IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v122y2014i3p405-424.html
   My bibliography  Save this article

Why Do Microfinance Institutions Go Green? An Exploratory Study

Author

Listed:
  • Marion Allet

    ()

Abstract

In recent years, in addition to financial and social objectives, the microfinance industry has started to look at its environmental bottom line. The objective of this paper is to identify why microfinance institutions (MFIs) decide to go green. Data was collected through a quantitative survey of 160 MFIs and qualitative semi-structured interviews of 23 MFIs’ top managers. Basing our analysis on the model of ecological responsiveness developed by Bansal and Roth (Acad Manag J 43(4):717–736, 2000 ), we discover that MFIs for which legitimation (stakeholder pressure) is the dominant driver tend to adopt a defensive approach and set up more superficial negative strategies to appear green. In contrast, MFIs for which social responsibility is the dominant driver tend to be more proactive and innovative and develop adapted financial and non-financial services to promote environmentally friendly practices. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Marion Allet, 2014. "Why Do Microfinance Institutions Go Green? An Exploratory Study," Journal of Business Ethics, Springer, vol. 122(3), pages 405-424, July.
    • Handle: RePEc:kap:jbuset:v:122:y:2014:i:3:p:405-424
    DOI: 10.1007/s10551-013-1767-2
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10551-013-1767-2
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marion Allet & Marek Hudon, 2015. "Green Microfinance: Characteristics of Microfinance Institutions Involved in Environmental Management," Journal of Business Ethics, Springer, vol. 126(3), pages 395-414, February.
    2. David Williamson & Gary Lynch-Wood & John Ramsay, 2006. "Drivers of Environmental Behaviour in Manufacturing SMEs and the Implications for CSR," Journal of Business Ethics, Springer, vol. 67(3), pages 317-330, September.
    3. Marion Allet, 2011. "Measuring the environmental performance of microfinance," Working Papers CEB 11-045, ULB -- Universite Libre de Bruxelles.
    4. Alessia D'amato & Nigel Roome, 2009. "Leadership of organizational change toward an integrated model of leadership for corporate responsibility and sustainable development: A process model of corporate responsibility beyond management inn," ULB Institutional Repository 2013/164611, ULB -- Universite Libre de Bruxelles.
    5. Stephen Fineman & Ken Clarke, 1996. "Green Stakeholders: Industry Interpretations And Response," Journal of Management Studies, Wiley Blackwell, vol. 33(6), pages 715-730, November.
    6. François Maon & Adam Lindgreen & Valérie Swaen, 2009. "Designing and Implementing Corporate Social Responsibility: An Integrative Framework Grounded in Theory and Practice," Journal of Business Ethics, Springer, vol. 87(1), pages 71-89, April.
    7. Evangeline Elijido-Ten, 2007. "Applying stakeholder theory to analyze corporate environmental performance: Evidence from Australian listed companies," Asian Review of Accounting, Emerald Group Publishing, vol. 15(2), pages 164-184, April.
    8. Herwig Peeters, 2003. "Sustainable Development and the Role of the Financial World," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 5(1), pages 197-230, March.
    9. Jessica Schicks, 2010. "Microfinance Over-Indebtedness: Understanding its drivers and challenging the common myths," Working Papers CEB 10-048, ULB -- Universite Libre de Bruxelles.
    10. Céspedes-Lorente, José & Burgos-Jiménez, Jerónimo de & Álvarez-Gil, Maria José, 2003. "Stakeholders' environmental influence. An empirical analysis in the Spanish hotel industry," Scandinavian Journal of Management, Elsevier, vol. 19(3), pages 333-358, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Davide Forcella & Marek Hudon, 2016. "Green Microfinance in Europe," Journal of Business Ethics, Springer, vol. 135(3), pages 445-459, May.
    2. Dorfleitner, Gregor & Priberny, Christopher & Röhe, Michaela, 2017. "Why do microfinance institutions fail socially? A global empirical examination," Finance Research Letters, Elsevier, vol. 22(C), pages 81-89.
    3. Sergio Manrique & Carmen-Pilar Martí-Ballester, 2017. "Analyzing the Effect of Corporate Environmental Performance on Corporate Financial Performance in Developed and Developing Countries," Sustainability, MDPI, Open Access Journal, vol. 9(11), pages 1-30, October.
    4. Marek Hudon & Marc Labie & Patrick Reichert, 2020. "What is a Fair Level of Profit for Social Enterprise? Insights from Microfinance," Journal of Business Ethics, Springer, vol. 162(3), pages 627-644, March.
    5. Francesca Bartolacci & Andrea Caputo & Michela Soverchia, 2020. "Sustainability and financial performance of small and medium sized enterprises: A bibliometric and systematic literature review," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1297-1309, March.
