Journal of Environmental Management 296 (2021) 113364

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Journal of Environmental Management

journal homepage: www.elsevier.com/locate/jenvman

Are corporate environmental activities to meet sustainable development

goals (SDGs) simply greenwashing? An empirical study of environmental
management control systems in Vietnamese companies from the
stakeholder management perspective
Kimitaka Nishitani a, *, Thi Bich Hue Nguyen b, Trong Quy Trinh c, Qi Wu d, Katsuhiko Kokubu e
a
Research Institute for Economics and Business Administration, Kobe University, 2-1 Rokkodai Nada Kobe, 657-8501, Japan
b
Faculty of Japanese, Foreign Trade University, 91 Chua Lang St. Dong Da Dist. Hanoi, Viet Nam
c
School of Accounting and Auditing, National Economics University, 207 Giai Phong St. Hai Ba Trung Dist. Hanoi, Viet Nam
d
Faculty of Economics and Business Administration, Kyoto University of Advanced Science, 18 Gohanda-cho Yamanouchi Ukyo Kyoto, 615-8577, Japan
e
Graduate School of Business Administration, Kobe University, 2-1 Rokkodai Nada Kobe, 657-8501, Japan

A R T I C L E I N F O A B S T R A C T

Keywords: The purpose of this study is to address the criticism that corporate environmental activities to meet the UN
Environmental management control system sustainable development goals (SDGs) are simply greenwashing. To this end, we clarify whether and why
Environmental performance corporate environmental activities are effective in achieving SDGs from the stakeholder management perspec­
Sustainable development goals (SDGs)
tive. Using data on Vietnamese companies, we first empirically clarify the influence of stakeholder pressure on a
Stakeholder management
company’s environmental management control system (EMCS) implementation as a comprehensive approach to
environmental activities and maintaining a proactive attitude toward the SDGs. Second, we examine the influ­
ence of EMCS implementation on environmental performance with or without proactive attitudes. The main
findings are as follows. Companies implementing EMCSs normally improve their environmental performance,
and pressure from final consumers and the government is a precondition for this accomplishment. However, if
these companies incorporate the SDGs into their business targets, they can actually improve their environmental
performance somewhat further, and government pressure plays an important role in this additional accom­
plishment. Therefore, corporate environmental activities to meet the SDGs work better than existing activities in
Vietnam, refuting the criticism of greenwashing. Importantly, the Vietnamese government as a powerful
stakeholder has proactively promoted domestic structural change to achieve the SDGs and has enacted many
policies to encourage companies to be proactive in their environmental activities.

1. Introduction
In 2015, the United Nations unanimously adopted an agenda for
sustainable development known as the sustainable development goals
(SDGs), a set of 17 goals with 169 targets to be achieved by 2030. The
objective of the SDGs is
“to end poverty and hunger everywhere; to combat inequalities
within and among countries; to build peaceful, just and inclusive
societies; to protect human rights and promote gender equality and
the empowerment of women and girls; and to ensure the lasting
protection of the planet and its natural resources” (United Nations,
2015, p.3).
The SDGs are political goals for which governments of both devel­
oped and developing countries have primary responsibility, although
achieving them requires all stakeholders’ engagement and collaboration
(Kroll, 2015). One background to this is that the hitherto self-regulatory
initiatives such as the United Nations Global Compact were not effective
owing to the lack of monitoring mechanisms and the absence of specific
targets (Macellari et al., 2021). Hence, because the SDGs call for a strong
political commitment, each government adopts its own SDG policies,
taking into account its national context (Kim, 2018). At the same time,

* Corresponding author.
E-mail address: kimitakan@rieb.kobe-u.ac.jp (K. Nishitani).

