Environment/decisionmaking/final report

Understanding Organizational Decision Making Related to Environmental Performance

Final report : June 20, 2014

Presented to:

Government of Alberta

Environment and Sustainable Resource Development

Presented by:

Advanis Inc.

UNDERSTANDING ORGANIZATIONAL DECISION MAKING RELATED TO ENVIRONMENTAL PERFORMANCE

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3

Executive summary

Designed to understand “What factors influence environmental performances among regulated facilities

in Alberta?” this research relied on a sequence of phases :

an initial documentation and literature review;

a first series of interviews with managers at facilities , to identify explicit factors;

a quantitative validation of explicit factors by managers at facilities (N=264);

a second series of interviews to precise the factors’ implicit dimensions;

a quantitative validation of managers’ perceptions at facilities (N=130).

Our results rank regulation as the most important driver of environmental improvement at facilities and

provide a quantitative measure of its relative importance compared with the other significant factors

described by responders of our survey.

Our results also show there may be potential beneficial actions complementary to regulation, and open

avenues of research for environmental performance improvement and for policy design.

Indicators of environmental

performance

FACTOR

Investor pressure

(Q10A-Q10B-Q10C)

FACTOR

Management

value and

involvement

(Q10D-Q10E-Q10F-

Q10G-Q10H)

FACTOR

Impact on

profitability(Q17A-Q17B-Q17C-

Q17D-Q17E-Q17F-Q17H)

FACTOR

Corporate image(Q10J-Q12I-Q10I-Q12A-

Q12B-Q12C-Q12F)

Facilities practices(Q19A-Q19B-Q19C-Q19D-Q19E-Q19F-

Q19G)

Facilities standards(Q21A-Q21B-Q21C-Q21D)

FACTOR

The regulation(Q12D-Q12E-Q12H)

FACTOR

Competitors

improvements

(Q10K-Q12G)

FACTOR

Difficulties complying with regulation(Q17G-Q17I)

FACTOR

Barriers to

improvement(impact on profitability and

difficulties complying with

regulation )

Perception of compliance (Q23H)

-

+

+

+

-

+

+

?

?

Relations between factors that influences environmental performance and the

indicators of environmental performance


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This research indicates that environmental performance at facilities interplays with a number of

organizational and social factors . Innovative mechanisms for policy making can already be conceived by

taking into account explicit and implicit factors for environmental improvement.

Thus, Understanding Organizational Decision Making Related to Environmental Performance will allow

Alberta ESRD to use new knowledge and understanding that can support options that seek higher levels

of performance, as part of the focused effort of the Government of Alberta to move forward in

establishing priority initiatives pertinent to the environment.


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Table of contents

Introduction ............................................................................................................................................ 6

Research outline .................................................................................................................................. 7

Phase 1 – Document review.................................................................................................................. 10

1.1 Factors that influence environmental performance at facilities ................................................ 10

1.2 Literature review...................................................................................................................... 10

1.3 Factors for qualitative data collection....................................................................................... 16

Phase 2 – Semi-structured interviews ................................................................................................... 20

2.1 Phase 2 Research in Context..................................................................................................... 20

2.2 Phase 2 research results........................................................................................................... 21

Phase 3 – Online Survey........................................................................................................................ 25

3.1 Introduction ............................................................................................................................. 25

3.2 Data collection methodology and questionnaire ...................................................................... 25

3.3 Building a model of indicators of environmental performance and factors ............................... 26

3.4 Results ..................................................................................................................................... 30

3.5 Results and development of the final statistical model of analysis ............................................ 35

3.6 Summary of Key Findings ......................................................................................................... 41

Phase 4 – In-depth Qualitative Interviews ............................................................................................ 42

4.1 Interview grid design (Phase 4)................................................................................................. 42

4.2 Results ..................................................................................................................................... 43

Phase 5 – V alidation .............................................................................................................................. 49

5.1 Links with scientific literature................................................................................................... 49

5.2 Questionnaire and Data collection ........................................................................................... 50

5.3 Results ..................................................................................................................................... 51

Conclusion ............................................................................................................................................ 53

Bibliography.......................................................................................................................................... 55

Appendices ........................................................................................................................................... 58

Appendix 1: Recruiting and Interview grids of Phase 2 ....................................................................... 58

Appendix 2: Questionnaire Phase 3.................................................................................................... 61

Appendix 3: Interview grids of Phase 4............................................................................................... 86

Appendix 4: Questionnaire Phase 5.................................................................................................... 88


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Introduction

The Government of Alberta’s strategic decisions, meant to position Alberta for the future, have led to a

focused effort to move forward in establishing priority initiatives for the environment. An integrated

resource management system is being developed to achieve the environmental, economic, and social

outcomes Albertans expect from resource development and to maintain the social licence to develop

resources.

The implementation of the Cumulative Effects Management System (CEMS) will allow the Ministry of

Environment and Sustainable Resource (ESRD) to account for the combined effects of past, present, and

foreseeable human activities and to manage activities that impact the environment, economy, and

society. It reflects the Government of Alberta’s move toward a more integrated approach to managing

natural resources in the province. It implies that outcomes are meant to be measured and evaluated

continuously and that management actions can be applied throughout the system1. Locally, the

development and implementation of regional plans, as identified by the Land-use Framework, will

enable the management of the province’s land and natural resources to achieve Alberta’s long -term

economic, environmental, and social goals.

In order for ESRD to develop new knowledge and understanding that can support options that seek

higher levels of performance and to achieve the goals of continuous improvement and environmental

excellence within an enhanced regulatory system, it is necessary to understand which factors are

influencing environmental performance beyond compliance decisions in the Alberta context and the

degree to which they enable or constrain environmental performance.

Understanding Organizational Decision Making Related to Environmental Performance aims at better

understanding the various factors that influence environmental performance decision making —relevant

to regulated facilities in Alberta —and the variation in environmental performance objectives.

This mixed-method research aims to identify the explicit (clearly expressed) and implicit (implied but not

directly expressed) factors influencing environmental performance beyond compliance at a facility level

with the aim of supporting future policy development and program design on environmental

performance and excellence. In a sequence of five research phases occuring from November 2013 to

June 2014, the research project addressed the following question:

“What factors influence environmental per formances among regulated facilities in Alberta?”

1 Alberta's Environmental Prote ction a nd Enhanceme nt Act (EPEA ) and a ccompanying regulations set out in detail which activities require

approvals and the process for obtaining the m.


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Research outline

Phase 1 o f the research started in November 2013. This phase consisted of a review of the following:

Academic literature;

Existing documents developed by ESRD to guide this research (i.e. preliminary scoping document,

literature review, and conceptual framework; results from internal focus groups);

Other relevant information regarding the regulatory framework in Alberta . The focus was on the

establishment of the research context:

Developing an understanding of the re gulatory framework;

Defining criteria of performance beyond compliance (facility level);

Determining factors influencing environmental practices and processes;

Determining relevant measures for each explicit factor influencing compliance or performance

beyond compliance.

This helped develop an interview grid for the following phase of semi -structured interviews.

Phase 2 o f the research consisted of a series of preliminary semi-structured qualitative interviews to

explore the variations in practices and processes. These interviews were conducted with managers at

facilities identified in the ESRD sample.

The interviews aim to validate the relevance of explicit factors within the Alberta context and refine

explicit factors with emergent data in order to account for variations of practices and processes

regarding compliance or performance beyond compliance.The results helped formulate questions

intended to achieve the following objectives :

Detail the profile of facilities taking part in the research;

Measure each identified factor;

Measure indicators of environmental performance beyond compliance.

Phase 3 included a quantitative description (web survey) of actual environmental practices and

processes for the population under study2 and the explicit factors contributing to those practices and

processes at industrial facilities. The phase included the following:

Telephone invitation;

Web survey;

Telephone follow up of non -responders.

The survey results helped establish the following:

A description of the organization’s profile (facilities’ main characteristics);

The data to analyse the influence of explicit factors on the indicators of environmental performance

beyond compliance;

2 Th e population of approximately 680 facilit ies gen erated answers from 264 participat ing respondents at facility level . The

detai l of the s ample and results is presented in sect ion 3 .


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The indicator data to support the identification/qualification of environmental performance beyond

compliance.

Phase 4 explored in depth the implicit factors influencing environmental performance decisions, as

described by responders of the Phase 3 survey. Participants were contacted as a follow-up of semi-

structured interviews. Qualitative data was collected and analysed to investigate how and why those

factors influenced environmental performance beyond compliance. This phase included the following:

In-depth interviews;

Identification ofthe implicit factors influencing environmental performance beyond compliance;

Understanding of the dynamic interplay of explicit and implicit factors contributing to decision

making regarding environmental performance beyond compliance;

Identification of factors to explore further in Phase 5.

Phase 5 confirmed explicit and implicit factors that emerged from the preceding phases, with a short

follow-up web survey 3 that was circulated to facility representatives who had participated in the initial

quantitative survey. Respondents were presented with the factors identified in Phase 3. This final phase

also included the following:

A final qualitative validation comparing interplay of identified factors with existing theoretical

models;

A presentation of the research findings.

Advani s Research Team:

Nicolas Toutant: Project manager

Thomas Foulquier: Methodology and qualitative research expert

Adriana Bernardino: Quantitative expert

Diane Holland: Research manager

Mélanie Drisdelle: Programmer and analyst

Johann Walter: Copy editor

3 Note that 130 respresentatives of fa cilities responded out of 221.


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Research Outline

Question: “What factors influence environmental performances among regulated facilities in Alberta?”

Setting Research Context

Exploratory Analysis

Quantitative Model

Validation

Final Validation

Model Fine-

Tuning

Document and literature review

Identify factors that could potentially

inf luence behavior

3 weeks 3 weeks 3 months 1 month 1 month

Probing factors identif ied in stage 1

and identifying new factors

Theoretical model to be tested through a

quantitative approach

Validation of theoretical model through

quantitative data analysis

Validated model and

additional questions for clarif ication

In- depth investigation of main

factors

Enriched and dynamic

understanding of most important

factors

Validation of new dimensions of

interplaying factors

Factors validated and

linked to scientif ic literature

Approach

Outcome


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Phase 1 – Document review

1.1 Factors that influence environmental performance at facilities

In order for ESRD to develop new knowledge that can support options to achieve higher levels of

performance and to reach the goals of continuous improvement and environmental excellence within

an enhanced regulatory system, it was necessary to understand which factors were influencing

environmental performance decisions in the Alberta context and the degree to which they enable d or

constrained environmental performance. This will help improve a regulatory system that responds to

realities that drive environmental performance.

To better understand the various factors that influence environmental performance decision making at

regulated facilities and the variation in environmental performance behaviours that exist, we first

established the research context by reviewing the existing documents produced by the ESRD Project

Team4. When distinguishing between “compliance” and “performance,” (performance beyond

compliance) the research team considered that performance should mean that which is above minimum

standards (compliance).

Secondly, we reviewed literature to identify some of the explicit and implicit factors influencing

environmental performance beyond compliance at a facility level. Explicit factors, for instance , may

include the size of the organization and can be described quantitatively, while values held by managers

are likely to be implied but not directly expressed (implicit factors, to be described in the qualitative

phase of research).

In order to design the interview grid used for the following phase of semi-structured interviews—with

relevant indicators for each explicit factor influencing compliance or performance beyond compliance—

we expanded the information provided by ESRD 5 with a review of recent academic literature on the

subject matter.

1.2 Literature review

In examining what motivates or influences environmental performance, the academic literature

identified a range of external and internal factors that may interact to varying degrees to shape

environmental processes and outcomes of a firm or facility.

We studied the Literature Review and Conceptual Framework provided by ESRD, the factors identified

through ESRD Internal Focus Group Sessions, and additional relevant literature. This helped identify

external and internal factors that play a role in influencing environmental performance at the facility

4i.e. the Land-Use Framework and the Cumulative E ffe cts Manage ment Syste m, scopi ng document, including the research i ntent, proj ect scope,

data consi derations, considerations for the research methodology, which were provided at the beginning of the proje ct. We als o reviewed a number of internal docume nts later provided by ESRD, includi ng the internal ESRD focus group sessions summary. 5 Literature Review and Conceptual Framework , and the Internal ESRD Focus Group Sessi ons Summary .


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level. Finally, we integrated our findings from the literature review into the framework proposed by the

Oregon Business Decisions for Environmental Performance instrument (Wu, 2009).

1.2.1 Factors appearing in the scientific literature

The Standard Economic Theory characterizes organizations as profit-driven rational actors . This

predominant belief is a foundational argument for regulatory deterrence (Khanna 2001; Gunningham et

al. 2005). According to this view, regulators prosecute violators for non-compliance and remind all

regulated parties that these violations come at a high cost .

However, research indicates that other motivating factors may be at play. For instance, as firms go

beyond compliance in their environmental performance (Wu 2009), their behavior challenges Standard

Economic Theory. The relative frequency with which firms have chosen to do so has led to research into

what drives firms to perform beyond regulatory expectations.

To better understand the factors that may influence the environmental performances of facilities, our

research approaches the scientific literature with a broader view of organization. Organizational

outcomes and decision making have indeed long puzzled organization researchers, as these questions

find their roots in the great debates of social science and humanities .

In a landmark contribution to organizational science, Allison's Essenc e of Decision (1971) considered

three levels of analysis (“Rational Actor” Model, “Organizational Process” Model, and “Governmental

Politics” Model) in his attempt to understand the factors at play in a complex decision-making process

and outcome.

The interaction between corporate environment, cultural factors, and managerial sensemaking to

explain the Challenger Launch Decision was investigated by Vaughan (1996). Her work also gives

evidence of the need to take into account in organizational analysis, beyond organizational

characteristics, and existing factors at individual and corporate culture levels. Vaughan’s approach6 is

especially useful to understand situations resulting from decisions retrospectively appearing as negative

organizational outcomes. Such decisions are linked to a decision-making process she labels as

“organizational deviance .”

Taking an even closer look at the decision-making process and experience, Tsoukas and Chia (2002)

propose to consider the organization as emergent, constantly recreated in every situation by its actors.

6 “When re gulatory failure occurs in the monitoring o f an organi zation that deals in high -risk technology, the resulting accident may be thought

of as an organizational-technical system accide nt: a potentially avoidable technical system acci dent resulting from the failure of the technica l

components o f the product, the organization responsible for its production and use, and the regulatory organizations designe d to oversee the

entire operation. The failures of the producer and regulatory organizations are failures o f foresight, arising from organi zat ional patterns that block proble m identification and correction in the pre-accident incubation period. Such an accide nt cannot be explai ned by the failure of the

technical system alone. The organization malfunctions, failing to correct a correctable technical proble m. T he regul atory organization charge d with surveillance of the technical product and the organization' s per formance fails to resolve the problems in both. T he resu lt is an

organizational-te chni cal system acci dent, perhaps of catastrophic pr oportion. ” (Vaughan, 1990 )


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In light of these contributions, we pursued a pragmatic approach to the research question: “What

factors influence environmental performances among regulated facilities in Alberta?”

In other words, how an organization ranks environmental issues and the factors that influence

organizational behavior shape its environmental management style . At the same time, practically, it is

members of a firm or facility that will interpret external pressures, frame a problem, make decisions,

and implement solutions.

