Are family firms green?

This study examines environmental management practices of 1690 family and nonfamily firms from 29 countries and 19 industrial sectors over an 8-year period. We show that the family effect on firm environmental management practices ranges substantially, from extremely negative to no effect at all. Moreover, the magnitude of the effect depends on the type of firm, the industrial context, the type of economy, and the stages of the business cycle. This study offers a novel understanding of the extreme heterogeneity of environmental management practices of family businesses and serves as a springboard for future research aiming to better understand the environmental strategies of publicly traded firms with concentrated ownership structures. It also provides important and novel evidence for policymakers, investors, and business owners, particularly for firms with different ownership and management structures. Environmental management practices have been playing an increasingly prominent role in business strategy. However, in facing climate change and global warming, family firms, with their idiosyncratic characteristics, may react in unique ways. We have conducted an international study of 1690 family and nonfamily firms from 2007 to 2014 and found that environmental management practices vary substantially across different types of family firms, which tend to be over-represented among groups with both the poorest and most superior outcomes. We argue that family firm managers and consultants should consider strengthening the environmental pillar of strategy to keep up with competitors and become "green champions." Moreover, regulators should consider family governance tendencies in establishing more stringent environmental policies and regulations, particularly in low-income countries and problematic concentrated industries. Investors too must pay attention to firm ownership and ownership structure in evaluating environmentally related business opportunities.