Motivations for Proactive Environmental Management

This paper examines the extent to which there are differential incentives that motivate the adoption of environmental management practices (EMPs) and pollution prevention (P2) methods. We analyze the role of internal drivers such as managerial attitudes towards the environment and external pressures using both observed characteristics of facilities and perceived pressures. We estimate a structural equation model using survey data from facilities in Oregon that involves simultaneous estimation of the latent dependent and explanatory variables and the two regression equations explaining adoption behavior of EMPs and P2. We find that perceived regulatory pressures and managerial attitudes have a statistically significant impact on the adoption of both EMPs and P2 practices, while market pressures were significant in influencing the adoption of EMPs but not P2 methods. Furthermore; we find that both external regulatory pressures and internal managerial attitudes had a larger impact in motivating adoption by facilities that did not view environmental issues as being a significant concern as compared to facilities that did.