressures from industrial associations negatively influence all pillars, although some coefficients are weakly significant Unlike the combined model, Model shows that the estimated coefficient of pressure from public authorities is positive and significant at 95 % The influence of public authorities on operational activities mainly derives from inspection activities carried out by the competent authorities as well as from references to EMS in the requirements included in an environmental permit Discussion and Conclusions The main objective of this paper was to analyze the influence of institutional pressures and corporate strategy in the internalization of environmental management practices related to EMAS requirements The findings show that, overall, pressures from stakeholders positively influence the internalization of proactive environmental practices, such as employee training, measurement of environmental performances, and internal audits Since these practices are generally associated with an improvement in environmental performance (Arago´n-Correa and Rubio-Lopez 2007; Berry and Rondinelli 1998; Buysse and Verbeke 2003; Henriques and Sadorsky 1996), external 0.16 ** 0.10 0.0124 0.23*** -2.09 -5.52 0.99 236 Number of employees (logarithm) Market scope (local, national, European, international) Manufacturing sector Economic performance Mean Standard Deviation Min Max N 243 0.83 2.04 -0.09 -0.25*** -0.16** -0.11* -0.18*** 0.02 0.27*** 0.26*** 0.20*** 0.22*** 0.25*** 0.13** – (2) *, **, And *** indicate the significance at 10, 5, and %, respectively 0.01 0.08 Influence of community groups on environmental practices 0.14 ** 0.06 Influence of industrial associations on environmental practices Quality as a competitive factor 0.12* Influence of banks and other of financial institutions on environmental practices Price as a competitive factor 0.0722 0.14** Influence of customers on environmental practices Influence of shareholders on environmental practices -0.03 Influence of public authorities on environmental practices Influence of suppliers on environmental practices – 0.03 Level of internalization (1) Table Correlation matrix and descriptive statistics 243 0.84 1.71 -0.09 -0.07 0.03 -0.22*** 0.07 0.03 0.39*** 0.17*** 0.22*** 0.27*** 0.39*** – (3) 243 0.68 1.47 -0.10* -0.06 -0.03 0.04 0.05 0.02 0.21*** 0.42*** 0.31*** 0.25*** – (4) 243 0.83 1.60 0.01 -0.08 0.12* 0.07 0.03 0.02 0.35*** 0.25*** 0.41*** – (5) 243 0.63 1.35 0.03 -0.01 0.07 0.10* 0.05 0.14** 0.36*** 0.32*** – (6) 243 0.70 1.51 0.01 -0.01 0.01 0.03 0.05 0.05 0.40*** – (7) 243 0.79 1.68 -0.05 -0.07 -0.02 0.04 -0.04 0.03 – (8) 242 0.59 2.58 -0.03 0.03 0.08 0.07 0.08 – (9) 242 0.63 2.77 -0.01 0.17*** 0.17*** 0.23*** – (10) 243 11.4 1.93 4.33 0.10 0.18*** 0.49*** – (11) 243 1.11 2.52 0.10 0.42*** – (12) 243 0.49 0.45 0.06 – (13) 240 1.03 3.57 – (14) Internalization of Environmental Practices and Institutional Complexity: Can Stakeholders… 123 F Testa et al Table Predicting internalization of EMS requirements Independent variables Internalization of EMS requirements Model Coefficient Model Standard Error Influence of public authorities on environmental practices Coefficient 0.075 Influence of customers on environmental practices -0.246*** Model Standard Error 0.086 0.096 Coefficient 0.114 -0.261*** Standard Error 0.091 0.097 Influence of suppliers on environmental practices 0.233** 0.128 0.212** 0.127 Influence of shareholders on environmental practices 0.166** 0.074 0.158** 0.0743 Influence of banks and other of financial institutions on environmental practices 0.205** 0.089 0.201** 0.088 Influence of industrial associations on environmental practices -0.139* 0.109 -0.163* 0.104 Influence of community groups on environmental practices -0.037 0.107 -0.012 0.096 -0.075 0.105 Price as a competitive factor Quality as a competitive factor Number of employees (logarithm) Market scope (local, national, European, international) 0.323 0.058 0.038 0.076 Manufacturing sector -0.078 0.146 Economic performance 0.153** 0.060 0.287 Constant -0.796*** F test ** R2 0.0409 0.066* 0.012 -0.020 0.037 0.070 0.150 0.159*** 0.054 -1.228*** 0.342 *** 0.1226 0.349** 0.197 0.053* 0.005 0.037 0.068 -0.058 0.151 0.166*** 0.054 -1.945*** 0.621 *** 0.1531 Number of observations: 232 Heteroskedasticity-robust standard errors are shown *, **, And *** indicate the significance at 10, 5, and %, respectively Table Summary of the study’s results Hypothesis Organizations that endure greater institutional pressures, experience a higher internalization of EMAS requirements Supported Hypothesis Organizations that endure greater pressures from public authorities experience a higher internalization of EMAS requirements Not