We present here a series of recent reviews and case studies that list factors playing a role in

environmental decision making regarding organizational compliance and performance beyond

compliance. The outcomes are observed at the facility level.

A review by González-Benito and González-Benito (2010) of the determinant factors of stakeholder

environmental pressure as perceived by industrial companies shows that company features (e.g. size,

internationalization, closeness to consumers in the value chain, man agerial attitude and motivations,

and strategic attitude) have an impact on the perception of stakeholder environmental pressure. Also,

primary (e.g. market and regulator) and secondary (e.g. media, NGOs) stakeholders , as well as external

factors (e.g. geographical location, industrial sector) play a role.

Gray and Shimshack (2011) review the empirical evidence on the impacts of environmental monitoring

and enforcement on subsequent pollution discharges and compliance behavior. They find

environmental monitoring and enforcement activities generate “substantial specific deterrence” —that

is, targeted facilities increase compliance and reduce emissions for several periods following regulator

actions. Also, environmental monitoring and enforcement generates “substantial general deterrence”—

monitoring and enforcement activity spill over to increase compliance and reduce emissions at other

facilities in the regulatory jurisdiction. Thirdly, monitoring and enforcement not only improve

compliance but also encourage greater pollution reductions at plants already in compliance.

Walls et al (2011) apply an inductive approach to develop a measure for environmental strategy and

identify six main capabilities of firms to build such a strategy. Access to two types of networks matters

for corporate environmental strategy, including supply chain network , reflecting the company’s

engagement with suppliers and buyers, and other stakeholder networks, such as the association with

governments, NGOs, industry associations, communities, employees, socially responsible investors, and

voluntary programs. A firm’s history of having an environmental strategy makes it more likely to

consider the environmental impact of new strategies, products , and processes.

Endowments, seen as a combination of the amount of money a firm invests in environmental research

and development and in supporting structures such as an environmental management system or an ISO -

14001-certified environmental process, also play a part in environmental strategy. Visionary leadership

can be measured in terms of the length of the environmental vision (i.e. short or long term goals have

been set) and the depth of the vision across the organization (i.e. global or not). The environmental skills

of top management are assessed by whether the environmental manager is on the executive team and

by the reporting level of the environmental manager. Finally, human resources skills for an

environmental strategy, can be measured if the strategy includes a formal environmental training

program and environmental reporting of the organization.


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Holstein and Gren (2013) analyze violations of environmental regulations in Sweden. As economic

motives, environmental attitudes, and social capital factors are intertwined, traditional enforcement

instruments (e.g. monitoring and inspecting firms) are found to deter violation in all firms in all

categories. However, larger firms seem to be more responsive to environmental attitudes and have an

abundance of social capital than smaller ones.

Finger (2011), analyzing data from 2,963 plants owned by 1,867 firms , finds that firms belonging and

participating in the self-regulated Corporate Social Responsibility initiative, whose members commit to

adhere to codes of conduct, show a reduced number of accidents. Frondel et al (2008), analyzing

empirical evidence from Germany, show that innovation behavior seems to be co rrelated to the

stringency of environmental policy. Environmental innovation activities seem not to be associated with

environmental management systems implementation, nor any other single policy instrument.

A case study by Gunningham (2009) investigates in depth the limits of management-based regulation

and sheds light on a number of factors at the individual level that can influence aggregated behavior at

facility and firm levels. Economic factors are classically identified, including cost of safety meas ures to

workers and to their company (work load, time, etc.).

Interestingly, geographic isolation and facility operations that are distanced from management might

seem to lead to operational autonomy of workers and derogative behaviour of lower management.

Also, there are indications that low turnover of workers and high turnover of management at isolated

facilities might lead to derogative behavior.

On the other hand, safety managers’ technical and management abilities, demonstrated dedication to

safety by management, and attention given by management to workers concerns when expressed

appear to be key drivers to compliance. Also, cultural dimension s play a role at each facility. Past

incidents at facilities, depending whether they were detrimental to t he company (e.g. resulted in

financial losses) or the workforce (e.g. casualties), are framed and interpreted differently by workforce

and management (resulting in a social struggle), which will have a complex effect on compliance.

Finally, workers ’ cultural factors are expressed, with a perceived irrelevance to work of safety measures,

a lack of consideration by workers for control tools symbolically estranged/foreign to their daily

activities (paper world vs practice), and a perception of social vulnera bility that might lead to the

attribution of value to a behavior of gaming that symbolic system (derogation).

In a meta-study analysis of a pool of 23 studies connecting environmental performance to

environmental management systems, Nawrocka and Parker (2009) detail how the definition of

performance varied across studies, as quantitative methods looked at emissions while qualitative were

more directed towards general perceptions of the issues that were of importance to a company. It

seems the effects of EMS (Environmental management systems) are not general but dependent on

other factors, such as the management style and goals of the particular company, its operating

environment, culture, and stakeholders.

Delmas and Toffel (2011) also consider how firms adopt heterogeneous sets of environmental

management practices despite facing common institutional pressures, because organizational

characteristics lead managers to interpret these pressures differently.


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In a study of the manufacturing sector in six countries (including Canada and the USA), Darnall et al.

(2010) show the relationship between stakeholder pressures and environmental strategy tends to vary

with firm size.

While there is a positive relationship between stakeholder pressures and the adoption of proactive

environmental practices, larger firms undertake more environmental practices than do smaller firms,

but smaller firms appear more responsive when faced with pressures from value chain, internal, and

regulatory stakeholders. A summary of the factors that play a role in environmental decision making

regarding environmental compliance and performance beyond compliance is provided in the following

tables.

Table 1

Relationship between the Firm and the Facility

Releva nt factors at the f irm a nd facility levels include the following:

o Number of fa cilities per f irm (Da rnell 2009), f irm’s organizationa l s tructure.

o In their model of institutional pressures moderated by parent company and plant cha racteris tics, Delmas

and Toffe l (2004) identify factors a t f irm and fa cility levels:

Firm size, competitive position, level of interna tionalization.

Plant size, sources of information on environmenta l ma nagement pra ctices ( industry associa tions. etc.), his torical environmental performance a t fa cility (reg ula tory complia nce,

pollution levels re lative to neig hbors and competitors ).

External pressures influencing environmental performance decisions at firm and facility levels come

from government and regulators, stakeholders, investors, competitors, consumers, and the public.

Table 2

External Factors that Influence Environmental Performance

1. Government / Reg ulatory Pressure Government and reg ula tory pressure has an obvious role in influencing environmental performa nce at or below

complia nce levels.

Government policies and regulations, frequent inspections, and compliance action (Henriques and Sa dorsky, 1996; Gunning ham e t al, 2005).

Prosecution of serious v iola tors (Thornton et al, 2005; Wu 2009; Delmas a nd Toffel, 2010).

Government education and extension progra ms or investments in research and development (Delma s and Toffe l 2004).

2. Public / Community Pressure

Loca l communities, environmental non-g overnment organizations, and the media may all exert pressure on a firm

to a dopt new environmental performa nce practices a nd move beyond complia nce.

Regulatory pressure throug h citizen lawsuits or political action (Gunning ham et al, 2004; Delma s

and Toffe l 2004).

Levels in trust and shared values for environmental protection (Sha rma a nd Vredenburg 1998).

Positive intera ctions with the public and local community (Gunningham 2004; Sha rma a nd Vredenburg 1997; Henriques and Sardorsky 1998).

Firm in a resource industry or with a his tory of public pressure (Gunningha m e t al, 2005).

Cha racteristics of the local community (e.g. population dens ity, educa tion, socio-economic conditions, a nd politica l involvement) (Delmas a nd Toffel 2004).


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3. Shareholder / I nvestor Pressure

Investors and sha reholders can be highly inf luential in determining the environmenta l performance of a f irm, though the litera ture offers oppos ing v iews on this.

Publicly tra ded companies (Sharma and Vredenburg, 1998; Wu, 2009; Hendriques and Sadorsky, 1996, Delmas and Toffe l, 2010).

Stock market performance (Henri and Journeault 2007).

Adoption of highly visible environmental practices (Kha nna a nd Speir 2007).

4. Customer / Consumer Pressure

The green consumer theory postula tes that a firm’s environmental decisions are re lated to customer a nd consumer pressures.

Consumers willing to pay more for green products a nd services (Khanna 2001; Wu 2009).

Economic sector may have influence over performance decisions (Delmas and Toffel, 2004;

Henriques and Sadorsky, 1996).

5. Competitor / Industry Pressure

Competitive or industry pressure refers to pressures occurring across industries and/or within a specif ic industrial sector.

Participa tion in trade associa tions (Gunning ham e t al, 2005).

Firms in competitive ma rkets (Da rnall 2009; Delmas a nd Toffe l 2010).

Firms seeking to differentiate themselves in their sector (Kha nna 2001; Delmas and Toffel 2004).

Competitive pressure may encourage v isible forms of g reenness (Khanna a nd Speir, 2007).

External pressures alone do not account for the variation amongst firms who face similar external

pressures. Coglianese and Nash (2006) assert that the variance can be accounted for, in part, in how

internal factors influence the interpretation and response to external pressures.

Table 3

Internal Factors

1. Historica l env ironmental performance, competitiveness of firm, and the organizational structure of the

facility, (Delmas, 2004; Coglianese and Nash, 2006; Howar d-Grenv ille et al, 2008).

2. Firm and facility s ize: “tota l sa les”, number of employees (Henri and Jour neault 2008).

3. Ownership

The na ture of firm ownership ca n be a fa ctor in environmental performa nce. Impa ct on the disclosure of environmental performa nce informa tion (Henri and Journeault 2008).

Budgets for environmental R&D, quality ma nagement systems (Darnall 2009).

4. Organizational Character istics

Organiza tiona l cha racteristics a re factors involved in determining the perception of externa l pressures, with

internal fa ctors playing a stronger role in the behavior of la rge f irms than in sma ll- or medium-sized enterprises.

(Howard-Grenville e t al, 2008; Coglianese and Nash 2006; Gunningham et al, 2004; Delmas a nd Toffel 2004).

5. Functional Departments Functional depa rtments within a firm may impact facility - level environmenta l performa nce (Delmas and Toffe l,

2008) and intervene in the interpretation of externa l pressures from non-ma rket constituents.

6. Industry Reputation and Competitiveness

The nature of the industry and its reputa tion can impa ct the expecta tions and the ability of a firm to demonstrate

environmental performa nce (Delmas and Toffe l 2010). The nature and extent to which firms implement specific environmental policies and adopt environmental actions may be dependent on the industry cha racteristics

(Ramus and M ontie l 2005; Kha nna a nd Speir 2007).

7. Manageria l Attitudes (Cog lianese, 2001; Khanna and Speir, 2007; Wu, 2009) and actions shape corporate envir onmental performance.


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1.3 Factors f or qualitative data collection

1.3.1 Factors to test in the first qualitative phase

We elaborated on the framework proposed by the Oregon Business Decisions for Environmental

Performance instrument (Wu, 2009) to capture the factors and indicators, identified in the literature.

The resulting table (Table 4) was used to support the subsequent phases of this research


17

Table 4: “What factors influence environmental performances among regulated facilities in Alberta?”

Interview

themes

Factors in literature (to be validated by interviewees)

ⓒ - compliance

ⓟ - performance

ESRD Focus groups insight Interview grid questions Indicators

(Indicators)

Wu

(2009)

Section I.

Facility

Environmental

Management

ⓟ level of concern for environment at facility

ⓟ awareness of government education programs (Delmas

and Toffel 2004)

ⓟ attention given by management to workers concern

(Gunningham, 2009)

To what extent are environmental issues a consideration in day to day

business decisions at your facility?

Are you aware of government training programs in environment?

Is it the same for top management, middle management and operations?

Knowledge of government education

programs (y/n)

Detection/Collection of employees

concerns : process implemented (y/n)

ⓒ external factors influencing environmental

management (Customers, public, environmental interest

groups)

ⓒ abundance of social capital in the community (Holstein

& Gren, 2013)

Public and Community

Pressure

Customer and Consumer

Pressure

What comes to your mind when you think about the community around your

facility?

When it comes to environmental issues, how would you describe the influence

of environment stakeholders external to the facility?

How would you describe the perception of your facility by the local

community?

Social environment reporting : process in

place (y/n)

Facility involved in community

development initiatives (y/n)

ⓒ internal factors influencing environmental management

(strategic positioning towards investors, lenders,

government, competition)

ⓒ company features (size, internationalization, closeness

to consumers in the value chain, managerial attitude and

motivations, strategic attitude) - González-Benito &

González-Benito (2010)

ⓒ number of facilities per firm (Darnell 2009)

ⓒ environmental attitude of functional departments

within firm (Delmas and Toffel, 2008), ⓟ budgets for

environmental R&D (Darnall 2009)

Industry Competition Does competition in the industry impact environmental practices? How?

How would you describe the facility’s operations, in terms of possible impact

to the environment?

How differently are environmental issues perceived by departments at your

facility?

Strategic scanning of environmental

regulations (y/n)

Environmental benchmarking process

(y/n)

Internal environmental reporting (y/n)

Environmental R&D in firm (y/n)

ⓒ annual revenue spent on environmental management In terms of resources (financial, human, etc.) spent on the environment, have

they increased, decreased or remained the same in the past few years, at your

facility?

Increase (y/n)

ⓒⓟ facility's upper management' involvement and

attitude regarding environmental concerns (Coglianese,

2001; Khanna and Speir, 2007).

Managerial attitudes How supporting is upper management of environmental initiatives, at your

facility?

Corporate communication regarding

environmental performance in last 30

days (y/n)

ⓒ barriers to increasing the environmental friendliness of

processes, products, and/or services

What are the challenges to adopting green practices when designing new

processes, products, and/or services?

Environment of facility a factor when

deciding new

products/services/processes (y/n)

ⓒ sources of information on environmental management

practices , historical environmental performance at facility

(Delmas and Toffel, 2004)

Where do you find information regarding environmental matters relevant to

your operational activities?

Knowledge of ESRD/EMS reporting tools

(y/n)

Section II.

Facility

Environmental

Practices

ⓒ employee involvement in environmental management

ⓒ social vulnerability of workforce (Gunningham, 2009)

Do you think there are core values shared by people at your facility? Environment issues considered a shared

responsibility within facility (y/n)


18

ⓒ level of responsibility for environmental decisions

ⓒ awareness of prosecution of serious violations

(Thornton et al, 2005)

ⓒ frequent inspections (Henriques et al, 1996)

Government and Regulatory

Factors

Would you say following ESRD requirements and guidance is a constant

challenge in your business, or that there are only a few operational situations

that get out of control?

In your opinion, does meeting ESRD requirements and guidance require more

actions of the managerial level, or the operational level?

Frequency of incidents reported

Operational vs managerial level

described as responsible for non-

compliance

ⓟ environmentally friendly practices Awards and Recognition In your experience at your facility, the management’s strategy is to comply

with current government environmental regulations, or to voluntarily

anticipate future environmental regulations?

Why?

