Greening corporate practices: a review of tax and subsidy influence on pro-environmental behaviors across industries

Abstract

Purpose

This study examines conditions under which taxes and subsidies designed to mitigate corporate environmental impact positively influence corporate pro-environmental behavior (CPEB) adoption, considering unique dynamics within different industries.

Design/methodology/approach

A systematic literature review was conducted on 171 articles. Articles were coded using an inductive grid for comprehensive examination.

Findings

Taxes generally positively influence CPEB adoption, but reduced positive or even negative effects can arise. Subsidies, while often facilitating the achievement of environmental goals, variously impact CPEB. Explanations for variations include the level of taxation or subsidy, economic agent affected, subsidy source, nature of subsidy, factors external to tax or subsidy characteristics and conflicting environmental objectives. We suggest research avenues for each aspect, to enhance literature on the influence of tax policies on promoting CPEB.

Practical implications

Beyond general tax-policy considerations, we provide policymakers with recommendations for tax policies designed to promote CPEB.

Originality/value

We examine the distinctive effects of taxes and subsidies on CPEB adoption within diverse industries ((re)manufacturing, agriculture, shipping, automobile, freight transport and power generation). We compare specific effects across industries, and advocate detailed exploration of recurrent elements identified, emphasizing their potential significance in designing taxes and subsidies that promote CPEB.

Citation

De Boe, G., Swaen, V. and Lamensch, M. (2024), "Greening corporate practices: a review of tax and subsidy influence on pro-environmental behaviors across industries", Journal of Organizational Change Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JOCM-12-2023-0553