supported Hypothesis Organizations that endure greater pressures from industries and trade association experience a higher internalization of EMAS requirements Organizations that endure greater pressures from community environmental groups experience a higher internalization of EMAS requirements Inversely supported Hypothesis Not supported Hypothesis Organizations that endure greater pressures from shareholders experience a higher internalization of EMAS requirements Supported Hypothesis Organizations that endure greater pressures from banks and financial institutions experience a higher internalization of EMAS requirements Organizations that endure greater pressures from customers experience a higher internalization of EMAS requirements Supported Hypothesis Inversely supported Hypothesis Organizations that endure greater pressures from suppliers experience a higher internalization of EMAS requirements Hypothesis A cost-saving strategy encourages the internalization of EMAS requirements Not supported Hypothesis 10 A product quality-parented strategy encourages the internalization of EMAS requirements Supported pressures would appear to have a positive influence on corporate greening However, the study also showed that the various stakeholders behind these pressures can play very different 123 Supported roles Shareholders, suppliers, banks, and other financial institutions have a positive influence on the internalization of the EMAS requirements Conversely, customers and industrial associations have a negative impact on EMAS Internalization of Environmental Practices and Institutional Complexity: Can Stakeholders… Table Predicting internalization of different pillars of EMS requirements Influence of public authorities Model internalization of requirements on planning Model internalization of requirements on training and employee involvement Model internalization of requirements on operational activities Model internalization of requirements on monitoring and checking Coefficient Coefficient Coefficient Coefficient Standard error Standard error Standard error Standard error 0.043 0.088 -0.024 0.082 0.208** 0.092 0.084 0.095 Influence of customers -0.231** 0.099 -0.005 0.080 -0.293*** 0.104 -0.197** 0.101 Influence of suppliers 0.090 0.130 0.224** 0.108 0.189** 0.128 0.176** 0.119 Influence of shareholders 0.037 0.078 0.159** 0.081 0.180*** 0.082 0.137** 0.071 Influence of banks 0.194** 0.103 0.168** 0.109 0.118** 0.104 0.194** 0.084 Influence of industrial associations Influence of community groups Price as a competitive factor Quality as a competitive factor Number of employees (logarithm) Market scope (local, national, European, international) Manufacturing sector -0.052* 0.083 0.108 0.101 -0.110* -0.039 0.105 0.099 -0.078* -0.046 0.105 0.104 -0.241** -0.043 0.104 0.095 -.144* 0.111 -0.068 0.104 -0.022 0.105 -0.022 0.107 0.193 0.330*** 0.141 0.228** 0.102 0.274** 0.101 -0.004 0.417** 0.043 0.102*** 0.039 0.041 0.038 0.060* 0.035 0.028 0.078 0.038 0.074 -0.031 0.065 -0.001 -0.087 0.162 0.288** 0.144 0.091 0.147 0.117*** 0.058 0.170*** 0.058 0.160*** 0.059 Constant -1.449*** 0.678 -2.283*** 0.535 F test *** Economic performance R2 -0.056 *** 0.1060 -1.74*** *** 0.2039 0.1409 0.605 0.068 0.156 0.115*** 0.053 -1.469*** 0.630 *** 0.1130 Number of observations: 232 Heteroskedasticity-robust standard errors are shown *, **, And *** indicate the significance at 10, 5, and %, respectively internalization Drawing on neo-institutional and institutional complexity theories (Westermann-Behaylo et al 2014; Greenwood et al 2011; Pache and Santos 2010; Boiral 2007; Yin and Schmeidler 2009), these differences in the impacts of external pressures on EMAS internalization can be explained by the specific practices and belief systems associated with various stakeholders The expectations, values and goals of stakeholders with regard to the adoption of certifiable EMSs can be very different As a result, various measures can be implemented by organizations to improve their legitimacy, including in terms of EMS internalization or greenwashing Moreover, the stakeholder knowledge of corporate commitment to the environment and EMS internalization is variable Few studies have shown that the visibility or opacity of corporate environmental issues significantly influence the implementation and effectiveness of ISO 14001 (Bansal and Bogner 2002; Potoski and Prakash 2013) In this perspective, the more environmental practices are visible and in line with the values and expectations of a specific stakeholder, the more it tends to positively influence the internalization of certifiable EMSs such as the EMAS standard The positive impact of shareholder pressures can be explained by