Voluntary programs participation (y/n)

ⓟ voluntary programs participation of facility

ⓒ history of past social struggle at facility (strikes, lockouts)

- (Gunningham, 2009)

How would you describe the work climate at your facility? Fractured work culture at facility (y/n)

ⓒ citizen lawsuits, or political action (Gunningham et al,

2004; Delmas and Toffel 2004)

Has there been any community reaction to the environmental impact of the

facility in the past?

Experience of community reaction to

environmental impact of facility (y/n)

ⓒ perceived level of compliance with regulatory standards

ⓟ visible forms of greenness (Khanna and Speir, 2007)

What best represents for you the level of environmental performance of your

facility?

Description of activities beyond

compliance requirements (y/n)

Section III.

Facility

Environmental

Performance

ⓒ awareness of monitoring and enforcement activities at

other facilities (Gray& Shimshack, 2011)

Are you aware of any ESRD monitoring and enforcement activities at other

facilities in region?

Knowledge of monitoring and

enforcement activities at other facilities

in region (y/n)

ⓒ environmental outcomes

Profit Motivated Economic

Rational Actors

Would you agree that economic factors explain all environmental

performance decisions? What else could motivate environmental

performance at your facility?

Would you agree that lac k of profit-making or return-on-inves tment

from environmental investmen ts has been a barrier to improving your

facility’s environmental perfo rmance?”

What are the most important activities to control at your facility, in

environmental terms? Were they the same 5 years ago?

Continuous reduction of environmental

footprint (y/n)

ⓒⓟ environmental processes Which processes do you use to anticipate situations that could impact the

environment around your facility? Were they the same 5 years ago?

Continuous environmental process

improvement (y/n)

ⓒ involvement of parent company with environmental

decision making at facility level

Corporate Culture How is your company management involved in environmental decision

making at facility level?

Environmental manager appointed at

facility (y/n)

Section IV.

General

Information

ⓟ firms participating in a self-regulated Corporate Social

Responsibility initiative (Finger, 2011), trade associations

(Gunningham et al, 2005).

ⓒ economic sector may have influence over performance

decisions (Delmas and Toffel, 2004; Henriques and

Sadorsky, 1996) ;ⓟ industry reputation (Delmas and Toffel

2010)

ⓒ geographic isolation of facility (Gunningham, 2009)

Questions Design Who is championing environmental values at you r facility?

What could your company do, to be a better environmental performer?

What are the three most important motivations and barriers to environmental

management at your facility, in your experience?

Champion of environmental values

at managerial lev el (y/n)

Plans for improved environmental

performance at facility are formalized

(y/n)

ⓒⓟ ownership of parent company, parent company a

multi-national corporation

Ownership Structure and

Influences

Is your facility (or parent company) publicly traded or privately owned? Is it a

multi-national corporation?

Publicly traded (y/n)

Multi-national corporation (y/n)


19

1.3.2 S emi-structured interv iew grid

This phase also included the development of an interview grid to support the semi -structured

interview in Phase 2. The interview grid included all of the major factors and indicators identified

in the literature review, with the intent of pre -testing the likely relevance of these in the Alberta

context. This phase also included the development of a recruiting script to support the personel

arranging interview appointments. These documents are presented in the Appendix 1.

1.3.3 NAICS and EMS

The North American Industry Classification System (NAICS) offers a framework for collecting and

publishing information on inputs and outputs in a consistent way. However, for the purpose of our

study, we believe that applying NAICS solely would lack the sensitivity n ecessary to reflect the

characteristics of industries regulated by EPEA approvals.

As the primary database for EPEA information, the Environmental Management System (EMS)

incorporates the expertise developed in time by ESRD and is useful for the purpose of reflecting

the characteristics of industries regulated by ESRD approvals. Used alone, for the purposes of this

research, it would be insufficient to distinguish among Alberta industries, particularly in the

manufacturing sector7. We considered its weakness could be compensated by the NAICS approach

that classifies industrial facilities according to economic units that have similar production

processes into the same industry.

For this reason, we used NAICS datasets in conjunction with EMS data to guide the selection of

participants for interviews to ensure a range of industries were captured. Table 5 presents the

industry classification system used to support this research and applies to the 632 industrial

facilities that make up the study population.

Table 5: Modified EM S Merge with NAICS (10)

Industry N

Sour Gas (conventiona l) 257

In-Situ & Heavy Oil (Unconventional) 32

Coal 7

Power Pla nts 67

Hazardous Waste/ Recycling 61

Municipa l/Industria l Landfills 63

Wood & Paper Product Ma nufa cturing 26

Food Manufacturing 28

Manufacturing Chemica l 72

Other product ma nufa cturing 19

7 EMS industry classi fications cl uster ma nufacturing i nto broa d categories , and we were intere sted in understa nding if varience e xisted

in environmental per for mance within industries as well as between industries.


20

Phase 2 – Semi-structured interviews

2.1 Phase 2 Research in Context

2.1.1 A pproach to the first qualitative data collection

This research seeks to provide a dynamic description of factors at play in environmental

performance decision making at the facility level.

Preliminary interviews provide some insight into the explicit factors that account for variations of

practices and processes of environmental performance in Alberta. This procedure aimed to reveal

variations in facility characteristics , to partially validate the relevance of explicit factors previously

identified in the literature, and to capture any emergent factors relevant to the Alberta context

that were not present in the literature.

To capture variance, participants were selected to represent facilities operating across multiple

industries, and interviews were carried out until saturation was reached during analysis of

qualitative data. Organizational features (e.g. size, number of facilities per firm, etc.), which had

clearly been identified as influencing decision making at facility-level within the literature, were

not probed in this phase, as they were well known to occur, and their influence would be

captured in subsequent phases .

2.1.2 S emi-structured interv iew questions

In this exploratory phase of research, this form of questioning left room for interpretation to

enable respondents to express the variability of their practices . The questions for this phase were

aimed at obtaining rich, qualitative material in order to broaden our understanding of factors that

could be at play. The questions were designed to trigger facility representatives into sharing their

perceptions of factors influencing decision making. They purposefully encompassed a number of

possible dimensions to leave interviewees free to express their perceptions. What would regularly

be expressed first by interviewees, or insisted upon, would likely be of interest to the study. This

information would be used to guide the broader quantitative survey.


21

2.1.3 Data collection

In order to design a survey likely to be meaningful to participants and to meet the project

objectives, we undertook a series of telephone interviews with a small subset of facility

representatives. Regional ESRD staff were asked to suggest representatives from each industry

classification who could offer valuable insights to the topic and survey design. Advanis selected

facilities from among these suggestions .

Interviews started on November 25, 2013 and data collection for this phase lasted until November

28, 2013. Interviews were carried out by three researchers and typically lasted between 15 and 20

minutes. The 12 respondents represented facilities that covered six (6) of the nine (9) NAIC codes

represented in the sample.

2.1.4 Data analysis

Interviews were transcribed verbatim and analyzed to identify recurrent themes (explicit factors)

that were known from the literature review. When novel factors emerged, subsequent

questioning aimed to understand them more clearly in the following intervi ews.

Finally, we selected from the interviews a number of significant quotes that best represented the

data describing each explicit factor and integrated them in our results.

2.2 Phase 2 research resu lts

2.2.1 Explicit factors described by interviewees

As we have seen, the literature review provided insights into a range of external and internal

factors that have been shown to influence environmental performance decision-making at the

facility level (Tables 1-4).

Broadly speaking, they include the relationship between the firm and the facility, external factors ,

government and regulatory pressure, public and community pressure, shareholder and investor

pressure, customer and consumer pressure, competitor and industry pressure, and internal factors

that can act to moderate these external pressures8.

This section presents the explicit factors that were qualitatively described as important by our

respondents and illustrate the variability of their perceptions with verbatim quotes from Phase 2

interviews.

8 such as fir m and facility size, ownership, technical a nd resource capa bilities, organizational chara cteristics, functional depart ments,

industry reputation and competitiveness, ma nagerial attitudes.


22

According to interviewees, the economic rationale for environmental projects needs be

considered and the facility’s environmental performance is thus, in part, driven by economic

considerations: "It’s a dollar factor, right. They’re in for ma king a profit o ff their product. They’re

not doing it just for the environment." (Int. 4 , Manufacturing: Food Products )

In addition, there is evidence that to avoid risk facilities sometimes seek environmental

performance at a cost to the organization: "We emphasize safety and environmental

considerations above production. For example, awhile back, we were in a position where our

product was in such demand that there would have been the possibility of running our plants past

their regular capacity, and we implemented a force maj eure in order not to put ourselves in that

position." (Int. 7, Manufacturing: Chemical Products )

Organizations sometimes see their facilities as primarily in charge of improving the environment:

“We’re a little different than a manufacturing plant , where it really becomes a cost against their

bottom line to do some of these things. In our case, our bottom line is driven by being

environmentally safe and improving things.” (Int. 9 , Waste Management Facility)

Management may stress that maintaining environmental performance beyond compliance should

be seen as an integral part of the facility’s performance: “I think we’re heading down the path of

continuous improvement in terms of being proactive and continually improving. If we look at the

overarching corporate structure, the environment, sus tainability, is a very key feature. Our

stakeholders demand that of us . We take that very seriously, and we also think it’s a competitive

advantage, so we use that to move the business forward.” (Int. 3 , Waste Management Facility)

It should be noted that ISO 14001 certification may impact environmental performance beyond

compliance by aligning corporate requirements at or above environmental regulations: “I think the

point that I would raise is there’s the regulations and there’s only so much the regulations can do ,

and then having the ISO 14001 really does help to build that link between corporate requirements

and regulatory requirements.” (Int. 8, Waste Management Facility)

In the same way, industry associations may have an influence on higher levels of performance

beyond compliance. Interviewees describe membership in industry associations as a positive

influence on environmental performance: "People that belong to that voluntarily, that belong to

this group, look at what's coming in terms of industry, look at what's happening around the wo rld,

look at opportunities for going beyond the regular expectations." (Int. 7 , Manufacturing: Chemical

Products)

Practices described as being beyond compliance can be observed where internal standards in the

organization are more demanding than provincial regulations: "So we have to track that on a

yearly basis and report to corporate to meet those targets that they set for the company. And the

targets tend to be more stringent than our local regulations set by Alberta Environment." (Int. 10 ,

Manufacturing: Chemical Products )


23

Cost of an environmental project can be a barrier to environmental performance beyond

compliance, as already described. However, public perception of the facility and new

environmental regulations also have a strong impact on projects: “It would be primarily public

perception or I suppose new regulations, tighter limits.” (Int. 5 , Manufacturing: Pulp and Paper)

Facility representatives are aware that their social licence to operate is linked to their industry's

image, and that effort to improve a poor public image must be managed at a facility level: "We

operate our social licence pretty significantly because the industry we’re in is viewed as being

consumptive, which is not 100% accurate, but that’s the perception we have. We rely on our social

licence a great deal to stay in business." (Int. 3 , Waste Management Facility)

In this respect, there is a perception that the public pressure, at a more general level, influences

the regulatory processes and may exert an indirect pressure on a facility ’s performance: ”If the

public has a concern about something, then of course, that’s a concern that the regulator would

have, and then we would have to answer that.” (Int. 1 , Manufacturing: Petroleum & Coal)

Interestingly, it is sometimes personal involvement of facilities’ representatives in the local

community that seems to explain higher levels of environmental performance: "Again, it’s protect

the environment. You have to live here. Your family has to live in the area. Look after it. Be careful

with what you do, so you go home safe at the end of the day. Those are all values that you try and

instill in your staff." (Int. 9, Waste Management Facility)

Other personal factors seem also to come into play in environmental decision making, as

exemplified by this reference to the position of individuals within the organization : “Well, I mean,

those people’s concerns are different. Usually people are concerned about what impacts them.

Top management cares more about the big picture. Operators would be concerned more about

their job, how does their job affect the environment. Everybody is different. ” (Int. 6, Oil & Gas

Processing)

There is an overall perception that meeting ESRD regulations requires resources and commitment:

“I think I wouldn’t say it’s a real challenge , but it is a concern, and we’ve got to pay attention to it.

If you don’t pay attention, yes , it can get out of control, but if you pay attention and stick up, stick

to your monitoring and stay on top of your operations, we can meet the regulations.” (Int. 1 ,

Manufacturing: Petroleum & Coal)

The perception of the complexity of regulations may be a barrier to compliance, both at personal

and organizational levels: "We comply with everything that we know and every act that we know,

but there’s always a question out there : is there something that we don’t understand as a facility

or as a plant or myself as the environmental person for the plant ?" (Int. 2, Manufacturing: Building

Products)

Finally, as identified in the scientific literature, the size of the organization is described as a factor,

especially with larger companies being oriented towards longer-term profitability and willing to


24

engage in projects that are perceived to lack short -term profitability: “Our company is fairly

diversified, so even when our part of the business is down, quite often another part of the

business is up so if you look at the last (. ..) project we put in, it was a (...) million-dollar project and

we put it in at a time when economically things weren’t real great for our plant, but the long -term

outlook for our company is that we’re a viable business, but they put it in while things were slow

for us that time.” (Int. 2, Manufacturing: Building Products )

2.2.2 Explicit factors and survey questions

The factors identified by interviewees were consistent with those identified in the literature and

the internal ESRD focus groups. This validation enabled the definition of a final list of factors and

their indicators and the survey questions to be explored in Phase 3.

The nature of quantitative questions is to reduce the possibility of multiple interpretations and

increase the ability to easily make comparisons. It also supports analysis of the data at facility

level.

For clarity, factors identified in Phase 1 of research and validated in Phase 2 were integrated into

the survey in four sections. Questions posed to facility representatives relevant to each factor will

be found in the questionnaire (see appendix 2) for each group of factors:

o Section 1: General information (size, international, number of facilities, headquarter

location)

o Section 2: Corporate environment (investor pressure, management values and

involvement)

o Section 3: External factors (external pressures, including customer, pu blic and community

pressures, competitors ’ improvement, regulation)

o Section 4: Barriers to environmental practices (impact on profitability, difficulty complying

with regulation)


25

Phase 3 – Online Survey

3.1 Introduction

This phase of the research constitutes a robust data gathering exercise through an online survey of

industrial facilities in Alberta. This section describes the methodology for collecting and analyzing

the data, explores the findings, and develops a model to articulate the influence of factors on

environmental performance indicators arising from the quantitative survey. The validity of the

model is tested in subsequent phases of the research.

3.2 Data collection meth odology and questionnaire

In order to conduct the data collection using a web survey, we needed to identify the correct

respondent at each facility. To do this, phone calls were made to the facilities (or parent

organization when needed) to locate the appropriate person to contact regarding th e facility and

to obtain their email. Telephone invitations to participate started in December 2013. The diagram

below presents the number of participants for each step of the process:

Chart 1: Data collection process

680 facilities in the initial list from ESRD

512 individual contacts identified in the ESRD list

343 phone contacts made at facility level that accepted to provide contact information

Web answers for 264 facilities from 221 individuals

Pro

gres

sio

n o

f th

e p

roce

ss

DATA COLLECTION PROCESS

LOSS

33

%LO

SS 2

3%

LOSS

0%

The designated participants received an email invitation after the initial phone contact. This was

followed by an email reminder and phones calls to the non-responders. A total of 343 industrial


26

facility representatives were contacted from December 2013 until the end of March 2014, and

they agreed to participate. The web survey was conducted from February to April 2014. We

obtained completed surveys from 264 facilities. In some cases, one representative was in charge of

more than one facility, so the 264 completed surveys were received from 221 individuals.

