A framework for the practice of corporate environmental responsibility in China

Abstract

The achievement of the environmental sustainable development goals (SDGs) mainly lies with national governments, who play a crucial role in internalising environmental externalities within their countries. As a supplement to governmental intervention, corporate environmental responsibility (CER) practice will help correct environmental externalities and, thus, contribute to the implementation of national environmental plans. Therefore, a framework is needed that shows the drivers for a firm to pursue CER practice, while also demonstrating the organisational journey a firm needs to take towards environmental sustainability. However, most existing CER frameworks are based on free market mechanisms; therefore, they are not fully applicable in mixed economies due to the different institutional contexts. This paper contributes to the CER literature by providing a general framework for CER research applicable to both free-market and mixed economies, using multiple lenses that incorporate institutional theory, stakeholder theory, legitimacy theory and environmental externality theory. Based on a Chinese and English literature review of CER issues in China, this paper incorporates the findings of Chinese indigenous research and provides an extended framework for the Chinese context. Thus, the extended framework adds to the Chinese CER literature by synthesising influential factors on CER practice and performance, which in turn provides a conceptual model for policy makers to promote national environmental champions at a micro level, for example, the implementation of China's SDG 2030 Agenda. In addition, the construction of the Chinese CER framework illustrates how the general framework can be modified for a mixed economy where the institutional supports for CER are significantly different from those in a free market economy.