https://doi.org/10.1016/j.jenvman.2021.113364
Received 27 April 2021; Received in revised form 7 July 2021; Accepted 19 July 2021
Available online 5 August 2021
0301-4797/© 2021 Elsevier Ltd. All rights reserved.
K. Nishitani et al.
companies that have particular strengths, including specific skills and
resources for innovation, are expected to play a primary role in
achieving the SDGs (Rendtorff, 2020; Scheyvens et al., 2016). This is
obvious from the fact that companies’ engagement in the SDGs is a
priority issue for government SDG policies (Kim, 2018).
In response to such expectations, many companies around the world
have embraced the SDGs (Rendtorff, 2020). Indeed, many companies
display their social and environmental sustainability activities (here­
after, sustainability activities) with the logos and icons of the SDGs in
their sustainability reports and integrated reports. This is reasonable
when many companies consider their sustainability activities to be an
essential requirement for their survival and growth, and many com­
panies had implemented such activities even before the SDGs (Nishitani,
2009; Sharif and Rashid, 2014).
However, if a company’s sustainability activities to meet the SDGs
are the same as existing activities conducted in the name of SDGs, they
are simply greenwashing (or “SDG washing”). In short, these activities
may be just “cosmetic gestures and re-labelling, without serious modi­
fication of their activities” (Crabtree and Gasper, 2020, p.173). This
could happen because it is widely believed that a company’s motivation
for disclosing sustainability activities to the public is to gain legitimacy,
and if so, the rhetoric of such disclosures may differ from the underlying
reality (Nishitani et al., 2017b; Sundin and Brown, 2017). Indeed, recent
critical literature on greenwashing and impression management in
sustainability reporting supports this view (e.g., Macellari et al., 2021;
Michelon et al., 2015; Talbot and Boiral, 2018; van der Waal and
Thijssens, 2020). In particular, van der Waal and Thijssens (2020) crit­
icize such practices in the SDG context. Companies pursuing the SDGs
are expected to change practices and adapt (D’Souza et al., 2019). Thus,
although companies are currently expected to implement sustainability
activities more proactively than ever to achieve the SDGs, there may be a
discrepancy between the expected and actual activities, which raises the
possibility of greenwashing. However, because relatively few studies
have addressed corporate sustainability activities to meet the SDGs,1 this
issue has been largely unexamined in the academic literature.
For a company to implement its sustainability activities proactively
and eventually contribute to the SDGs, sustainability has to be linked to
its main business (Hörisch et al., 2014). For that reason, stakeholder
management, which is a prerequisite for linking them, is expected to
address the abovementioned discrepancy (Goel, 2019). Stakeholder
management urges companies to consider the impact of their activities
on their stakeholders from the strategic perspective, and/or to take ac­
count of the expectations of their stakeholders from the ethical (legiti­
mating) perspective (Fassin, 2012).
Stakeholder management is about managing stakeholders’ interests,
based on stakeholder theory, which is a managerial concept of organi­
zational strategy and ethics (Freeman, 1984; Freeman and Philips, 2002;
Madsen and Ulhøi, 2001). In stakeholder theory, we consider that ‘‘[a
company’s] success is dependent on how well it manages the relation­
ship with [stakeholders] that can affect the realization of its purpose’’
(Freeman and Philips, 2002, p.333). Because different stakeholders have
different views about how a company should conduct its activities, there
will be negotiations with various stakeholders (Reverte, 2009). Whereas
the conventional stakeholder theory considers all stakeholders to be
equally important, a different view of stakeholder theory recognizes that
powerful stakeholders are more important than others (Reverte, 2009).
That is, the greater the power of stakeholders, the greater the impor­
tance of adapting to stakeholder interests (Gray et al., 1995; Roberts,
1992). According to this view, a company’s survival and growth are the
result of meeting the interests of its (more) powerful stakeholders
(Madsen and Ulhøi, 2001). Thus, if a company considers that its
1
For example, a search for “sustainable development goals” and “companies”
in the Web of Science Core Collection database yielded only 355 journal article
hits on June 11, 2021.
2
Journal of Environmental Management 296 (2021) 113364
activities improve sustainability performance and allow the company to
manage its powerful stakeholders strategically and/or ethically, a pos­
itive triadic relationship between stakeholder power, sustainability ac­
tivities, and performance is expected (Roberts, 1992).
Accordingly, the purpose of this study is to challenge the claim that
corporate sustainability, especially environmental, activities to meet the
SDGs are simply greenwashing. To this end, we clarify whether and why
corporate environmental activities to meet the SDGs are effective in
achieving SDGs from the stakeholder management perspective. Because
50 % or more of the SDG targets are directly linked to the environment,
this study specifically focuses on the environmental management con­
trol system (EMCS) to represent environmental activities rather than
sustainability activities in general (Omisore, 2018). An EMCS is a form
of management control system (MCS) that considers environmental as­
pects. The idea of an MCS as a control mechanism or system has been
part of management accounting for decades (Malmi and Brown, 2008).
An EMCS is thus a mechanism designed for desirable organizational
activities, especially their environmental aspects. Although environ­
mental management systems (EMSs) have often been employed as a
measure of environmental activities in previous studies, the focus of
recent studies has shifted from EMSs to EMCSs as a more advanced and
comprehensive approach (Guenther et al., 2016; Kokubu et al., 2019).
Using data on Vietnamese companies, we empirically clarify not only
the influences of stakeholder pressure on a company’s EMCS imple­
mentation and maintaining a proactive attitude toward the SDGs but
also the influence of EMCS implementation on environmental perfor­
mance with or without a proactive company attitude. Thus, the novel
point of this study regarding the relationship between stakeholder
management and environmental performance (through EMCS imple­
mentation) is that we clarify how stakeholder power influences envi­
ronmental performance over and above normal efforts to accomplish the
SDGs. We consider that the focus on Vietnam is appropriate, because
efforts from both developed and developing countries are intrinsically
necessary to achieve the SDGs, and Vietnam actively seeks to fulfill its
responsibility as one of the Next Eleven.2
The remainder of this paper is organized as follows. Section 2 dis­
cusses a research framework for this study with a literature review and
develops our hypotheses after briefly explaining EMCSs. In Section 3, we
provide an overview of the SDGs in Vietnam as contextual information,
introduce the regression models, and give details of the data and vari­
ables used. Section 4 presents the estimation results, and Section 5
presents the discussion and conclusion.
2. Research framework
This section discusses the theoretical perspective of stakeholder
management of corporate sustainability activities with a literature re­
view and develops our hypotheses regarding environmental activities
(implementation of EMCSs) to meet the SDGs after briefly explaining
EMCSs.
2.1. Theoretical perspective on stakeholder management
There is an ongoing debate over whether a company’s sustainability
activities are social responsibilities or economic (or strategic). The
former is interpreted as an effort to gain legitimacy (Freeman and
Phillips, 2002), while the latter is a means to increase profits as con­
ventional economics assumes (Fisher, 2019). Researchers have tried to
clarify what sustainability activities really are, drawing on various ac­
ademic theories in line with their own academic interests. However,
2
The Next Eleven are 11 countries (Bangladesh, Egypt, Indonesia, Iran,
Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam) that
have high potential to be the world’s largest economies in the 21st century
following the BRICS (Brazil, Russia, India, China and South Africa).
K. Nishitani et al.
because no environmental, social, or economic interest can be sacrificed
to achieve sustainable development, the choice of sustainability or
economics does not matter intrinsically. That is, social responsibility and
economics are not in diametric opposition but are two sides of the same
coin in a company’s sustainability activities.
In this situation, stakeholder theory is useful for analyzing such
multifaceted activities3 because stakeholder management is a prereq­
uisite for linking sustainability and a company’s main business. Based on
a literature review, Freeman and Phillips (2002) suggest that stake­
holder theory fits well not only with strategic management and ethics
but also with law, economics, and organizational theory, and these
disciplines should not be mutually exclusive.
Stakeholder theory is “a set of propositions that suggest that man­
agers of [companies] have obligations to some group of stakeholders”
(Freeman, 2015, p.1). Because there are several streams of stakeholder
theory depending on “a diverse range of evidence and contradictory
arguments” (Mainardes et al., 2011, p. 237), stakeholder theory is best
considered as a genre of stakeholder theories rather than as a specific
theory, as Freeman (1994) and Freeman and Phillips (2002) suggest.
The (core) concept of a stakeholder is “any group or individual who can
affect, or is affected by, the achievement of a [company’s] purpose”
(Freeman, 1984, p.46), and major company stakeholders generally
include shareholders and investors, customers, final consumers, em­
ployees, community, government, suppliers, and competitors (Carroll,
2004; Freeman, 1994). Of course, there are many other stakeholders,
such as the media and non-governmental organizations (NGOs). Inter­
estingly, Carroll (2004) also regards the natural environment as a major
stakeholder in companies. Although this stakeholder-oriented approach
is often juxtaposed with the shareholder-oriented approach (Freeman,
2015), we should keep in mind that shareholders are also stakeholders.
The focus of stakeholder theory is managerial decision-making with
the mind-set that companies should manage and satisfy the interests of
diverse stakeholders. This view is derived from the notion that the
realization of a company’s purpose, including corporate sustainability
and social and environmental sustainability, depends on its relationships
with stakeholders (Fisher, 2019; Freeman, 1984; Friedman and Miles,
2002; Freeman and Philips, 2002; Patel et al., 2016). This is based on the
understanding that different stakeholders have different interests
regarding a company’s activities (Dare et al., 2014). For that reason,
stakeholder management is expected to ensure that as many stakeholder
groups as possible are heading in the same direction.
In the conventional view, because all stakeholders are equally
important (Freeman and McVea, 2001), companies are required to treat
all stakeholders equally by balancing the trade-offs between stake­
holders, in their own interests (Patel et al., 2016; Phillips et al., 2003).
This implies that it is essentially important for a company to satisfy
powerful stakeholders’ interests alongside those of its regular stake­
holders (Belyaeva, 2015). Madsen and Ulhøi (2001) suggest that an
interactive process of negotiation and compromise with powerful
stakeholders will provide a new temporary balance of conflicting in­
terests between stakeholders, implying that the repetition of such tem­
porary balancing will constitute a constant balance. Thus, the focus of
the conventional view is to satisfy the interests of a broader group of
stakeholders rather than of specific stakeholder(s) (Patel et al., 2016).
This is reasonable from the perspective that if a stakeholder’s interests
are satisfied at the expense of other stakeholders, the other stakeholders
will withdraw their support (Freeman, 2007). Following this conven­
tional view, most analyses take a single stakeholder perspective (Patel
3 secondary stakeholders, finding that primary stakeholders such as the
However, when applying stakeholder theory, we should also consider the
criticism by Donaldson and Preston (1995) that “the concepts [of] stakeholder,
stakeholder model, stakeholder management, and stakeholder theory are
explained and used by various authors in very different ways and supported (or
critiqued) with diverse and often contradictory evidence and arguments” (p.
66).
3
Journal of Environmental Management 296 (2021) 113364
et al., 2016).
However, the idea that all stakeholders are equally important would
impede the further development of stakeholder theory (Freeman and
McVea, 2001). Indeed, many studies have found that it was not always
the case that all stakeholders were equally important, implying that
(only) powerful stakeholders’ support is actually necessary for a com­
pany’s survival and growth (e.g., Madsen and Ulhøi, 2001; Pérez et al.,
2020; Tang and Tang, 2012). Powerful stakeholders are those that can
control critical resources (Magness, 2006; Pfeffer and Salancik, 1978;
Ullmann, 1985). Clarkson (1995) classifies stakeholders into primary
and secondary stakeholders, defining the former as “one without whose
continuing participation the [company] cannot survive as a going
concern” (p. 106) and the latter as “[those] who influence or affect, or
are influenced or affected by, the [company], but they are not engaged
in transactions with the [company] and are not essential for its survival”
(p. 107), which clearly implies the possibility of primary stakeholders
being more powerful than secondary stakeholders. However, because
stakeholder power depends on the mutual relationship with the com­
pany and/or other stakeholders, the power, if anything, is relative and
not absolute (Eesley and Lenox, 2006; Tang and Tang, 2012). Henriques
and Sadorsky (1999) find that a perception gap concerning the relative
importance of different stakeholders between more and less environ­
mentally conscious companies supports this view. Thus, the magnitude
of this relative power could determine the power relationship (Tang and
Tang, 2012). This relative power could be based on a stakeholder’s
absolute power, legitimacy, and urgency (Magrizos et al., 2021; Mitchell
et al., 1997). Of these, absolute power is the most important (Parent and
Deephouse, 2007), and it can be divided into coercive (i.e., physical
means), utilitarian (i.e., material and financial means), and normative (i.
e., symbolic means) (Mitchell et al., 1997). It is likely that this absolute
power is not equally distributed among stakeholders (Fassin, 2012).
From this perspective, stakeholder theory should focus on the (so­
cially and economically) powerful stakeholders. The idea that all
stakeholders are equally important can be explained by other theories
such as legitimacy theory, which considers stakeholders as a whole
(Reverte, 2009). Thus, the greater the power of stakeholders, the greater
the importance of adapting to stakeholder interests (Gray et al., 1995;
Roberts, 1992). At the same time, the less powerful stakeholders can rely
on the more powerful stakeholders to represent their interests (Fassin,
2012; van Rees et al., 2019). Otherwise, they could influence a company
by mobilizing public opinion against its activities (Pérez et al., 2020).
Thus, companies are expected to respond to their more powerful
stakeholders by satisfying their interests regardless of the strategic or
ethical (legitimating) purpose. However, not all stakeholders always
have an interest in sustainability, meaning that the influence of different
stakeholders (or a company’s perception of the influence of stake­
holders) on sustainability will differ (Plaza–Úbeda et al., 2009).
Accordingly, if the powerful stakeholders have an interest in sustain­
ability, stakeholder power could be positively related to the company’s
sustainability activities and accordingly its sustainability performance
(Ullmann, 1985).
2.2. Who are the powerful stakeholders?
Many studies have analyzed the influence of stakeholder power on a
company’s sustainability activities and performance. To develop the
hypotheses, we review some key studies to identify the powerful
stakeholders that potentially influence corporate sustainability activities
