Environmental responsibility and performance in small and medium-sized enterprises An institutional framework on the drivers and performance benefits of environmental management system adoption for SMEs

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In the last few decades, an increasingly growing awareness of environmental issues has emerged. Although SMEs contribute heavily to this problem, these organizations do not recognize the problem as theirs and are less likely to engage in environmental management. In addition, SMEs don’t recognize the potential benefits that environmental management could entail. Although researchers adopted various theoretical perspectives to explore SMEs and their environmental behaviour, the subject is less researched from an institutional perspective. This research therefore takes an institutional view to examine the drivers and potential benefits of environmental management systems in SMEs. The effects of various institutional and external support drivers on the adoption of environmental management systems are examined, as well as the profitability of such systems for SMEs. Data of more than 13.000 SMEs from Europe, Israel and the United States is used. The results of the binary logistic regression and ordinal logistic regression analyses show that SMEs are only influenced by regulative pressures to adopt an EMS. At the same time, cognitive pressures moderate the relationship between EMS adoption and performance: EMS adoption only benefits performance when SMEs perceive cognitive pressures. This therefore hides an interesting opportunity for SMEs in practice.
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