Please find the final version of the web survey questionnaire in Appendix 1.

3.3 Build ing a model of indicators of environmental performance and factors

In order to gain a better understanding of various relations between factors and environmental

performance, an analytical model was designed to position the Phase 3 quantitative survey to

answer the research question.

Hypothesizing from our literature review, ESRD focus groups, and the Phase 2 semi-structured

interviews, two categories of variables were created: the factors that influence performance and

the indicators of environmental performance.

Indicators of environmental performance

Factors Positive, negative or no influence

Factors

Factors

Positive, negative or no influence

Positive, negative or no influence

Environmental performance indicators and factors were both created by the same process and

constructed based on multiple questions within the web survey. Each question represented a facet

of the factor or indicator identified in the literature, which we needed to validate.

The modelled relationships between factors and indicato rs were also hypothesized from the

literature review and the qualitative interviews. The numbers of participants in the project was

sufficient to make possible the creation of a model that explains the relationship between the

indicators and factors. After data collection, a statistical analysis was conducted using logistic

regressions. This enabled us to identify factors that were influential on indicators. The analysis is

presented in detail in section 3.5

The next sections describe in detail both the indicators and factors.


27

3.3.1. I ndicators of environm ental performance

There is no universal measure of facility-level environmental performance, and developing a

concise measure is difficult (Nawrocka and Parker, 2009). Environmental performance spans a

range of activities across media (air, water, biodiversity, reclamation, waste management, etc.),

that different sectors impact differently. Organizational practices also vary, ranging from focus on

regulatory standards to other practices outside of the re gulatory requirements.

Lacking a definition of environmental performance, we could only aim to measure the influence of

factors on indicators, i.e., a measure of the statistical significance of each of the factors identified

by industry in explaining the performance of the indicators.

To address this challenge, the research team developed composite measures of performance

based on literature and findings in Phase 2 of the research. These composite measures of

performance will be called “indicators of environmental performance” in the rest of this

document.

They captured (1) positive environmental practices that are aimed to have a beneficial

environmental impact, (2) self-perceptions of the facility representative on the level of compliance

and (3) self-perception of standards they are applying at facility level to indicate facility -level

environmental performance beyond compliance.

These three indicators of environmental performance are presented below, including all the

questions that were used to create them.

1. Positive practices in the facilities:

Documented environmental policy (question 19A) ;

Intern al environ mental audits at regular intervals (question 19B);

External environmental audits at regular intervals by a third party (qu estion 19C);

Periodic publishing of environ mental p erformanc e information to the public (qu estion 19D);

Environmental c ertific ation (e.g., ISO 14001 certification) (question 19E); Facility en vironmental achievements published in annual reports (question 19F);

Environmental management system (question 19G).

2. Self perception of the standards that the facility is applying:

Environmental responsibility is emph asized through well-d efined environmental pol icies and procedu res

(question 21A); Our environmental standards are more stringent th an mandatory governmental requirements (question

21B);

We conduct environ mental audits for our o wn performanc e goals, not just for compliance (qu estion 21C);

We are well informed about th e b est pract ices in environ ment (question 21D).

3. Self-Perception of compliance of the respondent (when applicable):

Water qual ity (question 23A) ;

Water use (qu estion 23B);

Air emissions (question 23C);


28

Land man agement and reclamation (qu estion 23D);

Wildlife and biodiversity (question 23E);

Noise pollution (question 23F); Odour pollution (question 23G);

Waste man agement (qu estion 23H).

The first two indicators were created in two steps. First, we divided the number of questions that

got a positive answer by the total number of questions in each of the indicators. Next, based on

the distribution of the data, we defined organizations with 75% of positive answers or more to be

performing at a higher level than other companies.

For the third indicator, we defined that companies that indicate that they were doing more than

what is required by regulations have a high level of “self-perception of compliance .” The

assumption is that this perception of a higher level of compliance is likely to be correlated with an

actual higher level performance.

3.3.2 Factors that influence environmental perform ance

As with environmental performance, no set of motivating factors is commonly accepted. The

factors used hereafter were identified in the literature and in phase 2 of the research. Their

influence on the indicators of environmental performance was tested in the quantitative survey.

1. Management values and involvement

Upper management's encouragement of fac ility p articip ation in voluntary environ mental pro grams (question

10D);

Clear internal en vironmental policies or stand ards that apply to all fac ilities within th e organizat ion (question 10E);

Upper management's belief in a moral responsibility for p rotect ing th e environment (qu estion 10F);

Upper management's support of environ men tal improvements even if costs are substantial (qu estion 10G);

Upper man agement ’s belief th at improvements in environmental p erformanc e can increase long-term

profits (question 10H).

2. The importance of corporate image

Ensuring a good corporate image (question 10I);

Media coverage of an environmental incident involvin g your co mpany o r your fac ility (qu estion 10J);

Customers' d esire for environmental ly friendly products and serv ices (question 12A) ;

Ability to earn public recognition or customer goodwil l with environmentally friendly actions (question 12B);

Pressure fro m en vironmental interest groups (question 1 2C); The loc al community's p erc eption of the facility (question 12F);

Media coverage of an industry-related environ mental incid ent (question 12I).

3. The Regulations

Complying with cu rren t govern ment environmental regulat ions (question 12D);

Desire to b e b etter prepared to meet anticip ated environmental regulations (question 12E);

Meet ing industry standards (question 12H).

4. Investors pressure

Satisfying investor (own er) desires to reduc e environmental risks and l iabili ties (qu estion 10A);

Protecting or enhancing th e valu e of the facility or p aren t organization for investors (o wners) (question 10B);

Satisfying lend ers’ d esires to reduc e environ mental risks and liabi lities (question 10C).


29

5. Impact on profitability

High upfront investmen t exp ense (qu estion 17A);

Cost of staff training (qu estion 17B);

High day-to-day costs (question 17C);

Significant upfront time co mmitment to implement (question 17D);

Uncertain future ben efit (question 17E) ;

Risk of downtime or delivery interruptions durin g imp lementation (qu estion 17F);

Lack of return on investment(question 17H).

6. Competitors improvements

Keepin g up with comp etitors’ environmental improvements (question 10K);

Keepin g up with comp etitor environmental improvements (question 12G) .

7. Difficulties complying with regulation

Complexi ty of interpreting regulations (question 17G);

Not required by law (question 17I).

8. Barriers to improvement

Composed of two factors : difficulties complying with regulation and imp act on profitabi lity. Th e analysis of

this composed factor takes into account all the questions that measure barriers to improvement . Alone, the

factor Impact on profi tabili ty did not show any influ ence.

Each of the factors were calculated by dividing the total number of questions to which

respondents answered “agreed to9” by the total number of questions that were included in the

factor. To make sure that our factors were strongly positive, not just slightly positive, the top rank

of the Likert scale was used.

9 For some fa ctors this included only the “strong ly agree” level. For other fa ctors it i ncluded both “strongly

agree” and “somewha t ag ree.”


30

3.4 Results

3.4.1 Facility profiles

In order to better understand the results, a serie s of questions at the beginning of the

questionnaire aimed to define the character of the organizations involved in the research (i.e.

revenue, size, international, number of facilities, headquarter location). It is important to keep in

mind that the research design was focused on industrial facilities with an approval under EPEA

which requires an approval based on the environmental risk of the activity, not the size of the

company.

This section provides information on facilities and organizations. We noted a broad range, in terms

of sector and organization size (that can be interpreted through the yearly revenue), as well as

facility size (that can be interpreted by the number of employees at the facility). The table below

presents the estimated annual revenue of organizations that own these facilities. More than half

of the organizations have sales exceeding $500 million per year. This demonstrates that most

respondents in this research are from organizations with large revenues (76% have revenue equal

or greater than $50 million yearly).

Table 6: Organization' s average yearly reve nue

Total

Unweighted totals : 170

Less tha n 5 million 12%

5 to 10 million 3%

10 to 50 million 9%

50 to 100 million 7% 100 to 500 million 18%

More than 50 0 million 51%

Source: Adva nis 201 4, que stion 27 .

Facility size was measured using the proxy of the number of employees. We can see that many

facilities seem to be of relatively small size or at least do not require labour intensive activities.

Table 7:

Number of employe es worki ng at the facility

Total


1 to 3 21%

4 to 14 27%

15 to 49 21%

50 or more 31%

Mean : 115.9

Median : 15.0

Source: Adva nis 201 4, que stion 6.

Table 8 presents the industry/sector the facilities represent. The data did not show important

variation in the answers based on the industry/sector classification, although some notable

differences did appear in the manufacturing sector (presented in the sections 3.3 to 3.5).


31

Table 8: Sector of activity of respondents

Total

Unweighted totals : 264 Oil & Gas Pr oce ssing 36%

Manufa cturing 23%

Waste Manage ment Facility 22%

Munici pal Water Systems 9% Electric Power Syste ms 8%

Others 2%

Source: ES RD 201 4, sample file.

Most facilities surveyed belong to multinationals. It was thought that the fact that these

companies were operating in more than one country could influence their standards10. We wished

to validate if multinationals were undertaking better practices11 than exclusively Canadian

companies. The results did not show any consistent difference across the indicators between the

multinational and other companies in the sample.

Table 9:

Operate i n more tha n one country

Total


Yes 71%

No 29%


Publicly traded organizations represented 65% of the surveyed facilities. This result is similar to the

number of multinational companies (71%), which are often publicly traded.

Table 10:

Organization publicly tra ded, privately ow ne d,or g overnme ntal/munici pal

Total


Publicly trade d 65%

Privately owned 24%

Governmental or muni cipal 10%


Only 28% of the organizations surveyed have only one facility in Alberta. The median number of

facilities is five (5), but the mean is much higher. This is due to a few organizations that have

several hundred sites in Alberta, thus increasing the mean number of sites. This may relate to the

characteristics of multinational organizations which, in most cases, may have more than one

facility operating in Alberta.

10 The term “Standa rds” refers to the indicator of environmental performa nce presented in section 3.2.1. 11 The term “Practices” refers to the indicator of environmenta l performance presented in section 3. 2.1.


32

Table 11:

Total num ber of facilitie s in Alberta

Total


1 facility 28%

2 to 10 fa cilities 38% 11 or more 34%

Mean : 37.15

Median 5.00


3.4.2 Env ironment decision and responsibility at the f acility level

Table 12 presents the findings of the role within the organization that has the primary

responsibility for investments in environmental improvements at the facility level. The survey

results established that it is mostly high-level personnel that hold the primary responsibility for

investments at facilities. We note that 42% report that investment decisions in environmental

improvements at the facility are made by a senior executive (i.e. president, CEO, or vice president).

Only 26% report that it is the facility manager who makes this decision.

Table 12:

Holder of the primary responsi bility for investme nt de cisions i n envir onme nt at your facility

Total


Owner, Presi dent, or CEO 27%

Vice Preside nt 14%

Director 11%

Plant Manager/Facility Manager 26%

Environmental Health and Safety Manager 6% Other Environme ntal Manager (compliance, sustainability, etc) 5%

Other 12%


In terms of investment in the past five years, more than half (55%) of the facilities increased their

investment in environment, and 41% of facilities maintained their level of investment. Only a small

percentage (4%) mentioned a decrease in their investments. These facilities are mostly identified

as low-complexity12 operations in terms of process, and more than half are from the oil and gas

sector.

Table 13:

In the past five years, ev olution of the lev el of inve stment in e nvironmental infrastr uct ure or impr ovements at t he facility

Total


Increase d 55%

Remai ned stable 41%

Decrease d 4%


For the management of environmental incidents at the facility level, two groups are almost always

involved: the operations and the environmental divisions. Of note, the legal division ranks third in

12 The level of complexity refers to EMS classif ica tions of complexity.


33

the list, with 55% of respondents indicating they have a role in responding to environmental

incidents at the facility.

Table 14:

Groups inv olved i n the re sponse and sol ution whe n envir onme ntal incide nts occur at your facility (in the pa st 5 years)

Total


Operations 97%

Environment 93%

Legal 55%

Finance 34%

Research and i nnovation 22% Marketing 8%

Other 29%

Source: Adva nis 201 4, que stions Q9A_A to Q9A_G.

In total, 212 facilities out of the 264 that responded said they were members of at least one

industry association, representing 80% of the surveyed facilities. Table 15 presents the type of

industrial association their facility or organization belonged to. These are categorized by the

function of the association.

Table 15:

Part of the following associations Total


Sets industry standar ds and best pra ctice 70%

Offers or facilitates industry training 51%

Facilitates market acce ss 21%

Facilitates relationships with government, public, a nd non-g overnment partner s 62%

Lobbies on behal f of the industry ’s interests 48%

Fosters innovation 33%

Other 2%

None of the a bove 8%

Source: Adva nis 201 4, que stion q11d.

3.4.3 Association m embership

In total, 212 respondents confirmed their membership in industrial associations. The original list of

associations provided to them in the survey was expanded by participants .

Table 23:

Industry associations initia lly

identified by ESRD

Other associations mentioned by responders in survey (q11c1)

Northeast C apital Industrial

Association (Oil and Gas) Strathcon a Industrial

Association (Oil and Gas) Canadian Association of

Petroleum Produc ers (Oil and

Gas) Canadian Fuels Association (Oil

and Gas)

Chemistry Industry Association

of Canada (M anufacturin g) Alberta Fo rest Products

Alberta Association Of Municip al Districts & Counties –

AAMDC Alberta C apital Airsh ed

Alberta O ilfield and Treatin g Disposal Association – AOTD A

Alberta Urb an Municipalities Association – AUM A

Association of Americ an R ailro ads

Canadian Association of Ch emic al Distributors – CACD

Canadian Association of Petroleum Produc ers – CAPP

Canadian Electric ity Associat ion

Canadian En ergy Pipel ine Association

Canadian Forest Products Association – FPAC

Canadian Steel Producers Association – C SPA


34

Association (Forestry) Canada’s Oil Sands Innovat ion

Allianc e

Explorers and Produc ers Association of Canad a

Independ ent Po wer Producers

Society of Alb erta Alberta Us ed Oil M anagement

Association

Petroleum Technolo gy Allianc e

of Canada Agrich emic al Warehousing

Standards Association

Canadian En ergy Pipel ine Association – CEPA

Canada Foundation for Innovat ion – C FI

Canadian L and R eclamation Association – CLRA

Canadian Plastics Industry Association – CPIA Canola Council of C anada

Cement Associat ion of Canad a

Environmental Serv ices Associat ion of Alb erta – ESAA

Forest Products Association of C anad a – FPAC

Fort Air Partn ership

Industrial Association of Southern Alb erta – IASA

Mining Association of C anada

National Council of Air and Stream Impro vement – NC ASI

National Rend erers Association – NR A

Northeast R egion CAER

North Saskatchewan Watersh ed All ianc e – NSWA

Ontario Waste Man agement Associat ion – O WMA

Peac e Airshed Zon e Association – PAZA

Petroleum Services Association of Can ada – PSAC

Recyclin g Council of Alb erta – RCA

Responsible Care – Ch emistry Industry Association of Can ada

Solid Waste Associat ion of North America – SWAN A

Wood Buffalo Environmental Association – WB EA Wood Preservat ion Can ada – WPC

3.4.4 I nteractions and relations with t he regulator

The following section provides responses regarding the relationship between the facility and the

regulator. Table 16, provides the results on the frequency of inspection by an environmental

agency. We note that approximately 50% of the facilities report an inspection frequency of “every

few years.”