to meet the SDGs.
Bremmers et al. (2007) focus on the difference between primary and
government and customers are more influential than secondary stake­
holders such as environmental organizations on a company’s imple­
mentation of EMSs in the Dutch agrifood sector. Studer et al. (2008)
interview several stakeholders, finding that the influence of the gov­
ernment is fundamentally important in encouraging small and
K. Nishitani et al.
medium-sized enterprises (SMEs) in Hong Kong to improve their envi­
ronmental performance. Nishitani (2009) analyzes internationally
certified EMSs and finds that the stronger pressure of foreign customers
and long-term shareholders positively influences the adoption of ISO
14001 in Japanese manufacturing companies.
Haddock–Fraser and Tourelle (2010) focus on final consumers as a
specific stakeholder and find that companies closer to the final con­
sumers are more active in implementing environmental activities,
disclosing environmental information particularly related to climate
change. Tang and Tang (2012) investigate the explicit power difference
between stakeholders and a company, concluding that the power dif­
ferences between the government, competitors, and the media influence
Chinese SMEs’ environmental performance. Haque and Islam (2015)
examine the corporate climate change accountability in Australia and
find that institutional investors and the government are recognized as
the most powerful stakeholders. Bose et al. (2018) target the banking
industry in Bangladesh, finding that the level of green banking disclo­
sures is positively influenced by regulatory guidance.
Rashid et al. (2020) analyze the influence of chief executive officer
(CEO) power on sustainability disclosures in Bangladeshi companies and
find that although CEO power decreases disclosures, this negative
relationship is weakened by the influence of international buyers. Yunus
et al. (2020) focus on the perceived pressure from stakeholders on a
company’s decision to adopt carbon management strategies in Australia,
concluding that the government, the media, and creditors are influential
stakeholders.
From this literature review, we have identified the influence of
stakeholder power on a company’s sustainability activities and perfor­
mance to some extent, which supports the view that sustainability ac­
tivities and performance are regarded as efforts to satisfy stakeholder
interests strategically and/or ethically. However, the (more) powerful
stakeholders vary widely across the studies, supporting the view that
stakeholders basically have their own interests in corporate sustain­
ability activities and performance. Therefore, if a company’s sustain­
ability activities were regarded as efforts to satisfy powerful
stakeholders, the company would implement them proactively.
Following this line of argument, because sustainability activities to
meet the SDGs are advanced forms of existing sustainability activities,
these previous findings are also expected to apply to the SDG context.
Although there is a lack of studies addressing corporate sustainability
activities to meet the SDGs, studies with a similar focus would support
this view. Pizzi et al. (2021), Rosati and Faria (2019a, 2019b), Silva
(2021) and van der Waal and Thijssens (2020) found that a company’s
SDG reporting practices were motivated by several factors, including
legitimacy (i.e., all stakeholders) and institutional (i.e., the government)
factors. That is, if a company’s activities to meet the SDGs were regarded
as efforts to satisfy powerful stakeholders, the company would imple­
ment their sustainability activities to meet the SDGs proactively. How­
ever, this literature review shows that the identification of more
powerful stakeholders depends on the context. Thus, because a literature
review alone cannot identify the more powerful stakeholder(s) that in­
fluence a company’s sustainability activities, including those to meet the
SDGs, it is necessary to do so empirically.
In addition, although some studies have analyzed the direct rela­
tionship between stakeholder power and a company’s sustainability
performance, it is reasonable to consider that stakeholder power indi­
rectly influences sustainability performance via activities, because it is
unreliable for companies to improve their sustainability performance
without implementing activities for this purpose. Indeed, previous
studies support this view. Nishitani et al. (2012) find that companies
implementing the EMSs are more likely to reduce environmental bur­
dens. Zhou et al. (2017) find that companies combining material flow
cost accounting and the circular economy concept reduce environmental
burdens, conserve resources and energy, and improve their economic
performance. Therefore, a positive triadic (not dyadic) relationship be­
tween stakeholder power, sustainability activities, and performance, i.
4
Journal of Environmental Management 296 (2021) 113364
e., stakeholder power → sustainability activities → sustainability per­
formance, is expected.4
However, when identifying the contribution of this triadic relation­
ship to the SDGs more precisely, we should also pay attention to the
perception gap of powerful stakeholders between companies with or
without a proactive attitude toward the SDGs, following the findings of
Henriques and Sadorsky (1999). This gap would ultimately affect a
company’s sustainability performance. That is, if sustainability activities
to meet the SDGs are actually a more advanced approach, companies
with a proactive attitude toward them are expected to improve sus­
tainability performance more than others. Nishitani et al. (2016) find
that although companies implementing EMSs are more likely to reduce
their greenhouse gas emissions, those additionally implementing green
supply chain management as a more advanced activity are likely to
reduce them further. Their finding suggests the possibility that com­
panies with a proactive attitude toward the SDGs are more likely to
improve their sustainability performance further by implementing sus­
tainability activities, i.e., stakeholder power → sustainability activities
with a proactive company attitude toward the SDGs → further sustain­
ability performance. In other words, we ultimately expect stakeholder
power to influence additional efforts to exceed normal sustainability
performance, whereby companies are expected to implement sustain­
ability activities more proactively than ever to achieve the SDGs.
However, we could not find studies of the relationship between stake­
holder power and such additional efforts beyond the normal accom­
plishment of sustainability performance, as reflected in the studies
reviewed above. Conversely, if there is no difference in sustainability
performance between companies with or without a proactive attitude
toward the SDGs, the sustainability activities to meet the SDGs can be
regarded as greenwashing.
From this discussion, it is possible to derive a hypothesis regarding
corporate sustainability activities to meet the SDGs from the stakeholder
management perspective. As noted, we focus on environmental activ­
ities, more specifically on EMCSs, rather than on sustainability activities
in general. Before developing our hypotheses, we briefly explain EMCSs.
2.3. EMCSs
An EMCS is a mechanism designed to guide desirable organizational
activities, especially in their environmental aspects. Thus, we can say
that companies implement various environmental activities by such
mechanisms. An EMCS is rooted in an MCS. An MCS is a procedure and
system that use information to maintain or alter patterns in organiza­
tional activities (Henri, 2006; Simons, 1987). The most frequently used
MCS frameworks are Simons’ (1995) “lever of control” and Merchant
and Van der Stede’s (2011) “object of control” (Guenther et al., 2016).
Whereas Simons (1995) emphasizes the strategic and formal aspects of
MCSs, Merchant and Van der Stede (2011) highlight the more compre­
hensive aspects (Guenther et al., 2016; Moilanen, 2012), and classify
management control into categories of results (outcomes), action
(behavior), personnel, and cultural controls. The former two are regar­
ded as formal controls, and the latter two as informal or softer controls
(Guenther et al., 2016; Moilanen, 2012). Therefore, an MCS is designed
to support an organizational strategy or an organization’s best interests
(depending on the context).
Because the concept of EMCSs originating in MCSs is new and un­
derdeveloped, there is still a lack of uniform terminology (Guenther
et al., 2016; Pondeville et al., 2013). Adapting Simons’ (1995) frame­
work, Pondeville et al. (2013) define an EMCS as “a package of formal,
information-based routines and procedures that managers use to main­
tain or alter patterns in organizational activities, specifically concerning
the environmental aspects of organizational performance” (p.318).
However, Pondeville et al. (2013) also stress that it is necessary to
4
“→” means “positively lead(s) to”.
K. Nishitani et al.
consider not only the formal aspects but also the informal aspects. By
contrast, Guenther et al. (2016) argue that “the concept of […] EMCS
provides a promising approach for integrating presently fragmented
lines of inquiry concerning the internal drivers and managerial processes
that may foster [companies’] environmental performance” (p.147).
They draw on a comprehensive literature review of MCSs to suggest that
EMCSs facilitate the effective integration of environmental issues into
the development and implementation of strategy, aligning corporate
decision-making and employee actions with environmental objectives
and improving the identification of emerging threats and opportunities.
This possibility is supported to some extent by scholars such as Norris
and O’Dwyer (2004), Rötzel et al. (2019), and Sundin and Brown
(2017), who find that EMCSs can function as expected. Because these
studies also suggest the importance of informal controls in addition to
formal controls, more comprehensive EMCSs have an advantage over
those with formal controls alone.
As Guenther et al. (2016) expect, an EMCS (as a hub for desirable
organizational activities, especially the environmental aspects) may
ultimately improve environmental performance while improving
financial performance by translating environmental objectives into
corporate activities. Although the number of studies that analyze the
relationship between EMCSs and environmental performance is very
limited, some show the existence of such relationships. Kokubu et al.
(2019) analyze the relationship between the implementation of EMCSs
based on Merchant and Van der Stede’s (2011) framework and envi­
ronmental performance in Thai companies, and find that EMCSs
improve resource efficiency and pollution reduction. Kokubu et al.
(2019) interpret four controls in Merchant and Van der Stede’s (2011)
EMCS framework as follows. The results controls have both financial and
nonfinancial objectives, and they are used to define expected results and
to monitor and evaluate employees’ performance. Action controls
ensure that the employees act in their organization’s best interest.
Personnel controls are applied to foster individual motivations, and
cultural controls define expected norms and values. Because Kokubu
et al. (2019) also support comprehensive EMCSs, here we adopt Mer­
chant and Van der Stede’s (2011) framework, following Kokubu et al.
(2019).
2.4. Hypothesis development
Based on the abovementioned arguments, we test the following four
hypotheses.
H1. Companies facing strong pressure from powerful stakeholders are
more likely to implement EMCSs.
H2. Companies facing strong pressure from powerful stakeholders are
more likely to have a proactive attitude toward the SDGs.
H3. Companies implementing EMCSs are more likely to improve their
environmental performance.
H4. Companies with a more proactive attitude toward the SDGs are
likely to improve their environmental performance more than others by
implementing EMCSs.
3. Research design
We first provide an overview of the SDGs in Vietnam as contextual
information, and then introduce the research design.
3.1. SDGs in vietnam
Vietnam proactively engaged with the Millennium Development
Goals (MDGs), the precursor of the SDGs, by implementing the
Comprehensive Poverty Reduction and Growth Strategy approved by
the Prime Minister in Document No. 2685/VPCP-QHQT in 2002 and
Document No. 1649/CP-QHQT in 2003. This strategy helped to form the
5
Journal of Environmental Management 296 (2021) 113364
Vietnam Development Goals, which localized MDGs. They were based
on the Socio-Economic Development Plan (SEDP) for the periods
2006–2010 and 2011–2015 (Vietnamese Ministry of Planning and In­
vestment, 2015a).
Until September 2015, this strategy yielded limited achievements in
only three of the eight MDGs: MDG1, eradicate extreme poverty and
hunger; MDG2, achieve universal primary education; and MDG3, pro­
mote gender equality and empower women (Vietnamese Ministry of
Planning and Investment, 2015b). Vietnam continued to face challenges
on other issues such as inequality in the distribution of economic gains,
chronic deprivation amongst ethnic minorities, and especially natural
disasters and extreme climate events as well as the inappropriate use and
exploitation of natural resources (United Nations Vietnam, 2016).
To address these challenges, the Vietnamese government and the UN
collaborated to create One Strategic Plan (OSP) to integrate the SDGs
into the 2011–2020 Socio-Economic Development Strategy (SEDS) and
the 2016–2020 SEDP. The OSP focuses on four areas, shaped by the
central themes of the SDGs—people, the planet, prosperity, and peace­
—along with nine related outcomes (United Nations Vietnam, 2017). In
the coming years, the SDGs will be fully and further integrated into
Vietnam’s 2021–2030 SEDS and 2021–2025 SEDP (Vietnamese Ministry
of Planning and Investment, 2018).
With the support of the United Nations Development Programme,
Vietnam successfully created the National Action Plan for the Imple­
mentation of the 2030 Agenda on SDGs (SDGs NAP). SDGs NAP proposes
17 Vietnamese SDGs (VSDGs) with 115 targets, compared with the 169
targets of the SDGs, although there are similarities and differences be­
tween the VSDG and SDG targets (Vietnamese Government Office,
2017). The VSDGs were approved by the Prime Minister in Decision No.
622/QD-TTg, dated May 10, 2017, and required engagement by various
levels of government, ministries, sectors, localities, institutions, social
organizations, the public, and other stakeholders to ensure the suc­
cessful implementation of the SDGs by 2030.
Overall, Vietnam has created a comprehensive legal framework to
encourage the achievement of the VSDGs and SDGs, which included a
SEDS for 2011–2020, a Decision on Approval of the NAP on Green
Growth in Vietnam for 2014–2020, a Resolution on the five-year SEDP
for 2016–2020, and a NAP for the implementation of the 2030 Agenda
on SDGs. In addition, a Sustainable Development Support Fund was
established to mobilize funding from the state budget, business in­
vestments, the private sector, local communities, and external resources
including official development assistance, foreign direct investment
(FDI), and other resources to ensure the implementation of the SDGs.
However, the decrease in FDI and expansion of public debt in Vietnam
(Vietnamese Ministry of Planning and Investment, 2015b) present
challenges to the achievement of the VSDGs.
Moreover, Vietnam has developed a framework for monitoring the
achievement of the SDGs. Among 186 indicators stated in the Law on
Statistics of November 23, 2015 (No. 89/2015/QH13), there are 39
indicators to evaluate the implementation of the SDGs in Vietnam.
Reviewing 230 SDG indicators, Nguyen (2017) shows that 124 in­
dicators are feasible, while 106 indicators are not feasible for reasons
including the lack of a suitable basis, methodology, or inapplicability to
the Vietnamese context. Reporting on the SDG process is considered to
be a key element in their successful implementation. The General Sta­
tistics Office of Vietnam developed a Sustainable Development Statis­
tical Information System for the public to engage in the monitoring
process as a key mission in 2017–2020. In 2020, Vietnam proposed a
Sustainable Development Statistical Information System for ASEAN that
was approved by all ASEAN members. In October 2020, the ASEAN SDG
Indicators Baseline Report and Online Database Portal were launched.5
Under these circumstances, Vietnamese companies embraced the SDGs;
5
https://asean.org/asean-launches-sdg-indicators-baseline-report-online-da
tabase-sdg-indicators [accessed December 29, 2020].
K. Nishitani et al. Journal of Environmental Management 296 (2021) 113364

