Environmental Management Practices and Sustainable Business Performance: The Moderating Role of Institutional Ownership

Abstract

This study considers the impact of environmental management practices on sustainable business performance and how the interaction of institutional ownership affects this relationship. The study covers ten years span and the data period ranges from 2013 to 2022. The non-financial firms of the FTSE 100-index listed on London stock exchange (LSE) are considered for this research as UK is the leading economy in adoption of environmental initiative. This research used the literature recommended regression methodologies and techniques to test the hypothesis of this study. The empirical estimation reveals that the environmental management practices (EMPs) play a significant role in sustainable business performance impacting and this relationship is further strengthened by moderating role of Institutional ownership. Results of this study show that environmental management practices are associated with both the financial and non-financial business performance measures. Therefore, the adoption of these activities provides competitive advantage and more stakeholder engagement by addressing the social and environmental concerns along with financial goals. The firms of developed economy of UK are considered in this research to establish the impact of environmental management practices (EMPs) on sustainable business performance. This will extend the business strategy and sustainability literature by establishing the importance of these practices in financial, social and environmental performance that gives a more holistic view regarding the significance of these practices.

Key words: Environmental management practices, sustainable business performance, institutional ownership