Table 16:

Freque ncy of inspe ction at the facility by a n envir onme ntal agency

Total


A couple of times yearly 15%

Yearly 34%

Once every few years 51%

Source: Adva nis 201 4, que stion q15.

Of note, 86% percent of facilities report a relatively good mutual understanding between

themselves and the regulator. Considering that the role of the regulator includes enforc ement (i.e.

fines, non-compliance notice) the answers are relatively positive.

Table 17: To what exte nt do y ou agree t hat there is g ood mutual understa ndi ng betwe en your facility and the reg ulator?

Total


Strongly agree 52%

Somewhat Agree 34% Neither Agree nor Disagree 8%

Somewhat Disagree 4%

Strongly Disagree 2%



35

3.5 Results and develop ment of the final statistical model of analysis

The following model presents the most important statistical relationships between indicators and

factors that were identified in the research. We tested which factors had a significant impact on

each indicator, using logistical regression models. It is the visual representation of the influence of

the factors on the indicators of environmental performance. Some relations are positive (+), some

are negative (-), and some have no impact (?).

Chart 2: Model of the factors and indicators

The statistical relationship between the factors and the environmental performance indicators is

presented in the table below. The sigma (σ) is a measure of the statistical significance. A value

lower than 0.05, it indicates that the factor has a significant impact on explaining the indicator.

The beta coefficients are the standardized coefficients estimating the impact of each factor on the

indicator. The standardization of the coefficients means that each coefficient was br ought to an

equal unit of measurement, making them comparable between each other. The factor with a

coefficient of the greatest magnitude has the most important effect on the indicator.


performance

FACTOR

Investor pressure

(Q10A-Q10B-Q10C)

FACTOR

Management

value and

involvement

(Q10D-Q10E-Q10F-

Q10G-Q10H)

FACTOR

Impact on

profitability(Q17A-Q17B-Q17C-

Q17D-Q17E-Q17F-Q17H)

FACTOR


Q12B-Q12C-Q12F)

Facilities practices(Q19A-Q19B-Q19C-Q19D-Q19E-Q19F-

Q19G)


FACTOR


FACTOR

Competitors

improvements

(Q10K-Q12G)

FACTOR

Difficulties complying with regulation(Q17G-Q17I)

FACTOR

Barriers to



regulation )

Perception of compliance (Q23H)

-

+

+

+

-

+

+

?

?




36

Table 18: Hypothesis analysis Indi cator – Facilities pra ctices (>=75%)

Factors Beta (β) Sigma (σ)

Corporate image 2.274 6.678E -06 Barriers to impr oveme nt -1.34 0 4.619E -03

Indi cator – Facilities Standards (>=75%)


The regulation 1.112 0.0243 Manageme nt values 1.824 0.0003

Competitor improvements 1.524 0.0028

Diffi culties complying with regulation -0.97 8 0.0318

Indi cator – Perce ption of com pliance (Wa ste manageme nt indi cator a bove re quir ed level)


Manageme nt values 1.2025 0.0009 Source: Adva nis 201 4, survey data.

As for the relationship between our two major indicators of performance, we have found that the

presence of positive practices and regard for standards are strongly correlated. The following table

shows the result of the cross tabulations of these variables. The test shows a level of correlation

with 99.9% certainty level.

Table 19:

Relationship betwee n standards and practi ces

Total : Practices (low result) Practices (high re sult)

Total : 220 148 72

Standards (l ow result) 149

68%

111

75%

38

53%

Standards (high result ) 71

32%

37

25%

34

47%

Source: Adva nis 201 4, survey data.

3.5.1 A nalysis by indicators: Facilities’ practices

As mentioned previously, some major factors have an influence on practices implemented at the

facilities. Globally, seven questions were used to create the indicator of facility practice. We can

observe that the respondents mentioned some of these practice s were widespread across all

facilities, but others were less present. The top tiers were used to define the binary indicator used

in the analysis model presented previously.

Table 20: Practices impleme nted i n facilities Total


1-Documente d environme ntal policy 99%

2-Internal e nvironmental audits at regular intervals 87%

3-Environme ntal Management System 79%

4-Exter nal environmental audits at regular intervals (by a third party) 75%

5-Facility environmental achievements are publishe d in annual reports 52%

6-Periodic publishing of environme ntal performance infor mation to the public 45%

7-Environme ntal Certificati on (e .g., ISO 14 001 certification) 32%

Source: Adva nis 201 4, que stions Q19A, Q19 B, Q1 9C, Q19D, Q19E, Q19F, Q19G.


37

There are two factors that influence the facilities’ practices. The first factor is the importance of

corporate image. We observed that, when the corporate image was identified as being very

important to respondents, they implemented more of the above seven practices. The second

indicator that influences practices that were implemented is barriers to improvement . The more

pressure on profitability and the complexity of understanding the regulations were perceived, the

less these practices were implemented in the facilities. It is to be noted that this second factor is a

composit, and it only influences the indicator when using the two underlying factors in conjunction

(impact on profitability and difficulties complying with regulation).


performance

FACTOR


Q12B-Q12C-Q12F)

Facilities practices

(Q19A-Q19B-Q19C-Q19D-Q19E-Q19F-Q19G)

FACTOR

Barriers to



regulation )

-

+



The data analysis showed a number of interesting elements that are described below:

97% of respondents in the manufacturing sector implemented internal audits but only 80% of the oil & gas processing (mean of the sectors is 87%) did the same .

We note that the facilities with an operation of high level of complexity, as defined by

ESRD, are more prone to publishing environmental performance information to the public .

When management staff have strong environmental values, there is an increase in the frequency and use of internal audits (Q10D: 94% vs 76%, Q10E : 92% vs 66%, Q10F: 9 3% vs 76%, Q1 0H: 9 2% vs

77%).

3.5.2 S urvey analysis by indicators: self perception of facilities’ standards

Of note, four questions were used to create “facility standard” indicators. They are presented in

the table below. They were recoded into binary variables for analysis purposes.

Table 21: Perceive d facilitie s standards Total Agree Neither Agree nor Disagree or Disagree

Environmental responsi bility is empha sized thr ough well -

define d environme ntal polici es and procedure s 263 85% 15%

Our environme ntal standards are more stringent than

mandat ory governme ntal require ments 258 69% 31%

We conduct environme ntal audits for our own per for mance

goals, not just for compliance 262 82% 18%

We are well infor med a bout the best pra ctices in e nvironment 262 86% 14%

Source: Adva nis 201 4, que stions Q21A, Q21 B, Q2 1C, Q21D.


38

In terms of facilities’ standards, there are four factors that influence their level.


performance

FACTOR

Management

value and

involvement(Q10D-Q10E-Q10F-

Q10G-Q10H)


FACTOR


FACTOR

Competitors

improvements(Q10K-Q12G)

FACTOR

Difficulties

complying with

regulation(Q17G-Q17I)

+

- +



+

The data analysis also shows a number of interesting elements that are described below:

95% of the manufacturing sector mentioned that environmental responsibility is

emphasized through well-defined environmental policies and procedures. Only 76% of

waste management facilities mentioned that environmental responsibility is emphasized

through well-defined environmental policies and procedures (mean of positive answers

across all sectors is 85%).

The results show that when management staff have strong environmental values, the

environmental responsibility is more emphasized through well -defined environmental policies and procedures (Q10D: 81% vs 44%, Q10E: 76% vs 36%, Q1 0F: 75% vs 31%, Q10G: 79% vs 4 5%, Q10H: 7 9%

vs 45%).


39

3.5.3 S urvey analysis by indicators: self perception of compliance

The third indicator that we tried to create could not be aggregated in the same manner as the

others presented in this report. The difficulty we faced analyzing thi s indi cator ca me fr om the fact that there are

important variations in the type of pollution emitted by a facility. We were able to find a relationship

between the waste management and the motivating factor.

Nonetheless, there were few other statistical relationships between some more individual

elements regarding the “perception of compliance” indicator. These must be analyzed with

caution because of the large number of facilities that were not concerned with several of them.

Still, it does provide some insight for the facilities for which the information was available.

Table 22:

Element - Q23_a Water quality


Corporate image 1.380 0.018

Diffi culties complying with regulation -0.94 1 0.045

Consta nt -1.89 5 0.000

Element - Q23_ b Water use


Corporate image 1.788 0.001 Consta nt -2.16 0 0.000

Element - Q23_ d La nd management and recl amation


Investor pressure 1.331 0.005

Consta nt -2.59 4 0.000

Element - Q23_f Noise poll ution


Competitor improvements 1.246 0.020

Consta nt -2.52 7 0.000

Element - Q23_g Odour polluti on


Corporate image 1.849 0.003

Consta nt -2.60 8 0.000

Source: Adva nis 201 4, survey data.


40

3.5.4 Ranking of the factors by respondents

Respondents were asked to identify the elements they felt were the strongest influence on

environmental performance. First, the respondents were asked to mention their top three

elements (which are a part of the larger factor) for each bloc of questions re levant to corporate

environment, external factors, and barriers to environmental practices. Then, only the top three of

each bloc were presented to them to choose the most important three out of the nine elements

left.

Interestingly, barriers to environmental practices were not the most important elements affecting

environmental decisions. Rather, two elements composing the external factors were selected:

Complying with current government environmental regulations (n=180)

Meeting industry standards (n=82)

One element of the internal corporate environment factor also emerged as being of large

importance, this element being:

Upper management's belief in a moral responsibility for protecting the environment

(n=72)

Chart 3: Top three elements

Clear internal environmental policies or standards that apply to all facilities

n=131

Complying with current government environmental regulations

n=221

High upfront investment expense n=102

Upper management's belief in a moral responsibility for protecting the environment

n=137

Ensuring a good corporate image n=98

Meeting industry standards n=155

Desire to be better prepared to meet anticipated environmental regulations

n=151

Lack of return on investment n=79

Not required by law n=71

Upper management's belief in a moral responsibility for protecting the environment n=72

Complying with current government environmental regulations n=180

Meeting industry standards n=82

Three most influential factors that have led to environmental improvements at your

facility within the last 5 years

Three most influencial factors that have led to environmental improvements at your

facility within the last 5 years

Three most significant barriers to the adoption of environmental improvements at

your facility

Top three factors chosen per dimension

Top three among the top nine factors

Corporate environment External factors Barrier to environmental practices


41

3.6 Summary of Key Findings

This phase of the research has shown solid trends. First, we were able to establish a profile of the

participating facilities. This was essential since the industrial structure is diverse in Albe rta. It was

necessary to know if the characteristics of the facilities (e.g. size, multinational, level of

complexity, sector of activity, etc.) would be more important than the factors that were

developped in explaining the environmental performance. The results showed some difference

occurring in the manufacturing sector, that weren’t present amongst other industry classifications,

but the characteristics were not identified as being the most important elements.

Second, the model was used to test the effects of the factors on the indicators of environmental

performance. When the statistical analysis was conducted, a number of factors were shown to

influence the indicators. These results gave a direction for the phase 4 of the research. Knowing

the important factors, the focus was now on understanding how and why they were influencing

the indicators of environmental performance.


42

Phase 4 – In-depth Qualitative Interviews

Phase 4 precisely addressed the limitation of retrospective bias, as interviews conducted from April

24 to May 15, 2014 documented the practices of managers at the facility level. Participants were

contacted as a follow-up of survey completion on the neutral ground that their practices were of

special interest to research.

This phase was undertaken to explore more deeply some of the interesting elements found in the

research, and areas that required further clarification. Through 22 qualitative interviews with

managers at facilities , this phase of research explored in depth the explicit and implicit factors

influencing environmental performance decisions. It generated a better understanding of the

various factors that influence environmental performance decision making, with a view of

supporting future policy development and program design pertaining to environmental

performance and excellence.

The results were used to design the quantitative grid used in the final phase of research.

4.1 Interview grid design (Phase 4)

Section 3.5, presented the factors that emerged from the quantitative data analysis : regulations,

corporate image, management values, and perception of competition. From this chart, we

formalized three research questions in Phase 4 to investigate further environmental decision-

making.

The initial interviews were designed to explore this area of research described by the following

questions:

o How are environmental regulations and improvements related at facilities? How can

barriers to compliance be d ecreased? (grid A)

o How are corporate image and environmental improvements related at facilities? (grid B)

o How are management values, perception of competition, and environmental

improvements related? (grid C)

Data collection and analysis were adapted from the Grounded Theory approach developed by

Strauss and Corbin (1990), which we considered more appropriate to this research than the more

inductive version proposed by Glaser. Data collection relied on theoretical questioning; data

generated by each grid after five interviews allowed us to assess which research questions showed

the best potential for enriching our understanding of Phase 3 results (Chart 4). The most promising


43

grid was further refined (interview grid 2, in Appendix 3) in light of the qualitative data analyzed

and that grid used for data collection until saturation was reached. Interviews were prepared for

analysis immediately after data collection and coded by breaking the text into meaningful

elements and assigning a representing concept to each. After a number of iterations, data

saturation was obtained as nothing of significance seemed to emerge from additional data

collection.

Char t 4: research themes

It should be noted that several elements of our analysis are typical of a grounded theory,

conceived in a practical way:

The analysis starts from a framework of reference rather than relying on pure induction;

our initial framework was provided by the previous phases of this research.

Data collection and analysis by constant comparison occurred simultaneously, and

theoretical sampling was used; we chose respondents likely to shed light on the themes as

they emerged from the data collection process.

Theoretical questioning, the evolutive set of questions , was used (several interview grids).

4.2 Results

We also intended to develop at this stage an understanding of the dynamic interplay of explicit

and implicit factors contributing to decision making.

As mentioned above, the factors that emerged from the quantitative data analysis , as described in

Chart 2, informed the themes of our interview questions.

Corporate Image Management and competiti on

Regulation and barriers

Phase 3

results

Interview grid

B

Interview grid

A

Interview grid

C


44

We first investigated the three themes of (1) Regulations and environmental improvements at

facilities, (2) Corporate image and environmental improvements, and (3) Management values,

perception of competition and environmental improvements, systematically looking for an in-depth

description and in each case.

Then the interview grids proposed in Appendix 3 evolved after the first interviews in order for

subsequent data collection to shed light on emerging themes.

As the data collection proceeded, it became clear that the theme of regulation was at the centre

of interviewees ’ self-described perception of environmental performance and more important to

them than corporate image, management values and competition, in influencing facility level

environmental performance.

The interview grid focusing on regulation was used and refined to formalize the interview grid 2

that was used in subsequent interviews , until data saturation was reached.