according to our questionnaire survey introduced in Section 3.2, 75.2 %
of companies have incorporated or plan to incorporate the SDGs into
their business targets (see the mean of “incorporation of the SDGs into
business targets” in Table 1).
It is expected that these government policies will play an important
role in encouraging companies to implement sustainability activities to
meet the SDGs. If we focus only on such institutional pressure, an
approach based on institutional theory is an appropriate method of
analysis. However, even if we consider the institutional pressure, we
should analyze them from a broader perspective (including institutional
pressure), because it is widely known that stakeholder (as well as gov­
ernment) management is key to the success of corporate sustainability
activities (Goel, 2019).
3.2. Data
The cross-sectional data used to test our hypotheses were taken from
a questionnaire survey of 153 Vietnamese companies without missing
values conducted in 2017. The questionnaire survey was part of the
research program Policy Design and Evaluation to Ensure Sustainable
Consumption and Production Patterns in Asian Region, conducted by the
authors. The survey was administered to 1564 Vietnamese companies
excluding those in the financial industry (i.e., the agriculture, forestry &
fishing, mining, oil & gas, construction & real estate, information &
communication, manufacturing, transportation, utilities, services,
health care, wholesale & retail trade, consumer products, materials, or
other industries) listed on the Ho Chi Minh Stock Exchange (HOSE),
Hanoi Stock Exchange (HNX), or Unlisted Public Company Market
(UPCoM) during the period October 2017 to December 2017, and yiel­
ded 190 valid responses (12 %). The numbers of responses from com­
panies listed on each stock market were 45 (13 %) from those on HOSE,
34 (10 %) on HNX, and 111 (13 %) on UPCoM (with the response rate of
each stock market in parentheses). The numbers by industry were two
(6 %) from agriculture, forestry & fishing companies, 12 (20 %) from
mining, oil & gas, 11 (4 %) from construction & real estate, one (2 %)
from information & communication, 121 (24 %) from manufacturing,
two (2 %) from transportation, 35 (60 %) from utilities, and six (3 %)
from services industries (with the response rate of each industry in pa­
rentheses). Companies were asked about their environmental activities
(including those comprising EMCSs), environmental performance,
current business operations, company characteristics, stakeholders,
recognition of the SDGs, and similar topics.
3.3. Variables
The descriptive statistics of the dependent and independent variables
are shown in Table 1 and are defined in the following subsections.
3.3.1. Environmental performance
• CO2 emissions
• Resource efficiency
• Energy consumption
• Waste produced
• Hazardous waste produced
• Water use
• Pollution emissions
The proxies for environmental performance are CO2 emissions,
resource efficiency, energy consumption, waste produced, hazardous
waste produced, water use, and pollution emissions. Each of these
proxies is measured on a five-point Likert scale ranging from (5) “much
better” to (1) “much worse” in response to the following question (we
cut the relevant question out of the questionnaire (the same applies to
other variables)).
N) In comparison with average companies in your industry, how
would you evaluate the performance of your company over the
past three years in terms of the following indicators?
1. Total CO2 and CO2 equivalent emissions
2. Resource efficiency
3. Total energy consumption
4. Total amount of waste produced
5. Total amount of hazardous waste produced
6. Total water use
7. Reduction of pollution (air, water, or land)
We consider that using these answers from the questionnaire survey
as proxies for environmental performance is a second-best solution
when objective data are unavailable.

