Research pick: Green performance and education - "Organisational resources as facilitators and inhibitors of green performance: non-linearities, interactions and international differences"

A surprising discovery about a company’s green credentials and performance is published in the European Journal of International Management. An international team from Japan, Sri Lanka, and Thailand has found that the educational level of female company directors correlates with positive environmental activity in that company in companies with their headquarters in Asia but not those based in Western nations. The findings could have implications for the greening of many industries across the globe.

Gayani M. Ranasinghe of the Department of Industrial Management at Wayamba University of Sri Lanka, in Kuliyapitiya, Yuosre F. Badir of the Asian Institute of Technology in Pathum Thani, Thailand, and Björn Frank of Waseda University, in Tokyo, Japan, point out that companies are under increasing pressure to improve their green credentials. This pressure is not simply for the purposes of marketing, strategic performance, and profits, of course, but because our environment is under incredible stress from pollution, waste, and climate change. So-called “green” practices and performance are high on the agenda, the term umbrella term “green” alluding whimsically to plant life as a proxy for a healthy planet.

In addition to the discovery that superior green performance among Asian companies correlated with having well-educated female directors, the team also found that financial “slack” and the intensity of research & development (R&D) exert a non-linear effect on a company’s green performance. The new work solidifies diffuse findings from the research literature regarding the various financial and non-financial factors that affect a company’s green performance, the team suggests. The findings were based on the green revenue scores recorded in the international publication Newsweek’s green rankings survey. Additionally, the team applied cross-classified hierarchical linear modelling of multi-source data from 156 companies included in that survey.

Ultimately, the team suggests, having more female directors and better-educated directors on the company board can help a firm to achieve “a superior green performance by altering its environment-related decision outcomes”.

“We stress the importance of having a strategic configuration of organisational resources that supports the firm in developing a unique set of human, relational and technical capital and of other capabilities that drives green performance as a key basis of competition in today’s corporate world,” the team concludes.

Ranasinghe, G.M., Badir, Y.F. and Frank, B. (2022) ‘Organisational resources as facilitators and inhibitors of green performance: non-linearities, interactions and international differences’, European J. International Management.