Corporate Environmental Strategies in Transition Economies: Survey of the Literature

Twenty-five years ago, an unprecedented economic-political transition began in Central and Eastern Europe and the former Soviet Union. Since then, a meaningful literature has examined businesses’ environmental-management efforts during the transition. Over the same period as the transition, many firms in developed countries were integrating environmental components into their business strategies and finding this integration profitable. A growing body of research explores the topic of corporate environmental strategy. Given the rising importance of this topic in developed economies, its seems highly important to reassess the literature on businesses’ environmental-protection efforts during the transition in order to explore corporate environmental strategies in transition economies where the business benefits may be less clear and domestic consumer pressure for better corporate environmental stewardship is limited. Given the lack of clarity, exploration of corporate environmental strategies in transition economies is important. Guided by a simple conceptual framework, this article reviews and assesses the full body of the empirical literature in order to explore the drivers behind corporate environmental strategies in transition economies. The discussion that follows considers a broad array of drivers: internal factors, market pressures, government, and civil society. The empirical evidence suggests a positive role for foreign ownership and foreign customer pressure, and a stronger role for governmental factors: capacity to monitor, greater enforcement, permit issuance, and higher emission charge rates. The review reveals that many key factors, such as investor pressure, domestic customer pressure, and corporate culture, are weakly explored, if not fully ignored, by empirical studies.