3.3.2. EMCS implementation

Table 1
Descriptive statistics.
• EMCSs
Obs. Mean S.D. Min Max

Environmental performance The proxy for EMCS implementation is having an EMCS based on
CO2 emissions 152 4.145 0.792 1 5 Merchant and Van der Stede’s (2011) framework. This proxy uses the
Resource efficiency 153 4.033 0.782 1 5
average of the constructed factor scores obtained from an exploratory
Energy consumption 153 4.000 0.716 3 5
Waste produced 153 3.987 0.811 1 5 factor analysis (EFA) using the score on a five-point Likert scale ranging
Hazardous waste produced 153 4.013 0.925 1 5 from (5) “strongly agree” to (1) “strongly disagree” in response to the
Water use 153 4.170 0.750 2 5 following questions.
Pollution emissions 153 4.196 0.778 2 5
EMCS implementation 153 0.031 0.831 − 3.401 1.109
Incorporation of SDGs into 153 0.752 0.433 0 1
H) Please rate the extent to which the following statements describe
business targets your company’s response to environmental values and norms
Stakeholders over the past three years.
Community 153 4.484 0.762 2 5 1. Traditions, values, and norms play a major role in our com­
Buyers 153 4.163 0.996 1 5
pany’s response to environmental management.
Final consumers 153 4.229 1.103 1 5
Employees 153 4.464 0.761 1 5 2. Our mission statement clearly communicates the company’s
Governments 153 4.203 1.060 1 5 core environmental values (i.e., the company’s philosophy) to
Shareholders and investors 153 4.137 0.967 1 5 our workforce.
Senior management commitment 153 4.438 0.909 1 5 3. Senior managers communicate the company’s core environ­
to environmental activities
Company size 153 13.333 1.465 8.650 17.920
mental values to our workforce.
ROA 153 0.311 3.096 − 0.156 38.344 4. Our workforce is aware of the company’s core environmental
Domestic market 153 0.804 0.398 0 1 values.
Competitive market 153 0.856 0.352 0 1
Manufacturing industry 153 0.654 0.477 0 1

6
K. Nishitani et al. Journal of Environmental Management 296 (2021) 113364

5. Our company relies on a code of business conduct (e.g., Table 2

compliance guidelines) for environmental management to EFA results for EMCS implementation.
define appropriate behavior for our workforce. Items Action/ Cultural Personnel
I) Please describe the extent to which the statements below char­ Results controls controls
acterize your company’s recruiting and development processes controls
over the past three years. K3 Potential deviations from 0.973
1. Our employees are carefully selected according to how well environmental performance
they suit our company’s environmental values and norms. goals must be explained by the
subordinates responsible.
2. Much effort has been put into establishing the most suitable K2 Subordinates’ achievement of 0.918
recruitment process for environmental jobs. environmental performance
3. Workforce training and development in environmental issues goals is controlled by their
are regarded as very important. respective superiors.
K4 Subordinates receive feedback 0.865
4. Environmental goal achievement is regarded as an important
from their superiors concerning
condition for promotion. the extent to which they
J) What characterizes the relationship between superiors and sub­ achieved their environmental
ordinates (e.g., general managers or business unit leaders) who performance goals.
also have management functions for addressing environmental J1 Superiors monitor and evaluate 0.822
the necessary steps regarding
management in your company over the past three years? their subordinates’
1. Superiors monitor and evaluate the necessary steps regarding achievement of environmental
their subordinates’ achievement of environmental perfor­ performance goals.
mance goals. J5 Subordinates discuss the 0.809
necessary work steps for
2. Superiors define the most important work steps for routine
achieving their environmental
environmental tasks. targets with their superiors.
3. Superiors provide subordinates with information on the most K1 Specific environmental 0.783
important steps regarding the achievement of environmental performance goals are
performance goals. established for subordinates.
J2 Superiors define the most 0.778
4. Policy and procedure manuals define the fundamental course
important work steps for
of environmental activities. routine environmental tasks.
5. Subordinates discuss the necessary work steps for achieving J4 Policy and procedure manuals 0.734
their environmental targets with their superiors. define the fundamental course
of environmental activities.
K) Please describe how the statements below characterize the rela­
J3 Superiors provide subordinates 0.683
tionship between superiors and subordinates (e.g., general man­ with information on the most
agers or business unit leaders) concerning environmental important steps regarding the
management in your company over the past three years. achievement of environmental
1. Specific environmental performance goals are established for performance goals.
H2 Our mission statement clearly 0.901
subordinates.
communicates the company’s
2. Subordinates’ achievement of environmental performance core environmental values (i.e.,
goals is controlled by their respective superiors. the company’s philosophy) to
3. Potential deviations from environmental performance goals our workforce.
H3 Senior managers communicate 0.832
must be explained by the subordinates responsible.
the company’s core
4. Subordinates receive feedback from their superiors concerning environmental values to our
the extent to which they achieved their environmental per­ workforce.
formance goals. H1 Traditions, values and norms 0.790
play a major role in our
company’s response to
We use principal component analysis with promax rotation to extract
environmental management.
all factors with eigenvalues >1, Kaiser–Meyer–Olkin values > 0.5, H4 Our workforce is aware of the 0.691
communality values > 0.5, factor loadings >0.5, and Cronbach’s alpha company’s core environmental
coefficients >0.7 in EFA. With these criteria, three factors were extrac­ values.
H5 Our company relies on a code of 0.505
ted. Table 2 summarizes the results for these items. Factor 1 consists of
business conduct (e.g.,
questions K3, K2, K4, J1, J5, K1, J2, J4, and J3, and captures the compliance guidelines) for
characteristics of action and results controls. Factor 2 consists of ques­ environmental management to
tions H2, H3, H1, H4, and H5, and captures the characteristics of cul­ define appropriate behavior for
tural controls. Factor 3 consists of questions I1, I2, and I4, and captures our workforce.
I1 Our employees are carefully 0.918
the characteristics of personnel controls. The validity and reliability of
selected according to how well
the constructs were confirmed by a confirmatory factor analysis. they suit our company’s
environmental values and
3.3.3. Proactive attitude toward the SDGs norms.
I2 Much effort has been put into 0.857
establishing the most suitable
• Incorporation of the SDGs into business targets recruitment process for
environmental jobs.
The proxy for a company having proactive attitudes toward the SDGs I4 Environmental goal 0.590
is the incorporation of the SDGs into business targets. This proxy is achievement is regarded as an
important condition for
measured by a dummy variable equal to 1 if the response to the
promotion.
following question is (1) Yes, and 0 otherwise, (0) No.
Eigenvalues 10.293 1.304 1.054
Cronbach’s alpha 0.958 0.888 0.850

7
K. Nishitani et al. Journal of Environmental Management 296 (2021) 113364

All values of promax-rotated factor loadings >0.50 are shown in the table.
S) Please indicate your agreement with the following statements rele­
vant to the SDGs.
2. Our company has incorporated or plans to incorporate the SDGs
into business targets.
management commitment to environmental activities is expected to
encourage a company to implement EMCS proactively. By contrast, it is
unlikely that senior management commitment directly improves envi­
ronmental performance. This instrumental variable is measured by re­
sponses to the following question on a five-point Likert scale ranging
from (5) “strongly agree” to (1) “strongly disagree.”

