Impact Of Environmental Management Practices On Firm Performance ——Evidence From The Chinese Electricity Production Sector

This study investigates the influence of environmental performance over financial performance for firms from the Chinese electricity production sector between 2014 and 2018.A content analysis of corporate social responsibility reports is conducted following an indigenous and comprehensive methodology to build the variables.environmental performance is measured by the implementation level of 42 environmental management practices,while net profit rate and return on asset are used as proxies for financial performance.Then,an evaluation of the most impactful green practices on firm performance is conducted by performing a canonical correlation analysis.This study shows that environmental performance is low in this industrial sector.Operational and strategic practices have a larger influence on firm performance than tactical practices.Porter’s theory is partially validated,as the implementation of three environmental management practices demonstrate win-win scenarios:policies and operational practices related to the use of clean energy,and long-term environmental vision.At the same time,firms that do not implement strict operational measures to reduce their water and gas emissions are associated with a higher financial performance.Policies included into the 13th five-year plan aimed at integrating renewable energies into production processes,and they have been transposed into measures at the firm level.