Our results show that regulation interplays with a number of other factors in environmental

decision making at the facility level. Regulation appears to have the following impact (Chart 5):

an explicit effect on the organizational dynamics—the sum of actions taken within the

organization;

an implicit effect on people in general, both within and outside the organization, which in

turn will influence environmental practices at facilities.

Regulation is described as having a role in clarifying the levels of expectations regarding

environmental practices at facilities. Interviewees describe how they rely on regulation when it

comes to deciding which projects they need to prioritize: “I guess with any kind of standard or any

kind of act or regulation or directive, if it’s written on paper and it’s fairly clear , then most people

can abide by it very quickly, buy into it very quickly.”

Regulation also is seen as equalizing the levels of environmental performance among competitors

of the same industry “so that everybody is sort of playing from an equal footing.” In other words:

“If it’s seen as being provided by the government , it provides kind of an industry standard so that

everybody knows that they are playing by the same rules .”

Focusing the analysis on the social side of regulation (its effect on people) allows the identification

of implicit factors in decision making that were revealed in the interview data.

Common among all of the interviews was the desire to be seen as members of an organization

that is compliant with regulation. Sentences such as “Really, we don’t have any roadblocks when it

comes to environmental protection,” or “Well, everybody is concerned with what (they) put in the

environment, so it’s our responsibility to, well, to plan, to take care of what we have for the next

generation,” were typically found in interviews. Taken together, they convey the idea that

environmental value s are shared by employees and management at facilities, in the organization ,


45

and in the community and that this influences decision making: “I think, you know, the employees’

opinion of being environmentally conscious is important to our senior management , and the

decisions we make are based on it.”

Also, it is interesting to note that this social dynamic is mentioned by interviewees when it comes

to describing the reasons for facilities to go beyond compliance.

Comments comparing their own facility’s environmental practices with known practices by other

organizations and other value-laden comments about practices at the facility level show that social

influence is a factor of environmental performance beyond compliance. It is perceived as coming

both from the personnel at the facility and the interaction with the community. Incentives to go

beyond regulation are mostly described in such social terms by interviewees:

“From a financial perspective, I would say it’s not about the money because , really, when

you are managing an environmental liability, I don’t think the government is able to offer

any type of a concession that is really going to be meaningful or material to the big picture.

But what they can offer is some recognition to the compa ny that they’re doing a good job so

that the company can leverage that with the other stakeholder groups . Whether that’s a

community or the province at large, it creates a sense of pride and accomplishment.”

Finally, a risk of stagnation in environmental practices is described (“everybody thinks we should

be proactive on these things, well, that’s not necessarily true”) when the regulator is perceived as

not rewarding organizations that anticipate future regulation, for instance , by changing its

environmental priorities or by not updating regulations regularly enough, which both penalize

environmental innovators.

The following quotes (Chart 4) exemplify in details our results for Phase 4, and a model is

proposed to integrate the implicit and explicit factors of environmental decision making at

facilities (Chart 5): each arrow of Chart 5 is illustrated by a quote from Chart 4.


46

Chart 4: Four di mensions of environmental performance at facilities

En

forc

ing

co

mp

lian

ce

Social lever Regulatory leverB

eyo

nd

co

mp

lian

ce

clarifying the levels of expectations

equalizing the levels of environmental performance

collateral effects of regulation

environmental values

formal recognition of the efforts to go beyond

compliance

I guess with any kind of standard or any kind of act, or regulation or directive if it’s written on paper and it’s fairly clear then most people can abide by it very quickly, buy into it very quickly.

I think because they provide that incentive, that guidance for a company to put capital, or whatever kind of budget towards something: if they don’t have to do it, they won’t do it. Basically that’s what it comes down to.

Why do regulations work? Well if you’re running any kind of operations, you need specific guidelines, and operation depends on guidelines to function.

Regulation brings certainty to that process and allows us to know that we are making an investment of our time, our efforts, our finances etc that will provide us benefit in our operations.

Set a common threshold across the province. If Alberta took the lead and established goals, objectives, took the lead on perhaps finding funding to implement some of these programs [...] so that everybody is sort of playing from an equal footing that would be best.

If it’s seen as being provided by the government it provides kind of an industry standard so that everybody knows that they are playing by the same rules. No company is put at an advantage versus another company because…you know they’re able to cut corners. Everybody has to basically walk the same line kind of thing.

In some areas, you try to get to where you think it’s going, if you’re watching other jurisdictions, but sometimes, you have to be careful or that, because Alberta, in some instances, seems to be a little slower in making some of the adjustments. Sometimes you can put yourself at a competitive disadvantage by trying too far ahead of the regulations.

Anything that we wanna do, in terms of improving environmental performance, typically is costly. Significant money, significant efforts, it takes a long time. We certainly don’t want to start down the road of doing something only just to be told that we should be doing something else. That is extremely unproductive. And that is one of the reason that we wait for the regulation as opposed to … everybody thinks we should be proactive on these things, well that’s not necessarily true, because you can spend a lot of time and efforts doing something that you think is beneficial only to be told that we should be doing something else.

The waste control regulation hasn’t changed, the main one for my business hasn’t been changed since 1996. They had a study group several years that went through a reworked everything and then it never got passed the planning stage. The government priority hasn’t been on my side of the business.

So my direct experience with anticipating future regulations is that often times Alberta Environment isn’t able to, or, Alberta Environment isn’t able to, or doesn’t enact the regulations so you end up spending more money than you needed to and then that obviously makes it more difficult to achieve, to acquire money for other future environmental issues.

social comparison

For industry Greenhouse Gas emission intensity, taking the process emission component out of the intensity calculation does not encourage improvements in production emissions. As long as you are meeting your approval you won't really do much more.

I would like to see the general public educated a bit more on how industry is doing as a whole. The companies that repeatedly have the failures are casting a shadow over the entire industry and it is disheartening for the companies operating responsibly.

Beyond cost i would have to say one of the barriers that i run into is really changing people mindsets.

Current regulations encourage companies to stay well clear of defined regulatory limits to avoid compliance orders.

Regulations are not equally understood across the province, as different regions and different individuals within the regulatory sector, interpret terms and conditions of the regulations (especially certain regulations with vague terminology) differently and

inconsistently across the province.

I think if they were able to standardize some of the key performance indicators they are interested in, if they were doing a better job at communicating that out to the public, and companies would have to take notice of where they sit on that perspective.

The EnviroVista Program is an example of how companies with an Environmental Stewardship mindset can be innovative beyond regulatory requirements to the benefit of all Albertans. What is needed is incentives to help others understand the benefits of working towards that same mindset - show the positives of changing behavior.

c

a

h

f

e

i

a

g

d

b

…younger people working here, people fresh out of the university so I think it’s more of a cultural thing with them [...] I guess the influence is they do want see us do the right thing as well as obviously we have to be in compliance to stay operating. I think, you know, the employees’ opinion of being environmentally conscious is important to our senior management and the decisions we make are based on it.

Well, everybody is concerned with what (they) put in the environment, so it’s our responsibility to, well to plan, to take care of what we have for the next generation.

I’ll call it the social license, but really it comes down to competition for people within a local area. People have to believe that you’re a responsible company or they don’t want to work for you.

The sort of a social perspective, so [here] we have a growing interest from the public who would like to divert on material and they are now pressing to say “we want to be able to recycle more and more material we want to be more like the Edmonton, Calgary or Halifax”, and as those social values evolve it puts pressure on our muncipality to sort of address those issues.

From a financial perspective, I would say it’s not about the money because really, when you are managing an environmental liability, I don’t think the government is able to offer any type of a concession that is really going to be meaningful, or material, to the big picture. But what they can offer is some recognition to the company, that they’re doing a good job, so that the company can leverage that with the other stakeholder groups, whether that’s a community or the province at large, it creates a sense of pride and accomplishment

I mean I don’t even know if they are aware we have been ISO 14001 certified. Obviously if they came to visit our site they would know that. Maybe asking companies that are certified to register and notify them so they understand, I guess the companies that are in Alberta that are going above and beyond. And I don’t know if you know if, some sort of certificate to be issued from the government, or some sort of recognition so that it further instills that to senior management, that not only do we know we are doing the right thing but the government recognize that as well.


47

Chart 4 shows four dimensions of environmental performance at facilities with different rows for

environmental performance (compliance and beyond compliance), and two columns to describe

the means of influence (social lever and regulatory lever) that can be used for environmental

performance beyond compliance.

Each verbatim quote was selected from interviews for its revealing power to convey the core

content of the data collected. All interviewees’ contributions a re represented by a quote.

The regulatory lever used to enforce compliance works by clarifying the levels of expectations by

managers at facilities, thus allowing them to play from an equal footing with competitors in their

industry.

The social lever used to enforce compliance plays on the social licence to operate, with a

perception of the importance of environmental consideration that is increasing with the new

generation.

That social lever is showing potential for environmental performance beyond compliance: the

social comparison influences both the general public and facility staff towards pushing for and

adopting exemplary environmental practices. Also, data shows that a potential reward in the social

sphere is a motivating factor for beyond compliance performance.

Finally, a risk of stagnation is described as a collateral effect of regulation. The necessity for

regulation to keep pace with evolving practices is stressed , as failure to do so might discourage

beyond compliance initiatives.

Chart 5 shows how perception of regulation plays implicitly on environmental values held both by

staff at facilities and in the general public to create a social dynamics that is beneficia l to

environmental performance beyond compliance.

Regulation is also explicitly pointed out as a factor by managers describing the organizational

dynamics at facilities; it can be a matter of cost of non-compliance or corporate image for

instance.

Beyond compliance organizational standards result from both the shared environmental values by

staff and the organizational dynamics.

However, a risk of stagnation exists that could impair the ability of organizations to perform

beyond compliance when the organization is perceived not to have been rewarded in the past for

taking the risk and cost of a proactive, beyond compliance performance.


48

Improved organ izational stand ards (beyond co mpliance)

Improved environmental p ract ices at f acil ity

Perception of regulation at facility

Organization al co mpliance to re gulation (p rocedures) Shared environ mental concern at fac ility (values)

Organizational dy namics (Explicit factors) financial profitability /cost of non -complia nce

corporate image

internal poli cies a nd a udits

benchmarking (industry and competition)

ISO and external a udits

- technol ogy improv ements

Social Dy namics (Implicit factors)

media

community

employee s

managers

on site communicati on

Risk of

stagn ation

Chart 5: A model of factors interaction at facilities

a b

c d

h

e f g

i

It should be noted that—for future policy development and program design pertaining to

environmental performance and excellence—regulation, while widely considered the main driver

of environmental performance at facilities, also has its shortcomings. This qualitative phase of

research also shows that the social lever available to policy makers should be further investigated,

as it seems to be a useful complement to regulation in order to encourage the move of facilities to

beyond compliance environmental practices: “I think if they were able to standardize some of the

key performance indicators they are interested in, if they were doing a better job at

communicating that out to the public, and companies would have to take notice of where they sit

on that perspective.”

These results resonate well, for instance, with Paddock’s (2011) call at the Ninth International

Conference on Environmental Compliance and Enforcement to notice that “It is important for those

managing compliance and enforcement programs to also think about how their work can influence

the internal economic considerations of regulated entities and help shape environmental values.”


49

Phase 5 – Validation

The purpose of phase 5 was to validate the research results. This involved two elements, the first

was verification of our findings against the findings of academic literature. The second, involved a

short quantitative web survey circulated to all participants from the phase 3 quantitative survey.

5.1 Links with scientif ic literature

The review of the academic literature completed in phase 1 identified a range of factors that

influence environmental performance decision-making process at facilities.

The value of this research was not only that it confirmed that the factors identified i n the literature

were also at play within facility-level environmental performance in Alberta, but also that it

expands upon this to provide a relative ranking of these factors within the Alberta context and

improves our understanding of what aspects of environmental performance these factors

influence most significantly.

We revisited the academic literature to further explore and test our results against other academic

findings relevant to the three most important factors identified in this research: regu lation,

management values, and industry standards.

First, and unsurprisingly, our quantitative results ranking regulation as the most important driver13

of environmental improvement beyond compliance at facilities fall in line with most of the

scientific literature on the topic and resonate well for instance with Gray and Shimshack’s (2011)

review on monitoring and enforcement or with Holstein and Gren’s analysis (2013) of violation of

environmental regulations.

However, our qualitative results (Phase 4), by revealling a risk of stagnation as regulation fails to

keep up with best practises , invite to further investigate the claim by Khanna and Speir (2013)14 or

by Frondel et al (2008) that seems to mechanically link the existence or prospect of stricter

environmental regulations to innovation. Rennings and Rammer (2010) and Kemp and Pontoglio

(2011), for instance, had also advised to use caution before establishing such a link: “ The fifth issue

of understanding is that environmental policy can have both a po sitive and a negative influence on

the development and adoption of particular environmental innovations. More attention should be

13 180 ranked it as very a important fa ctor out of 264 a nswers. 14

“It is there fore i mportant to have strict enfor ce ment of e xisting regulation and a t hreat of stringent regulations in the fut ure to

motivate a cha nge in corporate environme ntal be havior. M oreover, the expectation of tougher regulations in the future, eve n i f they do not mandate spe cific te chnologies , can sti mulate green te chnologi cal innovation.”


50

given to how particular policies favour or disfavour particular innovations. ” Our results indicate

that further research is needed to understand the different facets of the adverse dimension of

regulation described at facilities, like the effect of perceived changing environmental priorities by

the regulator or that of the irregular update of regulations.

Second, environmental values of managers and the belief in a moral responsibility for protecting

the environment were identified as important drivers of performance by the literature (Khanna

and Speir, 2007; Wu, 2009). For Paddock (2011), “Values are one of the key drivers of

environmental behavior. People tend to act in pro-environmental ways wh en a situation activates

a feeling of moral obligation to do so—simply put, pro-environmental behaviors are more likely

when people feel morally responsible to undertake them.” Delmas and Toffel (2011) had shown

that organizational characteristics lead managers to interpret pressures differently. The

convergence of our results with the existing literature indicates an interesting avenue for research

investigating the link of environmental performance beyond compliance at facilities with

corporate social responsibility (CSR). This type of research could shed more light on the role of

personal values in environmental decision-making processes (Aguinis and Glavas, 2012).15

Third, the interest to promote industry standards for environmental performance beyond

compliance at facilities, as stated by managers in our quantitative data , is consistent with results

by Tari et al. (2012). However, caution is advised by some researchers who stress that

consideration should also be given to the role of third-party auditing (Gamper-Rabindran and

Finger, 2013) or environmental institutional distance between headquarters’ and subsidiaries’

countries (Aguilera-Caracuel et al., 2012), for instance. Such considerations limit the affirmation of

a direct, beneficial role of industry standards —isolated from other factors—for beyond

compliance practices at facilities. Self-reporting of perceptions by managers at facilities may

constitute a limitation of our study in this respect, although a social desirability bias effect may be

mild. (Milfont, 2009)

5.2 Questionnaire and Data collection

The factors described to respondents in the Phase 5 questionnaire had been identified in Phase 3

(quantitative) and refined in Phase 4 (qualitative). Data was collected between May 15 and May

26, 2014. We contacted respondents of our Phase 3 quantitative survey for a short, online

confirmatory follow-up survey consisiting in 15 questions and provided them the opportunity to

share their comments on our results using a contact phone number.