L) Please rate the extent to which the following statements describe

3.3.4. Stakeholders
your environmental decision-making processes over the past three
years.
• Community
1. Senior management is involved in environmental management.
• Buyers
• Final consumers
3.3.6. Control variables
• Employees
• Government
• Company size
• Shareholders and investors
• Return on assets (ROA)
• Domestic market orientation
The proxies for stakeholders are community, buyers, final con­
• Market competitiveness
sumers, employees, the government, and shareholders and investors.
• Manufacturing industry
These proxies represent the most important stakeholders in Vietnamese
companies’ environmental activities. First, the most important stake­
The control variables that may influence companies’ EMCS imple­
holders were selected by rankings in response to the following question.
mentation and performance as well as their relative power in relation to
stakeholders are company size, ROA, domestic market orientation,
F2) Please choose the most important stakeholder in environmental
competitiveness in the market, and being in the manufacturing industry.
management for your company from the list below.
Company size controls for the influence of size, measured by the loga­
1. Community
rithm of total assets. ROA controls for profitability, measured by net
2. Buyers
profit divided by total assets.6 Domestic market orientation controls for
3. Final consumers
market type, measured by a dummy variable equal to 1 if a company’s
4. Suppliers
primary market is Vietnam and 0 otherwise (any other region or coun­
5. Audit committees
try). Competitiveness in the market is measured by a dummy variable
6. Banks
equal to 1 if a company’s market is competitive and 0 otherwise (mo­
7. Shareholders/investors
nopoly or oligopoly). Manufacturing industry (which accounts for more
8. Employees
than half of the sample) controls for industry-specific influence,
9. Labor unions
measured by a dummy variable equal to 1 if a company belongs to the
10. NGOs
manufacturing industry and 0 otherwise (the agriculture, forestry &
11. Industrial associations
fishing, mining, oil & gas, construction & real estate, information &
12. The government
communication, manufacturing, transportation, utilities, or services
13. International organizations
industries). Regarding domestic market orientation, market competi­
14. The media, and
tiveness, and manufacturing industry, finer classifications seem prefer­
15. Competitors
able. However, in this case, the number of observations would decrease
greatly in the estimations with discrete dependent variables.
Then, the degree of importance of each of these stakeholders is
measured by the response to the following question on a five-point
Likert scale ranging from (5) “most important” to (1) “not at all 3.4. Regression model
important.”
This study employs ordinary least squares (OLS) to estimate the in­
F1) How important are the following stakeholders in your company’s fluence of stakeholder pressure on a company’s EMCS implementation
environmental management? (treated as a continuous dependent variable), and a probit model to
1. Community estimate the influence of stakeholder pressure on maintaining a proac­
2. Buyers tive attitude toward the SDGs (treated as a binomial dependent vari­
3. Final consumers able). In addition, we employ an ordered probit model to estimate the
7. Shareholders/investors influence of a company’s EMCS implementation on its environmental
8. Employees, and performance (treated as an ordinal dependent variable) with or without
12. The government a proactive attitude toward the SDGs.
However, in the analysis of the influence of EMCS implementation on
3.3.5. Instrumental variable environmental performance, an ordered probit estimation captures the
reverse causality whereby companies that improve their performance
• Senior management commitment to environmental activities are more likely to implement an EMCS if it is endogenous. Therefore, it is
necessary to test whether EMCS implementation is endogenous. For this
The instrumental variable that potentially influences EMCS imple­ purpose, an endogeneity test was conducted as part of a conditional
mentation but does not directly influence environmental performance is mixed process with a different two-stage least-squares approach using
senior management commitment to environmental activities. The senior management commitment to environmental activities as an
instrumental variable is used for regressions to avoid endogeneity bias if
the proxy for EMCS implementation is endogenous. Senior management
6
commitment is like a prerequisite framework for environmental The maximum value of ROA is 38.344. Although the sample with this value
improvement (Govindarajulu and Daily, 2004). Thus, senior seems to be an outlier, the estimation results with and without this sample do
not change.

8
K. Nishitani et al. Journal of Environmental Management 296 (2021) 113364

instrumental variable (Roodman, 2011). According to the result of the Table 3

endogeneity test, because EMCS implementation is exogenous (not Influence of stakeholder pressure on a company’s EMCS implementation and its
shown in the tables), an ordered probit estimation is the appropriate proactive attitudes toward the SDGs.
approach. OLS Probit
We estimate the following regressions individually. First, the influ­ (1) (2)
ence of stakeholder pressure on EMCS implementation is estimated as:
EMCS SDGs
EMCS = α0 + α1 Stakeholders + α2 Sen
(1) Stakeholders
+α3 Cont + ε, Community 0.036 0.093
(0.114) (0.174)
where EMCS is EMCS implementation, Stakeholders is stakeholders, Sen Buyers − 0.122 0.028
is senior management commitment to environmental activities, Cont is (0.110) (0.161)
Final consumers 0.156* − 0.010
the control variables, α0− 3 are the estimation parameters, and ε is the
(0.092) (0.154)
error term. Second, the influence of stakeholder pressure on maintaining Employees 0.054 − 0.417*
a proactive attitude toward the SDGs is estimated as: (0.103) (0.232)
Government 0.152* 0.251**
SDGs* = β0 + β1 Stakeholders + β2 Sen + β3 Cont + u, (0.080) (0.122)
{
1 if SDGs* > 0 (2) Shareholders and investors 0.108 0.045
SDGs = (0.078) (0.164)
0 Otherwise
Senior management commitment to environmental 0.410*** 0.320**
activities
where SDGs* is a latent variable for SDGs; SDGs is the incorporation of (0.080) (0.140)
the SDGs into business targets, β0− 3 are the estimation parameters, and u Company size 0.070** 0.282***
is the error term. Third, the influence of a company’s EMCS imple­ (0.035) (0.086)
mentation on its environmental performance is estimated as: ROA − 0.009 − 0.033*
(0.007) (0.018)
Envp* = γ0 + γ1 EMCS + γ2 Stakeholders Domestic market − 0.056 0.298
(3) (0.134) (0.303)
+γ3 Cont + θ,
Competitive market − 0.060 0.680*
⎧ (0.194) (0.376)
*
⎪
⎪ 1 if Envp ≤ μ1 Manufacturing industry 0.029 − 0.185
⎨
2 if μ1 < Envp* ≤ μ2 (0.148) (0.295)
Envp = ,
⎪ ⋮ Constant − 4.284*** − 4.941***
⎪
⎩
5 if Envp* > μ5 (0.755) (1.556)

Observations 153 153

where Envp* is a latent variable for Envp; Envp is environmental per­ R2/Pseudo R2 0.462 0.177
formance, γ0− 3 are the estimation parameters, θ is the error term, and μ Standard errors are in parentheses. ***, **, and * denote significance at the 1 %,
is the threshold parameter to determine Envp. Finally, the influence of a 5 %, and 10 % levels, respectively.
company’s EMCS implementation with a proactive attitude toward the
SDGs is estimated as: the government are more likely to implement an EMCS. Thus, Hypoth­

Envp* = δ0 + δ1 EMCS + δ2 EMCS × SDGs + δ3 SDGs + δ4 Stakeholders + δ5 Cont + ρ, (4)

esis 1 is supported, and it is clear that the stakeholders with the most
influence over a company’s EMCS implementation are final consumers
⎧ and the government. In Model (2), the effect of employees is significant
⎪ 1 if Envp* ≤ μ1
⎪
⎨ and negative, and that of government is significant and positive. This
2 if μ1 < Envp* ≤ μ2
Envp = , suggests that companies facing weak pressure from employees and
⎪ ⋮
⎪
⎩
5 if *
Envp > μ5 strong pressure from the government are more likely to incorporate the
SDGs into their business targets. Thus, Hypothesis 2 is supported, and it
where δ0− 5 are the estimation parameters, and ρ is the error term. is shown that the stakeholder with the strongest (positive) influence
over a company’s proactive attitude toward the SDGs is the government.
In addition, in Models (1) and (2), senior management commitment is
3.5. Database significant and positive, suggesting that companies with senior man­
agers who pursue environmental activities proactively are more likely to
To create the aforementioned variables, company size and ROA were implement an EMCS and to incorporate the SDGs into their business
obtained from the Bloomberg database, and other data were obtained targets. The estimation results of control variables are not discussed for
from the questionnaire survey. the sake of brevity (the same applies to Tables 4 and 5).
Table 4 summarizes the estimation results for the influence of a
4. Estimation results company’s EMCS implementation on its environmental performance. In
Models (1)–(7), the EMCS effect is significant and positive. This suggests
Table 3 summarizes the estimation results for the influence of that companies with EMCSs are more likely to improve environmental
stakeholder pressure on a company’s EMCS implementation and main­ performance in terms of CO2 emissions, resource efficiency, energy
taining a proactive attitude toward the SDGs. In Model (1), the effects of consumption, waste produced, hazardous waste produced, water use,
final consumers and the government are significant and positive. This and pollution emissions. Thus, Hypothesis 3 is strongly supported. In
suggests that companies facing strong pressure from final consumers and

9
K. Nishitani et al. Journal of Environmental Management 296 (2021) 113364

Table 4
Influence of a company’s EMCS implementation on its environmental performance.
Ordered probit

(1) (2) (3) (4) (5) (6) (7)

CO2 Resource Energy Waste Hazardous Water Pollution

EMCS implementation 0.516*** 0.580*** 0.657*** 0.477*** 0.523*** 0.362*** 0.614***

(0.145) (0.144) (0.160) (0.135) (0.132) (0.126) (0.148)
Stakeholders
Community 0.148 0.126 − 0.047 0.097 0.032 − 0.060 0.022
(0.133) (0.127) (0.157) (0.135) (0.126) (0.138) (0.144)
Buyers − 0.032 − 0.083 0.102 0.015 0.124 − 0.194 − 0.034
(0.150) (0.163) (0.183) (0.153) (0.158) (0.128) (0.138)
Final consumers − 0.099 − 0.080 − 0.183 − 0.034 − 0.155 0.114 − 0.081
(0.119) (0.130) (0.140) (0.117) (0.132) (0.121) (0.121)
Employees 0.069 0.094 0.129 0.142 0.114 0.003 0.203
(0.186) (0.177) (0.187) (0.191) (0.180) (0.186) (0.207)
Governments 0.030 0.066 − 0.109 − 0.028 − 0.066 − 0.033 − 0.030
(0.116) (0.127) (0.126) (0.114) (0.116) (0.111) (0.117)
Shareholders and investors 0.062 0.155 0.175 0.147 0.187 0.199* 0.175
(0.134) (0.131) (0.133) (0.115) (0.125) (0.117) (0.135)
Company size − 0.019 0.044 0.015 − 0.010 0.009 0.015 − 0.050
(0.069) (0.071) (0.073) (0.064) (0.062) (0.070) (0.073)
ROA 0.980 − 0.025** − 0.836 0.009 0.015 0.841 0.007
(1.499) (0.012) (1.504) (0.011) (0.012) (1.587) (0.012)
Domestic market − 0.215 − 0.255 − 0.371 − 0.569** − 0.544** − 0.102 − 0.309
(0.237) (0.244) (0.260) (0.223) (0.222) (0.225) (0.233)
Competitive market 0.627* 0.098 − 0.046 0.372 0.220 − 0.082 0.073
(0.344) (0.339) (0.356) (0.368) (0.366) (0.333) (0.336)
Manufacturing industry − 0.127 − 0.208 − 0.217 − 0.151 − 0.051 0.107 0.106
(0.242) (0.247) (0.244) (0.242) (0.238) (0.247) (0.256)

Observations 152 153 153 153 153 153 153

Pseudo R2 0.095 0.130 0.126 0.102 0.096 0.065 0.121

Standard errors are in parentheses. ***, **, and * denote significance at the 1 %, 5 %, and 10 % levels, respectively.

