A Review of Driving Factors Contributed to Firm’s Environmental Management

Since the 21st century, severe climate change and environmental protection storms have swept across all fields of global politics and economy, and governments and enterprises are inevitably involved. Faced with massive pollutant emissions and increasing global warming, governments around the world have introduced increasingly stringent environmental protection measures and are working together to find new solutions to protect the environment and mitigate climate change. In this process, enterprises also play an important role, because currently 80% of environmental pollution is considered to come from the production and operation activities of enterprises. Fortunately, more and more companies have realized the importance of environmental issues, and they incorporate more demands for environmental protection from society into their operations, striving to establish their green image. With the rise of green consumption and the change of the focus of corporate value evaluation, undertaking environmental responsibility has become an inevitable requirement for sustainable development of enterprises. Therefore, identifying the driving factors and their mechanisms of action that affect corporate environmental behavior is of great significance for further helping companies improve environmental management in the future, and it can also provide a reference for the implementation of subsequent environmental regulations. In previous research, there have been lots of empirical studies testing the factors that drive the motivations of firms to improve their environmental management. Generally, it can be divided into external factors and internal factors, of which regulation, market, and community are usually summarized as the most important sources of external factors, while enterprise characteristics are the source of internal factors. The literature review is organized by respectively introducing regulation, market, community, and corporate characteristics first, then displays several China’s environmental policy instruments and their evaluations.