their ability to access relevant information on corporate environmental commitment and performance in this area In addition, shareholders may encourage managers to demonstrate their accountability in terms of sustainability through the internalization of certifiable EMSs, which are expected to improve economic performance and enhance corporate image (Bansal and Hunter 2003; Darnall et al 2008; Russo 2009) The same applies to financial institutions, which attach increasing importance to the control of environmental risks and improvement of environmental performance (Ambec and Lanoie 2008) The positive impact of suppliers can be explained by the increasing interdependence between the greening of supply chain management and the internalization of EMS (Nawrocka 2008; Testa and Iraldo 2010) For example, suppliers can facilitate the use of greener raw materials and facilitate the achievement of EMAS objectives related to resources consumption 123 F Testa et al Although the negative influence of customer pressures seems to contradict several studies on their role in the implementation of EMS (Christmann and Taylor 2006; Fryxell et al 2004; Guoyou et al 2012), it can be explained by their lack of information on real environmental practices and the commercial use of the EMAS standard Given the globalization of economies, today’s market pressures come from increasingly distant customers, who tend to perceive certifiable EMS as a sort of ‘‘commercial certificate’’ rather than a tool to improve environmental practices These customers are not able to verify the internalization of EMS in a direct way (e.g., through inspections or audits), so they tend to trust and rely on the existence of certificates such as EMAS and ISO 14001, more than being interested in how they are applied Finally, the negative role of pressures from industrial associations was unexpected and may be due to their lack of involvement in the implementation of the EMAS standard Moreover, the values of these associations are not necessarily in line with those of corporate greening and some associations can even lobby to limit or counteract environmental pressures (Van Halderen et al 2014; Gray and Milne 2002) These findings show that institutional pressures are not monolithic and need to be analyzed in relation to the different stakeholders involved The study also shows the role of generic corporate strategy on the integration of a certifiable EMS As expected, a product quality strategy encourages the internalization of EMAS requirements This finding is in line with the literature on the interconnection between environmental and quality management (Berry and Rondinelli 1998; King and Lenox 2001; Roy et al 2001, 2013) However, a cost-saving strategy has no significant impact on this internalization This negative role can be explained by the perception of managers concerning the relationships between environmental initiatives and economic performance Contrary to the mainstream literature on environmental management (Darnall and Edwards 2006; Darnall et al 2008; Hart 1995; Sharma and Vredenburg 1998; Russo 2009), many managers are not convinced by this optimistic relationship The difficult economic situation of many European regions at the time of the study may have strengthened the perception that the internalization of EMS is not a priority and could even represent a threat to cost-reduction efforts Contributions to the Literature The study contributes to the literature in several ways Firstly, the study contributes to the literature in terms of the neo-institutional approaches of environmental management (Boiral 2007; Christmann and Taylor 2006; Heras-Saizarbitoria et al 2011, 2013; Yin and Schmeidler 2009) by shedding further light on the complexity and 123 diversity of the external pressures to adopt and internalize certifiable EMSs These different implications suggest that institutional pressures are not isomorphic but follow different logics which companies need to adapt in different ways Depending on the stakeholders involved, this adaptation encourages a substantial or a symbolic implementation of environmental practices To our knowledge, institutional complexity theory has not been used to explain the heterogeneous internalization of certifiable EMSs The use of this theory helps bridge the gap between the neo-institutional approach of EMS, which is based on the substantial vs ceremonial adaptation to external pressures to increase corporate legitimacy, and the stakeholder theory, which is focused on the management of relationships with different stakeholders (Buysse and Verbeke 2003; Delmas 2001; Henriques and Sadorsky 1999) Although the study does not provide specific information