Table 5
Influence of a company’s EMCS implementation on the environmental performance given a proactive attitude toward the SDGs.
Ordered probit

(1) (2) (3) (4) (5) (6) (7)

CO2 Resource Energy Waste Hazardous Water Pollution

EMCS implementation 0.365* 0.295 0.538** 0.140 0.350** 0.301* 0.573***

(0.195) (0.193) (0.245) (0.147) (0.165) (0.172) (0.205)
× Incorporation of SDGs into business targets 0.195 0.401* 0.074 0.413** 0.142 − 0.008 − 0.016
(0.234) (0.225) (0.276) (0.179) (0.199) (0.219) (0.230)
Incorporation of SDGs into business targets 0.256 0.380 0.563** 0.839*** 0.792*** 0.475** 0.403*
(0.237) (0.244) (0.248) (0.214) (0.234) (0.225) (0.245)
Stakeholders
Community 0.156 0.139 − 0.050 0.105 0.023 − 0.069 0.015
(0.135) (0.128) (0.152) (0.129) (0.125) (0.137) (0.148)
Buyers − 0.043 − 0.100 0.098 − 0.013 0.110 − 0.199 − 0.040
(0.149) (0.160) (0.183) (0.149) (0.159) (0.131) (0.142)
Final consumers − 0.098 − 0.080 − 0.172 − 0.013 − 0.134 0.129 − 0.068
(0.117) (0.130) (0.139) (0.117) (0.131) (0.121) (0.122)
Employees 0.093 0.126 0.196 0.232 0.202 0.056 0.249
(0.185) (0.177) (0.189) (0.196) (0.176) (0.186) (0.208)
Governments 0.026 0.069 − 0.142 − 0.054 − 0.107 − 0.065 − 0.056
(0.116) (0.127) (0.127) (0.114) (0.114) (0.111) (0.119)
Shareholders and investors 0.053 0.137 0.174 0.131 0.187 0.201* 0.179
(0.133) (0.128) (0.132) (0.120) (0.123) (0.118) (0.138)
Company size − 0.037 0.017 − 0.024 − 0.070 − 0.043 − 0.016 − 0.075
(0.070) (0.071) (0.072) (0.066) (0.065) (0.069) (0.073)
ROA 0.714 − 0.029*** − 1.477 0.008 0.018 0.317 0.011
(1.476) (0.011) (1.563) (0.011) (0.012) (1.615) (0.012)
Domestic market − 0.224 − 0.271 − 0.413 − 0.642*** − 0.618*** − 0.132 − 0.340
(0.238) (0.245) (0.263) (0.238) (0.235) (0.230) (0.233)
Competitive market 0.600* 0.053 − 0.139 0.255 0.076 − 0.175 − 0.017
(0.350) (0.349) (0.357) (0.360) (0.363) (0.331) (0.342)
Manufacturing industry − 0.122 − 0.204 − 0.220 − 0.142 − 0.026 0.119 0.123
(0.243) (0.243) (0.242) (0.232) (0.241) (0.249) (0.258)

Observations 152 153 153 153 153 153 153

Pseudo R2 0.100 0.142 0.142 0.139 0.125 0.077 0.130

Standard errors are in parentheses. ***, **, and * denote significance at the 1 %, 5 %, and 10 % levels, respectively.

