This study investigates the relationship between environmental audit programs and various organizational characteristics in S&P 500 companies.
Abstract
Purpose
This study investigates the relationship between environmental audit programs and various organizational characteristics in S&P 500 companies.
Design/methodology/approach
The data for the study are derived from two different sources. First, environmental audit related data were obtained from the corporate environmental profiles database (CEPD) which is published by the Investor Research Responsibility Center (IRRC). All firms who responded to the survey between 1998 and 2003 were included for the study. In total, 192 firms responded during this time period. Second, other firm specific and industry data were obtained from research insight (i.e. COMPUSTAT) database, which is published by Standard and Poor's.
Findings
The results show that an increasing number of companies are adopting environmental audit programs and industry‐specific factors affect an organization's decision to adopt environmental audit programs.
Research limitations/implications
Since the paper relies on the survey data, one of the limitations of the study is possible self‐selection bias in the sample. Caution is needed before the results may be generalized. One promising area of future research is to investigate the relationship between the firm‐specific characteristics identified in this study and the performance (both financial and non‐financial) of the organization.
Practical implications
The results of the study can provide useful information to organizations that are planning to implement environmental auditing program.
Originality/value
The study is one the first for investigating the characteristics between companies with environmental audit programs and those who do not using an entire set of S&P 500 firms. Even though there have been some studies regarding environmental auditing, few have investigated the entire population of S&P 500 companies.