    6. Davide Forcella & Guja Lucheschi, 2016. "Microfinance and ecosystems conservation How green microfinance interacts with Socio- Ecological systems Lessons from Proyecto CAMBio in Nicaragua and Guatemala," Working Papers CEB 16-008, ULB -- Universite Libre de Bruxelles.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marion Allet & Marek Hudon, 2015. "Green Microfinance: Characteristics of Microfinance Institutions Involved in Environmental Management," Journal of Business Ethics, Springer, vol. 126(3), pages 395-414, February.
    2. Davide Forcella & Marek Hudon, 2016. "Green Microfinance in Europe," Journal of Business Ethics, Springer, vol. 135(3), pages 445-459, May.
    3. Rafael Moser & Davide Forcella & Lauro Emilio Gonzales Farias, 2016. "Microfinance and climate change: threats and opportunities, the case of Brazil’s largest rural MFIs, Agroamigo and Cresol," Working Papers CEB 16-010, ULB -- Universite Libre de Bruxelles.
    4. Martín-Tapia, Inmaculada & Aragón-Correa, J. Alberto & Rueda-Manzanares, Antonio, 2010. "Environmental strategy and exports in medium, small and micro-enterprises," Journal of World Business, Elsevier, vol. 45(3), pages 266-275, July.
    5. Bikki Jaggi & Alessandra Allini & Riccardo Macchioni & Annamaria Zampella, 2018. "Do investors find carbon information useful? Evidence from Italian firms," Review of Quantitative Finance and Accounting, Springer, vol. 50(4), pages 1031-1056, May.
    6. Simona Galletta & Sebastiano Mazzù & Valeria Naciti & Carlo Vermiglio, 2021. "Sustainable development and financial institutions: Do banks' environmental policies influence customer deposits?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 643-656, January.
    7. Leonidou, Leonidas C. & Leonidou, Constantinos N. & Fotiadis, Thomas A. & Zeriti, Athina, 2013. "Resources and capabilities as drivers of hotel environmental marketing strategy: Implications for competitive advantage and performance," Tourism Management, Elsevier, vol. 35(C), pages 94-110.
    8. Pepe, Cosetta & Musso, Fabio & Risso, Mario, 2009. "Retailers and SME suppliers social responsibility in international supply chains," MPRA Paper 31112, University Library of Munich, Germany.
    9. Laura Baselga-Pascual & Antonio Trujillo-Ponce & Emilia Vähämaa & Sami Vähämaa, 2018. "Ethical Reputation of Financial Institutions: Do Board Characteristics Matter?," Journal of Business Ethics, Springer, vol. 148(3), pages 489-510, March.
    10. Amornsak Kitthananan, 2009. "Creating Business and Social Value: the Asian Way to Integrate CSR into Business Strategies," Studies in Trade and Investment 68, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    11. Javier Martínez-del-Río & José Céspedes-Lorente, 2014. "Competitiveness and Legitimation: The Logic of Companies going Green in Geographical Clusters," Journal of Business Ethics, Springer, vol. 120(1), pages 131-146, March.
    12. Rosario Vázquez-Carrasco & M. López-Pérez, 2013. "Small & medium-sized enterprises and Corporate Social Responsibility: a systematic review of the literature," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(6), pages 3205-3218, October.
    13. Diane Sharratt & Bitten H. Brigham & Martin Brigham, 2007. "The Utility of Social Obligations in the UK Energy Industry," Journal of Management Studies, Wiley Blackwell, vol. 44(8), pages 1503-1522, December.
    14. Salina P. Siddique & Nick Sciulli, 2018. "Sustainable development of small companies: Investors' perspectives," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1258-1271, December.
    15. Maria Järlström & Essi Saru & Sinikka Vanhala, 2018. "Sustainable Human Resource Management with Salience of Stakeholders: A Top Management Perspective," Journal of Business Ethics, Springer, vol. 152(3), pages 703-724, October.
    16. Hannah Charlotte Joos, 2019. "Influences on managerial perceptions of stakeholder salience: two decades of research in review," Management Review Quarterly, Springer, vol. 69(1), pages 3-37, February.
    17. Prasanta Kumar Dey & Chrisovalantis Malesios & Debashree De & Soumyadeb Chowdhury & Fouad Ben Abdelaziz, 2019. "Could lean practices and process innovation enhance supply chain sustainability of small and medium‐sized enterprises?," Business Strategy and the Environment, Wiley Blackwell, vol. 28(4), pages 582-598, May.
    18. Block, Joern & Wagner, Marcus, 2014. "Ownership versus management effects on corporate social responsibility concerns in large family and founder firms," Journal of Family Business Strategy, Elsevier, vol. 5(4), pages 339-346.
    19. Muhamad Azrin Nazri & Nor Asiah Omar & Aini Aman & Abu Hanifah Ayob & Nur Ainna Ramli, 2020. "Corporate Social Responsibility and Business Performance in Takaful Agencies: The Moderating Role of Objective Environment," Sustainability, MDPI, Open Access Journal, vol. 12(20), pages 1-18, October.
    20. Lino Cinquini & Rosa Alba Miraglia & Riccardo Giannetti, 2016. "Editoriale. Strumenti di gestione dei costi e misure di performance negli attuali contesti competitivi," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2016(2), pages 5-14.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:122:y:2014:i:3:p:405-424. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Springer Nature Abstracting and Indexing). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.