10
K. Nishitani et al.
addition, the effects of shareholders and investors are significant and
positive in Model (6), suggesting that pressure from shareholders and
investors has an exceptionally positive influence on environmental
performance, in terms of water use via a path other than the EMCS
implementation.
Table 5 summarizes the estimation results for the influence of a
company’s EMCS implementation on its environmental performances
with a proactive attitude toward the SDGs. All models in the table also
include the variable of incorporation of the SDGs into business targets,
and the interaction term between this variable and an EMCS imple­
mentation. For this reason, the coefficient for EMCS implementation
indicates its influence for companies that do not incorporate the SDGs
into business targets, the coefficient of incorporation of the SDGs into
business targets indicates its influence via paths other than an EMCS
implementation, and the coefficient of the interaction term indicates a
difference between the degree of influence of implementation for com­
panies that incorporate the SDGs into business targets and those that do
not.
The EMCS implementation coefficient is significant and positive in
Models (1)–(7), except for Models (2) and (4). This suggests that even if
companies do not incorporate the SDGs into business targets, they are
more likely to improve their environmental performance in terms of CO2
emissions, energy consumption, hazardous waste produced, water use,
and pollution emissions by implementing an EMCS. The interaction term
between the EMCS implementation and incorporation of the SDGs into
business targets variables is significant and positive in Models (2) and
(4). This suggests that companies that incorporate the SDGs into busi­
ness targets are more likely to improve their environmental perfor­
mance, at least in terms of resource efficiency and waste produced, than
those that do not by implementing an EMCS. Therefore, Hypothesis 4 is
at least partially supported. By contrast, there is no evidence that
companies that incorporate the SDGs into business targets are less likely
to improve their environmental performance than those that do not by
implementing an EMCS.
Incorporation of the SDGs into business targets is significant and
positive in Models (3)–(7). This suggests that companies that incorpo­
rate the SDGs into business targets are more likely to improve their
environmental performance in terms of energy consumption, waste
produced, hazardous waste produced, water use, and pollution emis­
sions through means other than implementing EMCSs. However,
because the influence of environmental activities of incorporating SDGs
into business targets is already captured by its interaction term with
EMCSs, the influence of this incorporation may capture specific com­
pany characteristics relating to the SDGs rather than that of other
environmental sustainability activities.
These estimation results indicate that companies with EMCSs nor­
mally improve their environmental performance, and pressure from
final consumers and the government is a precondition for accomplishing
this. However, if these companies incorporate the SDGs into their
business targets, they can improve their environmental performance
somewhat further, and pressure from the government plays an impor­
tant role in this.
5. Discussion and conclusion
The purpose of this study was to address the criticism that corporate
environmental activities to meet the SDGs are simply greenwashing. To
this end, using data on Vietnamese companies, we empirically clarify
not only the influences of stakeholder pressure on a company’s EMCS
implementation and maintaining a proactive attitude toward the SDGs
but also the influence of EMCS implementation on environmental per­
formance with or without a proactive attitude. The main findings are as
follows.
First, companies facing strong pressure from final consumers and the
government are more likely to implement EMCSs. Thus, the stakeholders
with the most power over Vietnamese companies’ implementation of
11
Journal of Environmental Management 296 (2021) 113364
EMCS are final consumers and the government. This implies that they
regard implementing EMCSs (or several environmental activities in the
EMCS mechanism) as an effort to satisfy stakeholder interests in a
strategic and ethical manner, which is consistent with previous studies
of stakeholder management. On the one hand, EMCS implementation
depends on a cost–benefit relationship, whereby companies can increase
sales by showing consideration for the environment (Nishitani, 2011).
Thus, it is reasonable for companies as profit-making organizations to
adapt to final consumers’ interests. For example, final consumers may
put greater emphasis on a company’s sustainability activities and per­
formance to guide their purchase decisions (Wagner et al., 2009). Note
that the final consumers are not always Vietnamese domestic consumers
because the supply chain is globally dispersed, even if the primary
market of many companies is Vietnam. In this sense, an EMCS is
regarded as a tool of green supply-chain management (although dis­
cussion of this issue is beyond the scope of this study).
On the other hand, EMCS implementation is viewed as an activity to
gain legitimacy. Thus, companies can gain legitimacy for long-term
survival by satisfying final consumer and government interests (Had­
dock–Fraser and Tourelle, 2010). For example, if a company cannot
satisfy final consumers, they may face a boycott (Handelman and
Arnold, 1999). Moreover, not only business-to-consumer companies but
also business-to-business companies need to satisfy final consumers’
interests, because they will influence any company through the supply
chain. It is also possible that word-of-mouth reports from a final con­
sumer might have an impact on the support that others give to the target
company (Handelman and Arnold, 1999). Furthermore, the Vietnamese
government has promulgated multiple policies on the environment,
such as the National Target Program to Respond to Climate Change, and
our finding supports the view that these policies indeed encourage
companies to implement EMCSs. In this sense, legitimacy refers to
“popular approval of government and governors, or at least acceptance
of their right to rule; its effect is an increased likelihood of compliance
with governmental rules and regulations” (Levi and Sacks, 2009, p.
313). Otherwise, companies implement EMCSs to avoid future govern­
ment intervention (Carroll and Shabana, 2010).
In addition to pressure from final consumers and the government,
senior management commitment to environmental activities is essential
for companies to implement EMCSs (and incorporate the SDGs into their
business as well). Even if companies face strong pressure from final
consumers and the government, they may not implement EMCSs when
senior management has little interest in environmental issues.
Second, companies facing strong pressure from the government are
more likely to have a more proactive attitude toward the SDGs. This
suggests that the stakeholder with the most influence on the proactive
attitude toward the SDGs in Vietnamese companies is the government.
This can also be interpreted from the legitimacy perspective, and some
possible viewpoints strengthen this interpretation. This finding supports
the view that because the Vietnamese government has promulgated
several SDG policies such as the OSP, SEDS, and SDG NAP in addition to
the abovementioned environmental policies (see Section 3.1), these
policies encourage companies to take a proactive attitude toward the
SDGs (or incorporate the idea of the SDGs into their businesses). Another
view is that because the concept of the SDGs is relatively new, govern­
ment efforts may be initially required to spread them. This is consistent
with another finding from our study, namely that companies facing
strong pressure from employees are less likely to have a proactive atti­
tude toward the SDGs; this implies that because the SDGs are still little
known at the individual (employee) level in Vietnam, employees do not
have a strong interest in them in the first place.
Third, companies implementing EMCSs are more likely to improve
their environmental performance in terms of CO2 emissions, resource
efficiency, energy consumption, waste produced, hazardous waste pro­
duced, water use, and pollution emissions. That is, a company’s EMCS
improves its environmental performance as expected. These findings
provide a new contribution to the limited number of studies regarding
K. Nishitani et al.
the role of EMCSs as a more advanced and comprehensive approach to
improving environmental performance. Because final consumers and
the government are the most influential stakeholders in EMCSs, this
finding can also be interpreted to indicate that the stakeholder power of
final consumers and the government indirectly influences environ­
mental performance. Therefore, the interest of final consumers and the
government would ultimately be in a company’s environmental
performance.
Finally, if companies incorporate the SDGs into their business tar­
gets, they are more likely to improve their environmental performance,
at least in terms of resource efficiency and waste produced, than those
that do not by implementing EMCSs. Thus, corporate environmental
activities to meet the SDGs actually work better than existing activities
to achieve these goals in Vietnam. This limited additional influence
might (at a glance) result from using the 2017 data for the analy­
ses—that is, just the second year since the SDGs were launched—and
this may be too early for Vietnamese companies to have gained adequate
knowledge to put the SDGs into actual practice (van der Waal and
Thijssens, 2020; van Zanten and van Tulder, 2018). Although this issue
is a limitation of our study, the value of the finding remains valid for the
early years of the SDGs. Because final consumers and the government
are influential stakeholders in EMCSs, and the government influences
the incorporation of the SDGs into business targets, the stakeholder
power of the government is crucial in improving environmental per­
formance. Given that the Vietnamese government has promulgated
policies to achieve the SDGs, these policies will encourage companies to
implement environmental activities proactively. However, it does not
mean that the stakeholder power of government alone is sufficient; the
stakeholder power of final consumers (and senior management
commitment) also fundamentally influences environmental perfor­
mance through EMCS implementation. This supports the view that our
stakeholder theory approach is more appropriate to analyze a com­
pany’s sustainability (environmental) activities to meet the SDGs than
other approaches, such as the institutional theory and conventional
stakeholder theory approaches.
If a company’s environmental performance is determined only by the
cost–benefit relationship without policy restrictions, the level of envi­
ronmental performance will be limited. This means that if the cost of
further performance improvement exceeds the benefit, companies will
cease applying EMCSs even if the improvement is practically feasible
and socially expected. This is the limitation of EMCSs and performance
(in Vietnamese companies) based on the cost–benefit relationship,
especially when these companies are expected to conduct environmental
activities more proactively than ever to achieve the SDGs. Accordingly,
our findings indicate the possibility that the stakeholder power of gov­
ernment prevents companies making decisions based on the cost–benefit
relationship alone, which suggests that the stakeholder power of the
government plays a vital role in the environmental performance
improvement. Otherwise, this view can also be expressed in the state­
ment that decisions based on the cost–benefit relationship subject to the
SDG policies and environmental performance will be improved by the
new equilibrium point.
Our findings thus support the view that corporate sustainability
(environmental) activities to meet the SDGs (i.e., additional efforts to
exceed normal sustainability performance) are more effective than
existing activities in achieving these goals in Vietnam. Although we had
some concerns about the potential greenwashing of these activities, they
turned out to be unfounded, at least in the context of EMCS imple­
mentation in Vietnamese companies. With the proviso that pressure
from government plays a key role in this additional accomplishment, we
can refute the criticism that corporate environmental activities to meet
the SDGs are simply greenwashing, or SDG washing. Indeed, the Viet­
namese government as a more powerful stakeholder has adopted pol­
icies to achieve the SDGs that encourage companies to implement
environmental activities proactively.
In conclusion, the findings of this study provide some important
12
Journal of Environmental Management 296 (2021) 113364
policy implications for the SDGs, especially for developing countries
such as Vietnam. When seeking a balance between the environment and
the economy, a policy mix encouraging companies to take a voluntary
approach is usually preferable (Arimura et al., 2008). However, our
findings suggest that the voluntary approach alone is insufficient to
reach the level of environmental improvement required to achieve the
SDGs, and the SDG policies of the Vietnamese government compensate
for this insufficiency. Therefore, government intervention to provide
companies with motivation beyond economic incentives is also neces­
sary, at least in the current SDG context, although this is not to negate
the importance of the voluntary approach. Because this perspective is
not consistent with the conventional view that government intervention
to improve the environment is ineffective in Asian developing countries
(Agamuthu et al., 2007; Ngoc and Schnitzer, 2009), the SDGs as political
goals for which governments have primary responsibility could serve as
a trigger for the government to reorganize environmental policies more
effectively. This approach may be applicable to other (developing)
countries with similarities in culture, economy, and politics.
The study has some limitations that derive from the data collection
using a questionnaire survey, such as the use of subjective measures and
the potential of common method bias. Therefore, we cannot exclude the
possibility that a triadic positive relationship is influenced by the data
collection to some extent. Nevertheless, we believe that the use of a
questionnaire survey is an appropriate second-best solution in a situa­
tion in which it is very difficult to obtain objective company data,
especially for developing countries (Nishitani et al., 2017a). Another
limitation is that the SDG variable is measured by only one question in
the survey, which might lead to characterization of only partial features
of corporate SDG involvement. However, this bias is unlikely to be
strong in a context in which corporate SDG involvement is not mature.
Furthermore, although an EFA provides procedures for determining
an appropriate number of factors and the pattern of factor loadings
(Fabrigar et al., 1999), the factors to measure EMCSs obtained from the
EFA can intrinsically have multiple interpretations attributable to the
items forming factors (Marjanen et al., 2016). Therefore, we adopted
factors and interpret them following the accounting literature including
Kokubu et al. (2019), Latan et al. (2018), and Pondeville et al. (2013).
However, because there is no general agreement on how to measure
EMCS variables, there are also different variations and interpretations.
Other proposed constructs should be discussed more explicitly from the
perspective of the factor analysis, although this would be beyond the
scope of a single paper. We hope that future research will explore this
issue.
Thus, despite some limitations, we hope that our study will
encourage further research on corporate sustainability activities to
achieve the SDGs.
Credit author statement
Kimitaka Nishitani: Conceptualization, Formal analysis, Writing –
original draft, Funding acquisition, Thi Bich Hue Nguyen: Conceptual­
ization, Writing – original draft, Trong Quy Trinh: Writing – original
draft, Qi Wu: Formal analysis, Data curation, Writing – review & editing,
Katsuhiko Kokubu: Writing – review & editing, Supervision, Funding
acquisition
Declaration of competing interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper.
Acknowledgements
This paper forms part of the results of research supported by Grant-
in-Aids for Scientific Research (B) 19H01549 from the Japan Society for
K. Nishitani et al.
the Promotion of Science, Japan, and the Environment Research and
Technology Development Fund (JPMEERF16S11606) from the Envi­
ronmental Restoration and Conservation Agency, Japan.
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