15

“Given the findi ngs regardi ng supervisor commitme nt to CSR, some resear cher s have found that its a ntece dents i ncl ude values

(Mudra ck, 2007 ), congruence of individual values with organizational values (Bansal, 200 3) and individual concer n with certain issues

(Bansal, 2003 ; Bansal & Roth, 20 00; Mudrack, 20 07). Personal values are part of the deci sion -making processe s whether individuals

realize it or not, so it is important to understand how value s influe nce engage me nt in CSR (Hay & Gray, 1 974; Swanson, 1999 ). Other predictor s of individual commitme nt to CSR i nclude prag matic aspects , such as aware ness of CSR gui delines (Weaver et al., 1999 b), CSR

training (Stevens et al., 2005 ), and attendance of CS R confere nce s (Johnson & Greeni ng, 1999; Weaver et al., 1999a, 1 999b)” .


51

Of the respondents from the Phase 3 quantitative survey, 130 responded to this online survey to

validate the findings (no feedback call was received)16. The questionnaire used for Phase 5 can be

found in Appendix 4. The main factors of environmental decision making that appeared in Phase 3

of this research and were refined in Phase 4 were presented to respondents:

clarifying role of regulation

equalizing role of regulation

importance of social values

regulator challenges

5.3 Results

The tables presented below detail our confirmatory survey results . Altogether, these quantitative

results strongly support the findings of the qualitative analysis of Phase 4:

Almost all respondents agree that regulation plays a role in clarifying the levels of

expectations for environmental performance;

Nine out of 10 respondents agree regulation plays a role in equalizing the minimum levels

of environmental performance among competitors.

Table 25: Agree Disagree

q1 a -- Regulation plays a role in clarifying the levels of e xpe ctations for environme ntal performa nce. 98% 2%

q1 b -- Regulation plays a role i n equali zing the levels of environme ntal performance a mong competitors (A

level playing field exi sts for all fa cilities).

87%

13%

q1 c -- Regulation helps e nvironmental ma nagers at the fa cility advocate for impr oveme nt to upper

manage ment.

98%

2%

q1 d -- Inspe ctions are i mporta nt beca use they hel p our e mpl oyees and manage me nt focus on

environmental issues.

91%

9%

q1 e -- Reg ulation is the si ngle most important driver of e nvironmental progre ss in our industry. 84% 16%

q1 f -- Regulation by prescri bing a level of e nvironmental per for mance does not e ncourage environme ntal

innovation.

51%

49%

Source: Adva nis 201 4, second survey data.

Substantiating the collateral effect of regulation and the risk of stagnation in environmental

improvement, half of respondents consider that regulation, by prescribing a level of

environmental performance, does not encourage environmental innovation.

As evidence of the regulator’s challenges :

Only six out of 10 respondents say the current regulatory system encourages beyond

compliance performance.

Half of respondents say current regulations are equally enforced across facilities in the

same sector.

Regulation is clear for seven respondents out of 10 (89% in the Manufacturing sector),

which also leaves room for improvement.

16 Out of the possible 22 1 answers. T his sa mple was not fa cilities base d, since some respondents had ma ny facilities under their

supervision.


52

According to nine out of 10 respondents, the fact that the staff has been advocating for

environmental improvement has led to environmental progress in their organization . This

illustrates the importance of social values for environmental decision making at facilities (social

lever). Furthermore, for almost as many respondents (86%), a formal recognition of efforts to go

beyond compliance would motivate employees and management to do more.

Corporate image and social values interplay to influence environmental performance at facilities.

Advice from government officials that could help improve environmental performance are

welcome by respondents, and formal recognition of efforts to go beyond compliance would be

well received.

Although working habits and mindsets can be a barrier to environmental performance, the fact

that the staff often advocates for environmental improvement has, in fact, led to environmental

improvement within organizations. It is to be noted that the respondents that have weaker

practices mentioned more often that changing the mindsets and habits within their organization

was a challenge.

Table 26:

Agree Disagree

q2 a -- Our manage ment would be ope n to advice from government offi cials that could help improve our

environmental per for mance.

90% 10%

q2 b -- An important barrier to e nvironmental per for mance comes from the di ffi culty of cha nging working

habits and mindsets.

79%

21%

q2 c -- The fact that the sta ff is a dvocating for environmental impr oveme nt has led to e nvironmental

progress in our organi zation.

90%

10%

q2 d -- A for mal recognition of our efforts to g o beyond compliance would motivate our e mpl oyees and

manage ment to do more.

90%

10%


It is generally considered that current regulatory levels are sufficient to control the respondent

facility’s impact on the environment.

Table 27:

Agree Disagree

q3 a -- Curre nt regulations are clear (the re quire ments are easy to understa nd). 71% 29%

q3 b -- Current regulations are equally enfor ced a cross facilities in the same sector. 53% 47%

q3 c -- Current regulatory levels are suffi cient to control our fa cility's impa ct on the e nvironment (i mpa ct

relates to both the resour ce use a nd e missions (i. e. conservation, efficiency and e nvironmental quality).

89% 11%

q3 d -- Current regulatory syste m encourages beyond compliance performa nce. 61% 39%



53

Conclusion

In conclusion, the process and results of this research lead us to consider the question of

Understanding Organizational Decision Making Related to Environmental Performance with

nuance and open avenues for research.

To understand “What factors influence environmental performances among regulated facilities in

Alberta?” this research relied on a sequence of exploratory phases , starting with a documentation

and literature review. The interviews with managers at facilities allowed to identify survey items,

which were quantitatively validated by managers at facilities (N=264). The other series of

interviews led us to determine dimensions of the factors, and final results were validated by a

quantitative survey of managers ’ perceptions at facilities (N=130).

In line with most of the scientific literature on the topic, our results rank regulation as the most

important driver of environmental improvement at facilities.

However, beyond providing a quantitative measure of the relative importance of regulation

compared with other significant factors described by respondents of our survey, this research also

shows the collateral and segregating effects of regulation, with a risk of stagnation. According to

four out of 10 facility managers, regulation does not encourage beyond compliance performance.

Looking at the six factors identified as important, our results should not be narrowed down

exclusively to regulation. Overall, our results point towards potential benefits from

complementary actions to regulation in order to increase environmental leadership in Alberta.

Both quantitative and qualitative results open additional avenues of research for environmental

performance improvement and for policy design.

More research will allow policy makers to understand the different facets of the adverse

dimension of regulation, to explore the role of personal values in environmental decision-making

processes and a possible link to corporate social responsibility research, and to shed light on the

actual role of industry standards for improved environmental practices at facilities.

Future policy development and program design pertaining to environmental performance beyond

compliance and excellence will need to consider regulation’s role at the facility level, as this

research indicates that it interplays with a number of organizational and social factors. Innovative

mechanisms can already be conceived at this stage.

For example, an annual autoevaluation of facilities by environmental managers would permit

them to rank themselves within the industry on a number of practices and standards. This could

play on implicit factors to create a beneficial social dynamic for environmental performance

beyond compliance.


54

Also, the official recognition of facility-level efforts for environmental improvement and

innovation beyond compliance would likely have an effect on the organizational dynamics, as

evidenced in the qualitative data.

Finally, as evidenced in our final quantitive validation of research, inspections at facilities could be

organized in such a way as to increase the perception of a more equal enforcement of regulation

across industries and the province.

An innovative research design and proven data collection capacities have allowed the research

team to address adequately a complex research question, generating robust results. We wish to

stress here the stimulating presence and constant support we have received from the ESRD

project team, and thank them for their collaborative spirit in this research:

Farrah McFadden

Wayne Crosby

Myles Kitagawa

Shauna Kryba

Kim Zeleny

For all these reasons, we are confident that Understanding Organizational Decision Making

Related to Environmental Performance will allow Alberta ESRD to use new knowledge and

understanding that can support options that seek higher levels of performance, as part of the

focused effort of the Government of Alberta to move forward in establishing priority initiatives

pertinent to the environment.


55

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Appendices

Appendix 1: Recruiting and Interview grids of Phase 2

Recruiting script:

Good morning/afternoon,

My name is__, from the firm Advanis, calling from Montreal.

We are undertaking a confidential research on behalf of Alberta’s Ministry of Environment and Sustainable Resource (ESRD). Our company, Advanis, is a third party involved in this research to

ensure respondents of the confidentiality of their responses.

To advance the goals of achieving world-class environmental performance, Alberta Environment

and Sustainable Resource Development (ESRD) is working to understand how it can effectively

inspire environmental excellence. To do so, they are seeking to better appreciate the business

considerations that influence facility-level environmental performances and what factors enable

or constrain environmental performance decisions.

The intent for the project is to survey facility managers and/or environmental representatives of

industrial facilities across Alberta from all sectors. The final report will be made available to

participants.

Would you be available for a 20-minute interview with one of our res earchers so that your

answers can help our firm advise Environment and Sustainable Resource Development on how to

adapt its policies in the near future?

Would you be available for an interview in the next few days?

Thank you.


59

Interview grid:

Good morning/afternoon/evening,

My name is__, I am a researcher from the firm Advanis, calling from Montreal.

Thank you for your participation in this research interview; it is designed to last less than 20

minutes and will be recorded for qualitative analysis .

We are undertaking this confidential research in order to understand “What factors influence

environmental performances among industrial facilities in Alberta?” The aggregated results will be

communicated to Alberta’s Ministry of Environment and Sustainable Resource (ESRD), as it is

reviewing its policies and needs to identify areas for possible improvement.

Your responses will remain confidential. No other information will be shared with ESRD.

Anonymity of our respondents will be strictly respected, a nd all data obtained during interviews

will be destroyed after being analyzed, and not transmitted to anyone.

There are 4 types of factors relevant to industrial facilities and to the environment that we will

discuss today.

First, I would like to know how you would describe the …

POSSIBL E IMPAC T TO THE ENVIR ONMEN T

How would you describe the facility’s operations, in terms of possible impact to the environment?

What are the activities most important to control at your facility, in environmental terms? Were

they the same 5 years ago?

Which processes do you use to anticipate situations that could impact the environment around

your facility? Were they the same 5 years ago?

CONCERN FOR THE ENVIRONM ENT

To what extent are environmental issues a consideration in day-to-day business decisions at your

facility?

Is it the same for top management, middle management, and operations?

How differently are environmental issues perceived by different departments at your facility?

What comes to your mind when you think about the community around your facility?

How would you describe the perception of your facility by the local community? Has there been

any community reaction to the environmental impact of the facility in the past?

COMPETITIVE EN VIRONM ENT OF THE FACIL ITY

Does competition in the industry impact the environmental practices at your facility? How?

Would you agree that economic factors explain all environmental performance decisions? What

else could motivate environmental performance at your facility? Would you agree that lack of

profit-making or return-on-investment from environmental investments has been a barrier to

improving your facility’s environmental performance?”


60

In terms of resources spent on the environment, have they increased, decreased or remained the

same in the past few years, at your facility? What was this a response to? (innovation, incident

management,…)

How supportive is upper management of environmental initiatives at your facility?

What are the technical difficulties encountered at your facili ty, in environmental terms?

Would you say following ESRD requirements and guidance is a constant challenge in your business

or that there are only a few operational situations that get out of control?

In your opinion, does meeting ESRD requirements and guidance require more actions of the

managerial level or the operational level?

In your experience at your facility, the management’s strategy is to comply with current

government environmental regulations or to voluntarily anticipate future environmental

regulations? Why?

GENERAL MATTER S

Where do you find in formation regarding environmental matters relevant to your operational

activities?

What best represents for you the level of environmental performance of your facility?

Are you aware of any ESRD monitoring and enforcement activities at other facilities in region?

How is your company management involved in environmental decision making at the facility level?

Who is championing environmental values at your facility?

What could your company do to be a better environmental performer?

Do you think there are core values shared by people at your facility?

How would you describe the work climate at your facility?

What are the three most important motivations and barriers to environmental management at

your facility, in your experience?

These were all the questions we wanted to ask you for this research. Is there anything you would

like to add before we say goodbye?

Thank you for your time, have a great day.


61

Appendix 2: Questionnaire Phase 3

Intro

Hello,

This research is being undert aken with the goal of answering the question: “What factors influence

environmental performance among indust rial faciliti es in Alberta?” The aggregated results will be shared with

Alberta’s Ministry of Environment and Sustainable Resource Development (ESRD) for their use in informing

options to more effectively motivate environmental excellence.

Participation in this research is voluntary, and your responses will remain confidenti al. Your anonymity will

be strictly respected: Advanis will not share any identifying information outside of our research team, and all

identifying information will be destroyed aft er analysis.

Your parti cipation is important to ensure the quality of our findings. A final report will be made avail able to

all survey participants.

Your collaboration is greatly appreci ated.

Nicolas Toutant,

Project Manager,

Advanis

Valid

In this questionnaire, we are asking questions about the <<sample.facility_name>> facility located in

<<sample.municipality>>.

A facility includes buildings that are on a contiguous site and under common control by an organization.

Are you able to answer questions about environmental matt ers at this facility?

Valid_terminate

We' re sorry, but this study is addressed to those responsible for environmental matters at this particul ar

facility. Thank you for your time.


62

Q1

Does your organization operat e in more than one country?

Don't know

Q2

Where is your organization headquart ers locat ed?

Don't know

Q3

In what province is your organization headquart ers locat ed?

Edwards Island

Saskatchewan

Don't know

Q4

Is your organization headquarters located at your facility (<<sample. facility_name>>)?

Don't know

63

Q5

How many facilities does your organization have in Alberta, including yours?

(If you are not sure, please provide your best estimation.)

___________

Don't know

Q6

How many employees work at your facility?

(If you are not sure, please provide your best estimation.)

___________

Don't know

Q7

How would you cl assify the average annual employee turnover at your facility?

Don't know

Q7a

Is this due to seasonal v ari ations?

Don't know

Q8

How many years ago was the facility built?

(Please provide an answer in numbers of years. If you are unsure of the exact number, please provide your

best estimation.)

___________years

Don't know

64

Q8a

Has your facility undergone any major technical upgrades since it was built?

Don't know

Q8b

In what year did your facility last undergo its most recent major technical upgrade?

___________

Don't know

Q9

Who holds the primary responsibility for investment decisions in envi ronment at your facility?

compliance, sustainability, etc.)

Don't know

Q9b

Who holds the primary responsibility for the implementation and monitoring of environmental improvements

at your facility?

President

Don't know

65

Q9a

When envi ronm ental incidents occur at your facility, what groups are involved with the response and solution

development (consider the past 5 years )?

Yes No

a. Research and innovation

b. Marketing

c. Finance

d. Operations

e. Legal

f. Environment

g. Other (speci fy):

Q10

To what extent do you agree that the following factors have encouraged the adoption envi ronmental

improvements at your facility within the last 5 years ?

