Assessment of Proactive Environmental Initiatives: Evaluation of Efficiency Based on Interval-Scale Data

In recent years, firms have pursued a host of environmental operational practices to derive superior environmental and business performance. However, the relative effectiveness of these practices has not been explored adequately. Past empirical studies have mainly assessed the performance impact of various practices across firms without accounting for firm-specific considerations. Consequently, it is not clear how the costs and benefits of various practices compare across firms that may weigh the practices differently. We examine this issue by analyzing the financial and environmental performance impact of five commonly adopted operational practices of 30 firms across a diverse set of industries. The operational practices are measured in interval scale through content analysis. Subsequently, we apply a data envelopment analysis-based technique proposed by Dehnokhalaji et al . [22] that can incorporate both ratio and interval-scale data. We find that although the emphases on various environmental practices vary among firms, mainly two of the five practices (i.e., proactive waste reduction and remanufacturing) differentiate firms´ business and environmental performance. The theoretical and managerial implications of the findings are also discussed.