on the nature of these relationships, it shows that the level of internalization of environmental practices depends on the influence of the specific stakeholders Secondly, the study contributes to the literature on greenwashing and to the call of Bowen and Aragon-Correa (2014) for more research on symbolic corporate environmentalism and greenwashing This symbolic environmentalism is reflected in the superficial adoption of certifiable EMS Paradoxically, the main objective of the certification process is to increase the credibility of EMSs and strengthen their substantial implementation (Darnall 2006; Prakash and Potoski 2014; Potoski and Prakash 2005) According to the critical literature on external auditing, certification practices not necessarily guarantee the compliance of organizations with certifiable standards and the internalization of the EMS in daily activities (Boiral 2007; Dogui et al 2014; Heras-Saizarbitoria et al 2013) The heterogeneous adoption of the EMAS standard observed in our study confirms that the certification process is not sufficient in itself to guarantee the substantial implementation of environmental management practices, and may even be used as a tool for greenwashing This greenwashing depends on the gap between the green and rigorous image conveyed by EMSs such as EMAS, and the lack of real internalization of environmental practices within certain organizations In addition, this gap can vary considerably despite the monolithic and isomorphic appearance of EMAS-related practices Thirdly, the study contributes to the literature on the economic impacts of environmental practices The absence of significant relationships between the pursuit of costsaving strategies and EMS internalization tends to question the dominant win–win view of the environmental-economic relationships (Ambec and Lanoie 2008; Darnall et al 2008; Roy et al 2001; Russo 2009) The findings of our study suggest that the environmental practices Internalization of Environmental Practices and Institutional Complexity: Can Stakeholders… proposed by the EMAS standard tend to be perceived as a source of costs rather than economies As a result, costsaving efforts not encourage a substantial internalization of this standard This finding gives credence to the more critical approaches on the economic impacts of environmental practices (e.g., Darnall and Edwards 2006; Drake et al 2004) The positive links between strategies for product quality and EMAS internalization suggest that this standard is better suited to organizations focused on quality management practices The resources and capabilities underlying quality management practices and their relationships with the competences associated with environmental management (Berry and Rondinelli 1998; King and Lenox 2001; Roy et al 2001, 2013) could explain this positive relationship Managerial Implications and Avenues for Future Research The results have managerial implications for both managers and policy makers Many managers tend to use certifiable EMSs as a marketing tool rather than a set of practices to improve environmental performance, while the environmental benefits of EMS largely depend on their internalization in daily activities Our findings highlight that this internalization needs to be strengthened in many organizations In addition, since the pressures from suppliers, shareholders, banks, and other financial institutions can contribute to the substantial adoption of the EMAS standard, the role of these stakeholders could be strengthened Managers should be more aware that certain stakeholders are more sensitive than others toward a substantial implementation of an EMS The strong managerial implication of this awareness is that in order to obtain the best results, the ‘‘contact’’ strategies and the engagement with the various stakeholders can be differentiated Shareholders and banks/financial institutions, for example, should be considered as primary ‘‘interlocutors’’ of the EMS: an exhaustive and continuous flow of information should be provided to reassure them regarding the real and concrete applications of the standard Suppliers should be targeted with co-operative strategies and should be directly involved in the EMS implementation, since this is one of their main (implicit or explicit) expectations Customers should be informed and be ‘‘educated’’ on the importance of a non-formal application of an EMS Managers should aim to increase the awareness of customers regarding the guarantees that e.g., ISO or EMAS can provide that their requirements, and the associated environmental management practices, are applied appropriately and effectively in the daily activities On the other hand, the various