Q10a

Satisfying investor (owner) desi res to reduce environmental risks and liabilities

Does not apply

Don't know

Q10b

Protecting or enhancing the value of the facility or parent organization for investors (owners )

Strongly Agree

Does not apply

Don't know

66

Q10c

Satisfying lenders’ desires to reduce environmental risks and liabilities

mewhat Agree

Does not apply

Don't know

Q10d

Upper management's encouragement of facility parti cipation in voluntary envi ronmental programs

Neither Agree nor Disagree

Does not apply

Don't know

Q10e

Clear internal environmental polici es or standards that apply to all facilities within the organization

Agree nor Disagree

Does not apply

Don't know

Q10f

Upper management's beli ef in a moral responsibility for prot ecting the environment

Disagree

Does not apply

Don't know

67

Q10g

Upper management's support of envi ronmental improvements even if costs are substantial

Disagree

Does not apply

Don't know

Q10h

Upper management’s belief that improvements in envi ronmental performance can increase long -term profits

Strongly Disagree

Does not apply

Don't know

Q10i

Ensuring a good corporate image

Does not apply

Don't know

Q10j

Media coverage of an environmental incident involving your company or your facility

Does not apply

Don't know

68

Q10k

Keeping up with competitors ’ envi ronmental improvements

Does not apply

Don't know

Q11_1

Please rank the top three most influenti al factors that have led to environmental improvements at your facility

within the last 5 years.

(Please sel ect the top 3 choices.)

__ Satisfying investor (owner) desires to reduce environmental risks and liabilities

__ Protecting or enhancing the value of the facility or parent organization for investors (owners)

__ Satisfying lenders ’ desi res to reduce envi ronmental risks and liabilities

__ Upper management's encouragement of facility participation in voluntary environmental programs

__ Clear internal envi ronmental poli cies or standards that apply to all faciliti es

__ Upper management's belief in a moral responsibility for protecting the envi ronment

__ Upper management's support of environmental improvements even if costs are subst anti al

__ Upper management’s beli ef that improvements in environmental performance can increase long -term

profits

__ Ensuring a good corporat e image

__ Media coverage of an environmental incident involving your company or your facility

__ Keeping up with competitors’ environmental improvements

Don't know

69

Q11_2

Which of these has been the most influential factor leading to environmental improvements at your facility

within the last 5 years?

(Please rank in order.)









profits




Don't know

Q11a

Can you think of other factors that have influenced the adoption of envi ronmental improvements at your

facility over the last 5 years?

________________________________________

________________________________________

________________________________________

________________________________________

________________________________________

Don't know

70

Q11b

Which of these indust ry associations does your organization belong to?

(Please sel ect all that apply.)

Power Producers Society of Albert a

Alberta Used Oil Management Association

None of th e above Don't know

Q11c

Is your organization a member of any other industry associations?

Don't know

Q11d

Does your facility / organization belong to an industry associ ation that:

(Please sel ect all that apply.)

training

-government partners

None of th e above

Don't know

71

Q12

To what extent do you agree that the following factors have influenced environmental imp rovements at your facility in the last 5 years?

Q12a

Customers' desire for envi ronmentally friendly products and servi ces

Agree

Don't know

Q12b

Ability to earn public recognition or customer goodwill with environmentally fri endly actions

e nor Disagree

Don't know

Q12c

Pressure from environmental interest groups

Don't know

Q12d

Complying with current government environmental regulations

Don't know

72

Q12e

Desi re to be better prepared to meet anticipated environmental regulations

Don't know

Q12f

The local community's perception of the facility

Agree nor Disagree

Don't know

Q12g

Keeping up with competitor environmental improvements

Don't know

Q12h

Meeting industry st andards

Don't know

Q12i

Media coverage of an industry -relat ed environmental incident

Neither Agree nor Disagree

Don't know

73

Q13_1

Please rank the top three most influencial factors that have led to envi ronmental improvements at your facility

within the last 5 years.

(Please sel ect your top 3 choices.)

__ Customers' desire for environmentally friendly products and services

__ Ability to earn public recognition or customer goodwill with envi ronmentally fri endly actions

__ Pressure from envi ronmental interest groups

__ Complying with current government environmental regulations

__ Desire to be bett er prepared to meet anti cipat ed environmental regulations

__ The local community's perception of the facility

__ Keeping up with competitor improvements

__ Meeting indust ry standards

__ Media coverage of an indust ry-rel ated envi ronmental incident

Don't know

Q13_2

Which of these has been the most influencial factor leading to envi ronmental improvements at your facility

within the last 5 years?


__ Customers' desire for environmentally friendly products and services

__ Ability to earn public recognition or customer goodwill with envi ronmentally fri endly actions








Don't know

Q14

Over the last 12 months, did your facility make a voluntary cont ribution of time, money or other resources to

the community nearest to your facility?

Other (speci fy):

No

74

Q15

How frequently is your facility inspect ed by an environmental agency?

Don't know

Q16

To what extend do you agree that there is good mutual understanding between your facility and the regulator?

Don't know

Q17

Please indicate whether you agree or disagree that the following factors are barriers to the adoption of environmental improvements at your facility.

Q17a

High upfront investment expense

Somewhat Disagree

Don't know

Q17b

Cost of staff training

Don't know

75

Q17c

High day-to-day costs

Strongly Agree

Don't know

Q17d

Significant upfront time commitment to implement

Strongly Disagree

Don't know

Q17e

Uncert ain future benefit

Don't know

Q17f

Risk of downtime or delivery interruptions during implementation

Don't know

Q17g

Complexity of int erpreting regulations

Strongly Disagree

Don't know

76

Q17h

Lack of return on investment

Don't know

Q17i

Not required by law

Somewhat Agree

Don't know

Q18_1

Please rank the top three most signifi cant barri ers to the adoption of environmental improvements at your

facility.

(Please sel ect your top 3 choices.)

__ High upfront investment expense

__ Cost of staff training

__ High day-to-day costs

__ Significant upfront time commitment to implement

__ Uncert ain future benefit

__ Risk of downtime or delivery interruptions during implementation

__ Complexity of interpreting regulations

__ Lack of return on investment

__ Not requi red by law

Don't know

77

Q18_2

Which of these factors you have indicat ed is the most signifi cant barrier to the adoption of environmental

improvements at your facility?











Don't know

Q19

For your facility, please indicat e whether or not the following practi ces have been implem ented?

Yes No Don't know

a. Documented environmental policy

b. Internal environmental audits at regular int ervals

c. External environmental audits at

regular int ervals (by a third party)

d. Periodic publishing of environmental performance

information to the publi c

e. Environmental Certi fication (e.g.,

ISO 14001 certification)

f. Facility envi ronmental achievements are published in annual reports

g. Environmental Management System

78

Q20

In the past 5 years, has the level of investment in environmental infrast ructure or improvements at your

facility…

Don't know

Q21

For your facility, please indicat e the extent of your agreement or disagreement with the following stat ements:

Q21a

Environmental responsibility is emphasi zed through well-defined envi ronmental poli cies and procedures

Don't know

Q21b

Our environmental standards are more stringent than mandatory governmental requirements

Don't know

Q21c

We conduct environmental audits for our own performance goals, not just for compli ance

Don't know

79

Q21d

We are well informed about the best practices in envi ronment

Strongly Agree

Don't know

Q22

For each of the following items, how would you describe the envi ronmental performance at your facility in

the past 5 years.

Improved Slightly

improved

Remained

the same

Slightly

deteriorat ed

Deteriorat ed Does not

apply to

your facility

Do not

know

a. Water quality

b. Water use

c. Air emissions

d. Land management and reclamation

e. Wildlife and biodiversity

f. Noise pollution

g. Odour pollution

h. Waste management

80

Q23

For your facility, please indicat e the level of compli ance with regulatory st andards for the following item(s)

…

Working

towards

meeting

regulations

Meeting

regulatory

standards

Doing more

than

regulation

requi res

Not

regulat ed at

our facility

Don't know

a. Water quality

b. Water use

c. Air emissions

d. Land management and recl amation


f. Noise pollution

g. Odour pollution

h. Waste management

81

Q23a

In the following domain(s ), would you say you exceed the regulatory standards or requirements by a slight or

a large margin?

By a slight

margin

By a large

margin

Don't know

a. Water quality

b. Water use

c. Air emissions



f. Noise pollution

g. Odour pollution

h. Waste management

82

Q23b

On what basis would you say you are abl e to achieve the mentioned results?

On a

regular

basis

On a

frequent

basis

On an

occasional

basis

Don't know

a. Water quality

b. Water use

c. Air emissions



f. Noise pollution

g. Odour pollution

h. Waste management

83

Q24

Please rank the overall top three most influential factors for envi ronmental improvement.

(Please sel ect the top 3 choices.)









profits




__ Customers' desire for environmentally friendly products and services __ Ability to earn public recognition or customer goodwill with envi ronmentally fri endly actions

















Don't know

84

Q24_2

What is the overall most influential factor for envi ronmental improvement?










profits




__ Customers' desire for environmentally friendly products and services __ Ability to earn public recognition or customer goodwill with envi ronmentally fri endly actions

















Don't know

85

Q26

Finally, we would like to know if your organization is publi cly traded, privately owned or is

governmental/municipal?

Publicly traded

Don't know

Q27

What is your organization's average yearly revenue?

illion a year

Don't know

end

Thank you very much for completing the survey!

Status Code: -1

86

Appendix 3: Interview grids of Phase 4

The interview g rids (A, B, C) proposed here evolved after the f irs t interviews in order for subsequent da ta

collection (interview grid 2) to shed light on emerging themes.

Grid A

Our initial results show tha t for more than 90% of managers involved in decis ion making a t facilities, one of

the most important drivers of improved performance is regula tion 17.

1. So the question we would like to a sk you is: why do reg ula tions work?

2. Can y ou think of other reasons?

3. How do you bala nce the regula tory chang es and the costs involved for other environmental

improvements?

4. In your opinion, in the long term, how could ESRD better encourage forma l practices of environmental

reporting at facilities in A lberta?

Grid B

Our initial results show tha t external fa ctors play a role for environmenta l improvements at fa cilities. So we

would like to ask...

1. Which external factors have influenced env ironmental decision making at y our fa cility?

2. How do they rela te to your organiza tion’s corpora te image?

3. How would you describe the implementation of environmental improvements (ISO certification, if

applica ble) at y our fa cility?

4. In your opinion, how can ES RD better encourage a n organizationa l dyna mics of environmental

improvement at your facility?

Grid C

Our initial results show that one of the fa ctors tha t play a role for environmenta l improvements at fa cilities

is that managers believe environment performa nce ca n increase prof it in the long term.

1. In your experience, wha t can lead them to believe environment performa nce ca n increase profit in the

long term?

2. And how do their environmental values come in to play in a competitive env ironment?

3. In your opinion, how could ESRD further its goal to achieve world-class environmental performance and

to motivate environmental excellence in Alberta?

17 They say exactly that in th e last 5 years, complying with government regulations has influenced environmental

improvements at their facility.

87

Interview grid 2

Regulation was identif ied as a very important fa ctor for environmental performance.

1. How does it play a role in improving environmental performance? (In other words, "why do

regulations work?") 2. How would y ou describe the effects of inspections a t fa cilities?

Other fa ctors appeared to be importa nt for environmenta l performance.

3. Would y ou say that s taff awa reness of environmental issues a t fa cilities a lso has a n impa ct? Why?

4. Would you say tha t people’s awa reness of environmental issues in the industry also has an impact?

Why? 5. When you think of current initia tives for environmental improvement at your facility, would you say

they a re well supported by the Government of Alberta? Why?

6. What are the current challenges for the regula tors, in your opinion? 7. In your opinion, how could they be better addressed?

88

Appendix 4: Questionnaire Phase 5

Intro

Hello <<sample.name>>

I am happy to share with you the most influential factors of environmental performance that were identi fied

through our research to dat e.

Our survey findings indicat e that these are: regulation and corporat e values.

We also identi fi ed a few challenges for the regulator.

Follow-up int ervi ews provided some insights on why these el ements influence environmental excell ence, and

we would like your feedback to validate these.

Answering this should not take more than 3 minutes.

I would like to thank you personally for your parti cipation in the process; this research would not have been

possible without your support.

Regards,

Nicolas Toutant,

Project Manager,

Advanis

[email protected]

89

Q1

Regulation was identi fi ed as a very import ant factor that influences environmental performance. Please tell us

the ext ent to which you agree, somewhat agree, somewhat disagree, or disagree with the following statements

that come from the survey results and interviews.

Disagree Somewhat

disagree

Somewhat

agree

Agree Do not

know

h. Regulation plays a role in cl ari fying the levels of expectations for

environmental performance

1 2 3 4 5

i. Regulation plays a role in equali zing

the levels of environmental

performance among competitors (A

level pl aying fi eld exists for all

facilities)

1 2 3 4 5

j. Regulation helps environmental

managers at the facility advocate for

improvement to upper management.

1 2 3 4 5

k. Inspections are import ant because they help our employees and

management focus on environmental

issues.

1 2 3 4 5

l. Regulation is the single most

important driver of environmental

progress in our industry.

1 2 3 4 5

m. Regulation by prescribing a level of environmental performance does not

encourage envi ronmental innovation

1 2 3 4 5

Q2

Our results show that corporat e image and social values are import ant factors influencing envi ronmental

performance. Please t ell us the extent to which you agree, somewhat agree, somewhat disagree, or disagree

with the following stat ements that come from the survey results and interviews.

Disagree Somewhat

disagree

Somewhat

agree

Agree Do not

know

h. Our management would be open to advice from government offi cials

that could help improve our

environmental performance.

1 2 3 4 5

i. An import ant barri er to

environmental performance comes

from the di ffi culty of changing

working habits and mindsets.

1 2 3 4 5

j. The fact that the staff is advocating for environmental improvement has

led to environmental progress in our

organization.

1 2 3 4 5

k. A formal recognition of our efforts

to go beyond compliance would

motivate our employees and

management to do more.

1 2 3 4 5

90

Q3

The results also show there were chall enges to be addressed by the regulator. Please tell us the ext ent to which you

agree, somewhat agree, somewhat disagree, or disagree with the following st atements that come from the survey

results and interviews.

Disagree Somewhat

disagree

Somewhat

agree

Agree Do not

know

i. Current regulations are cl ear (the requi rements are easy to understand)

1 2 3 4 5

j. Current regulations are equally

enforced across facilities in the same

sector

1 2 3 4 5

k. Current regulatory levels are suffi cient to control our facility’s

impact on the envi ronment (impact

rel ates to both the resource use and

emissions (i.e. conservation,

effi ci ency and environmental

quality))

1 2 3 4 5

l. Current regulatory syst em encourages beyond compliance

performance

1 2 3 4 5

Q3a

Do you have any comments or elements you would like to add?

________________________________________

________________________________________

________________________________________

________________________________________

________________________________________

-9 No

-8 Do not know

Q4

Thank you for taking the time to consider the preliminary results.

Please note that you are invited to share your thoughts on envi ronmental challenges by leaving a message at 1 -514-

375-2423.

We are genuinely int erested in your opinion and we will receive your comments anonymously.

Status Code: -1

Government & Nonprofit

Environment/decisionmaking/final report