stakeholders should be incentivized to develop expectations and make more explicit requests concerning the substantial implementation of an EMS For example, decision-makers from the banking system, concerned about their clients’ reduction of environmental risks, could put more pressure on the substantial adoption of certifiable EMS The same applies to shareholders who should encourage the environmental accountability of managers through the adoption of EMSs Policy makers should also encourage the internalization of environmental practices Although governmental agencies play an important part in the dissemination of the EMAS standard in Europe (Glachant et al 2002; HerasSaizarbitoria et al 2015), they not necessarily consider how this type of standard is implemented within organizations This could explain why our results show that the internalization of EMAS requirements not depend on greater pressures from public authorities In this perspective, governmental aid and subsidies should not only be based on the acquisition of the EMAS or ISO 14001 certificates, but also take into account their results and be conditional on the demonstration of their effective internalization This also applies to the certification process of the EMAS standard, which should be focused on the outcomes of the standard rather than its procedural conformity Such focus could be encouraged in the next revision of the EMAS standard by the European Commission Overall, the strictness of the certification process and the training of external auditors could be strengthened in order to encourage the development of more substantial environmental practices and verify the improvement in environmental performance Similarly, industrial associations should be more involved in the substantial and effective adoption of EMAS, providing their member-companies with incentives to empower the real internalization of the key requirements Further research is needed to better understand the drivers and barriers to EMS internalization The limitations of this study can help to identify directions that future research of this topic could take First, while not covered by our study, the values, personal attitudes, and sociodemographic characteristics of managers can play a key role in the internalization of environmental practices (Bansal 2003; Boiral 2007, 2011; Jiang and Bansal 2003) For example, as highlighted by Post et al (2014), the composition of the board, in particular the representation of women, can influence sustainability commitment Future research could investigate how the external pressures from stakeholders can be interpreted and translated into action by managers according to their personal values, ethics, sex, and contextual factors In addition, following Chen and Chang’s approach regarding the determinants of green product development performance (2013b), leadership could be investigated in terms of how it might foster the internalization of EMS 123 F Testa et al More generally, the specific nature of these pressures could also be studied Because of its quantitative approach, the present study has mostly focused on the measurement of pressures from various stakeholders The reasons behind these pressures and their practical manifestation could be detailed in order to analyze why certain stakeholders exert more influence than others on the internalization process To further investigate the role of external pressures on environmental practices, qualitative interviews among managers and representatives of the main stakeholders could be used Such interviews could also shed further light on the institutional complexity underlying the adoption of environmental practices and how the sometimes conflicting demands from multiple stakeholders embedded in different institutional logics are managed, in practical 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Business Strategy and the Environment, 18, 469–486 Zobel, T (2013) ISO 14001 certification in manufacturing firms: A tool for those in need or an indication of greenness? Journal of Cleaner Production, 43, 37–44 123 ... an environmental permit Discussion and Conclusions The main objective of this paper was to analyze the influence of institutional pressures and corporate strategy in the internalization of environmental. .. Internalization of Environmental Practices and Institutional Complexity: Can Stakeholders… Table Predicting internalization of different pillars of EMS requirements Influence of public authorities Model internalization. .. (Ambec and Lanoie 2008; Darnall et al 2008; Roy et al 2001; Russo 2009) The findings of our study suggest that the environmental practices Internalization of Environmental Practices and Institutional